Why Kenya's export strategy needs more effort to grow markets

At a consultative forum that brought together lobbyists in the trade and retail sectors, the Retail Trade Association of Kenya (Retrak) chief executive Wambui Mbarire raised the question: Whom are we selling to when we export Kenyan goods?

The premise is that whenever local goods are exported, Kenyans in those markets are the ones expected to consume them. She, however, opined that this is not always the case.

Giving an example of Choco Primo, a product manufactured by Trufoods Ltd, a local firm and Cadbury produced by a British multinational, she said the chances of Kenyans picking the former off the shelf are higher compared to a foreigner.

“The owner of Tuskys used to tell me that the reason he won’t sell out his business is because he wanted to open a branch in Nigeria or Ethiopia and stock Kenyan goods in those countries,” she said. 

.

Keep Reading business

•  Tribunal orders Stanbic Bank to pay KRA Sh234m in tax claim Premium
•  Top banks build Sh230b war chest for bad loans amid economic gloom Premium
•  Kendu Bay: Sleepy fishing town that no lender will bank on
•  Local businesses urged to embrace sustainable practices
•  Behind-the-scenes rush as clock ticks for sale of Bamburi Cement Premium

This was to enable Kenyans in those countries to buy the items and introduce the products to the locals who will appreciate the quality hence growing its demand.

Tuskys however collapsed after the death of the founder. “These are the things people pack in their suitcases when they are travelling back,” she said.

For Ms Mbarire, the best bet in growing exports is to target Kenyans in those markets. “I feel we need to look inward more so that we strengthen the entire value chain. How do we ensure, to begin with, that a Kenyan knows it is a Kenyan product and starts interacting with it before we say we can now export?” she posed.

She said this way, local products will be promoted by Kenyans in foreign markets.

“So that when we take these products in markets which we have agreements with, Kenyans who stay in those economies will buy and circulate, boost demand and create a larger export market,” said Ms Mbarire.

Ms Mbarire’s theory may be right considering the challenges many Kenyans living overseas face when looking for Kenyan products or any that might taste similar to those back home.

“Just curious, watu mko USA which sausages are you buying that taste similar na ile ya Kenya’s farmers’ choice’ (Just curious, those who are in the US, which sausages are you buying that tastes similar to those by Kenya’s Farmers Choice)?” reads a recent post on Lets Cook Kenyan Meals, a social media group where Kenyans share food-related ideas.

The US, which Kenyan products have access to through the African Growth and Opportunity Act (Agoa) and an EPA (Economic Partnership Agreements) that is negotiating, is the country where most Kenyans immigrate. This figure stood at 157,000 according to 2020 data from the International Organisation for Migration (IOM).

The United Kingdom (UK) has 139,000 Kenyan migrants, 34,000 in Uganda, 29,000 in Canada, 25,000 in Mozambique, another 25,000 in Australia, 24,000 in Tanzania, 20,000 in South Africa, 17,000 in Germany and 10,000 in South Sudan.

According to the 2024 Economic Survey Report by the Kenya National Bureau of Statistics (KNBS), in 2023, export earnings grew by 15.4 per cent to Sh1.007 trillion.

The report states that the net effect was the narrowing of the trade balance from a deficit of Sh1.617 trillion in 2022 to a deficit of Sh1.604 trillion in 2023.

Tea exports increased from 551,804 tonnes in 2022 to 564,545 tonnes in 2023. The amount of coffee and unroasted beans exported stood at 48,858 tonnes in 2023 a slight increase from 48,301 tonnes in 2022. The amount of exported meals and flours of wheat shot to 27,209 tonnes in 2023 from 2,559 tonnes in 2022.

The report breaks down the performance of domestic exports from 2019 to 2023 which shows an increase in volumes for most commodities. It details that the volume of exported horticultural products increased by 168,900 tonnes to 772,700 tonnes in 2023 reflecting a 28.0 percentage increase.

“Other major export commodities that recorded increases in export volumes included cement, edible products and preparation, salt, iron and steel, essential oils, and tea which rose by 39.1 per cent, 35.9 per cent, 22.5 per cent, 18.8 per cent, 16.8 per cent and 2.3 per cent, respectively,” the report says.

The report adds: “Soda ash and titanium ores and concentrates exhibited the highest decline in export volumes from 284,700 tonnes and 424,900 tonnes in 2022 to 216,200 tonnes and 293,100 tonnes in 2023, respectively.”

State Department for Industry Principal Secretary Dr Juma Mukhwana notes that if Kenya is to export more, then there is also a need to produce more. “This is why the government is determined to expand manufacturing from the current 7.3 per cent to 20 per cent of gross domestic product (GDP) by 2030,” he noted.

Dr Mukhwana said the State Department of Trade has done its part in opening up markets for Kenya through negotiations of the EPAs with economies such as the UK, European Union and the US. “But are we making products that will be accepted in those markets?” he poses.

“Sometimes it becomes difficult for a Kenyan to make a product that will easily sell within the European Union (EU). Some of these issues become capacity building (issues) that we need to address.”

The PS said Kenya has the necessary skilled workforce and physical infrastructure to grow its manufacturing, adding these opportunities and players should work in tandem.

“So that we do not open up a European Union market, and we look at the data three years later down the line and the exports have not grown,” he said. “We agree we have new markets. The issue we need answers to is where are these products (for exports) going to come from?”