IMF offices[Photo/the-star.co.ke]
Enhancing productivity and value addition of local commodities hold key to Kenya’s ambitions to reduce the increasing import bill as well as diversifying her exports, says International Monetary Fund (IMF).
The Bretton Woods institution argues that increasing local production will help expand exports in terms of value and equally accessing a bigger share in the international market. “This will help in achieving a stable balance of trade which currently is in favor of countries exporting to Kenya,” said Jan Mikkelsen, IMF Resident representative in Kenya.
He said Kenya is grappling with low production of export commodities a situation negating efforts to expand her share in the international market. Mikkelsen said by reducing imports and expanding exports, Kenya will boost economic growth in the long term.
Robert Mudida, associate professor of political economy at Strathmore School of Business said that even as the government pursues export diversification there is a need for the development of the agriculture sector. The sector, he said contributes significant volumes to the tune of more than 50 percent.
Vision 2030 secretariat director in charge of Economic Pillar Veronica Muthoni-Okoth said over and above diversifying exports more attention is required to be applied on promoting value addition.
Principal Secretary of Trade Chris Kiptoo in an interview last week confirmed that Kenya’s export basket comprises few products thus the need for export products diversification and enlargement.
Uganda, United Kingdom, Tanzania and Netherlands and the US for the last 10 years receive an average value of Kenya’s exports to the tune of Sh54.75 billion, Sh37.4 billion and Sh33.87 billion, Sh31.23 billion and Sh27.68 billion, respectively.
Ninety percent of leather is exported in form of unfinished wet blue leather while 55 percent of horticulture are shipped in primary form.