Kenya Records Modest Export Gain Amid Rising Import Costs

Kenya’s total exports during the second quarter of 2025 rose by 1.7 per cent to reach KSh 280.0 billion, while imports grew more sharply, pushing up the overall merchandise trade deficit. That dynamic contributed to a wider current account shortfall and signalled that economic headwinds could complicate the country’s external balance even as growth picks up.

Export strength this quarter was driven largely by gains in coffee, horticulture and vegetable-oil shipments. Coffee exports surged by 69 per cent to KSh 19.7 billion, horticultural products rose 19.1 per cent to KSh 55.0 billion, and animal and vegetable oils jumped 53.5 per cent to KSh 12.9 billion. Those gains offset declines elsewhere: exports of titanium slowed due to depleted mineral sites in Kwale, while shipments of salt and cement dropped by 28.1 per cent and 42.3 per cent respectively.

Imports climbed 5.7 per cent to KSh 693.6 billion, fuelled by increased purchases of industrial machinery, iron and steel — which rose 84 per cent — and road motor vehicles, which were up 38 per cent. Demand for petroleum products and fertilisers eased, helping to moderate the import bill slightly, but not enough to prevent the overall trade gap from widening.

The imbalance in Kenya’s trade flows helped widen the current account deficit to KSh 83.7 billion, compared with KSh 47.4 billion a year earlier. While inflows from diaspora remittances and other secondary income sources offered some mitigation, the worsening trade deficit has left external accounts under pressure.

Despite the export shortfall, Kenya’s economy grew at a robust 5.0 per cent in Q2 2025, propelled by a rebound in industry, steady agricultural output and gains in transport and finance sectors. Manufacturing and construction activity picked up, reflecting higher demand for capital goods and infrastructure inputs. Resilience in domestic output suggests that internal consumption and investment remain fairly cushioned even as external headwinds mount.

The contrast between solid economic growth and a deteriorating trade balance underscores a growing vulnerability for Kenya: while domestic demand and output continue to expand, the reliance on imports — especially for industrial inputs, machinery and transport equipment — translates into a heavy draw on foreign exchange. This dynamic complicates efforts to stabilise the Kenyan shilling and preserve external liquidity, especially if export performance fails to pick up significantly.