Kenya’s Trade Deficit Widens Amid Rising Asian Imports

Kenya faces a widening trade imbalance, presenting a challenge to policymakers aiming to stabilize the external account through export growth. The latest data from the Kenya National Bureau of Statistics (KNBS) indicates this ongoing issue.

Trade Deficit Expansion

Kenya’s trade deficit expanded to Sh435.6 billion in the three months ending September 2025. This represents a 10.98 per cent increase compared to Sh392.5 billion during the same period in 2024. The widening gap reflects stronger demand for imported goods alongside relatively slower growth in export earnings.

Import Expenditure Details

Import expenditure rose by 7.4 per cent to Sh725.0 billion in the third quarter of 2025. A significant portion of these imports originated from Far East Asia and the European Union. Asia accounted for 68.6 per cent of the total import bill.

Regional Import Sources

Increased imports from Saudi Arabia (gas oil), South Korea (condensers), China (industrial machinery), and Malaysia (palm oil) contributed to the rise in Asian imports. Conversely, imports from the United Arab Emirates decreased due to reduced purchases of motor spirit and gas oil, lowering the import bill to Sh68.8 billion from Sh88.8 billion the previous year.

Imports from Europe also increased by 7.8 per cent to Sh99.6 billion, with contributions from Belgium (gasoline) and Germany (machinery). Declines in purchases from the Netherlands (residual oils) and Russia (wheat) partially offset this growth.

Imports from Africa totaled Sh74.7 billion, a 12.6 per cent year-on-year increase, primarily driven by higher coal imports from South Africa and sugar from Uganda. Import expenditure from the Americas jumped by 19.8 per cent to Sh50.5 billion, fueled by increased purchases of turbo jets and coal from the United States.

Export Earnings and Destinations

Exports provided limited relief, with total earnings rising by 2.5 per cent to Sh289.4 billion in the quarter. Stronger performance in African and European markets supported this modest increase.

Africa remained Kenya’s largest export destination, accounting for 44.6 per cent of export earnings, with a 15.3 per cent increase. Gains in exports to the Democratic Republic of Congo, Uganda, Egypt, and Rwanda were partially offset by declines in exports to Sudan, South Sudan, and Somalia.

According to KNBS, total export earnings in the third quarter of 2025 reached Sh289.4 billion, up from Sh282.4 billion in the corresponding quarter of 2024.