Kenya’s Import Bill Drops for First Time Since COVID-19 as Shilling Weakens Against Dollar

Kenya has reported a notable drop in its import expenditure for the first time since the COVID-19 pandemic, reflecting reduced spending on critical supplies. Kenyan imports dropped by nearly 14 percent in the first eight months of the year, highlighting the impact of the weakening shilling on the purchasing power of the local currency. The shilling had weakened against the dollar by 17 percent, making imports more expensive because these are mainly funded using greenbacks purchased in the local market.

All broad product categories recorded lower imports, except food and live animals whose purchases rose by 28.3 percent. Imports of manufactured goods declined by the largest margin at 27.3 percent, while other categories recording import declines were mineral fuels and lubricants (19.9 percent), animal and vegetable oils (20.9 percent) machinery and transport equipment (18.9 percent) and chemicals (14.3 percent). The negative impact of the cost of dollars has been seen on the motor vehicle sector, where dealers and assemblers have had to raise prices to cover their higher expenses and protect margins.