Kenya’s exports to hit Sh1tr by 2030 – report
Kenya’s value of total exports will nearly double by the year 2030, according to the latest projections by Standard Chartered Bank driven by rising interest from global manufacturers to set up bases in the country.
The country’s export revenues will grow by seven per cent rising from the current Sh659 billion to Sh1.1 trillion in the next seven years in a move that will help create jobs and boost revenues for investors and the government.
“Additionally, the research found that 10 per cent of global corporations currently do or plan to manufacture in Kenya within the next five to 10 years,” the report sponsored by Stanchart and prepared by PwC, a multinational professional services network of firms, says.
The report reveals that Kenya is among the 13 key markets that will drive much of this growth, with Kenya’s key export corridors being Uganda, the United States and Pakistan.
“Economies forecasted to have the potential to pivot their roles in global trade, include markets such as Kenya and Ghana,” says the report.
Pakistan will be the fastest-growing export corridor for Kenya, with trade between the two set to grow at an average annual rate of 10.7 per cent. Uganda and the US will continue to be the leading export corridors for Kenya, accounting for 11 per cent and 9 per cent of total exports in 2030, respectively, according to the report.
Regional trade relations
“Kenya is investing to expand its manufacturing sector and is strengthening its regional trade relations. The sectors that will dominate exports in 2030, based on our analysis of historical data and expected trends are agriculture and food, metals and minerals, textiles and apparel,” the Stanchart analysts said.
The report in which Kenya prominently features also says Nigeria and Kenya, will continue to drive trade, supported by improvements in the business environment, enhanced regional cooperation and infrastructure investments
The contribution of Kenya’s manufacturing sector's gross domestic product (GDP) has fallen from 9 per cent in 2016 to 7.6 per cent in 2020 due to what the industry lobby group attributes to lack of competitiveness especially high taxation and high cost of doing business.
The government has put its focus on the sector which is a key source of real jobs for the economy at a time when most people have to do with gig economy jobs. It aims to bring down the cost of electricity to attract manufacturers from around the world after years of investor exits due to the high cost of doing business.
The main growth in exports in the decade will happen in Bangladesh, Hong Kong, India, China, Kenya, Malaysia, Nigeria, Saudi Arabia, Singapore, South Korea, UAE and Vietnam.
The new research by Standard Chartered projects that global exports will grow by 70 per cent from Sh2 quadrillion to Sh3.2 quadrillion over the next decade.
Global trade will be reshaped by five key trends: Wider adoption of sustainable and fair-trade practices; a push for more inclusive participation; greater risk diversification; more digitisation and a rebalancing towards high-growth emerging markets.
Almost 90 per cent of the corporate leaders surveyed agreed that these trends will shape the future of trade and will form part of their five to 10-year cross-border expansion strategies.
The study was conducted using qualitative and quantitative analysis from both internal and external sources.
Economic modelling
Historical trade data and trade projections until 2030 were analysed using economic modelling to forecast trade trajectories and identify key markets and hubs in the future of global trade.
A survey of over 500 C-level and senior leaders from corporations globally was conducted to understand corporates’ growth aspirations, perceived trade corridor opportunities and priorities in capturing growth in the future trade environment.
