Data from the
At the same time, the country's import bill rose by 2.3 per cent to Sh1.408 trillion compared to 2012's Sh1.376 trillion. Higher imports increase demand for foreign currencies which puts the shilling under pressure.
Reliance on imports also has the effect of increasing unemployment as local manufacturing is cut down.
"Importation of raw materials and intermediate goods remains high, especially with the huge projects taking place in the country. As we implement Vision 2030 this will be the case for quite some time, unless we raise our exports," said Dr
Imports, on the other hand, are mainly industrial supplies (33 per cent), fuel and lubricants (23 per cent), machinery and other capital equipment (16 per cent).
Food and beverage exports reduced by Sh21 billion between 2012 and 2013 to stand at Sh176 billion.
According to Dr Ikiara the manufacturing sector, whose competitiveness has been hampered by high power and transport costs, will benefit from ongoing plans to produce less costly power and modernisation of transport links through rail and road improvement.
READ: Government in fresh push to support manufacturing
This will help increase export of Kenyan goods by making their prices more competitive in the international market.
To buoy the industry there is need to reform the fiscal policy framework, especially on business taxes which are unfriendly to the market and by eliminating multiple regulations by counties.
The KNBS data shows that horticultural exports dropped 7.2 per cent from Sh89.9 billion in 2012 to Sh83.4 billion last year in line with a declining trend that started in 2011.
The segment accounts for nearly 18 per cent of the country's import earnings. The data shows that cut flower exports dropped by 13.9 per cent from Sh65 billion in 2012 to Sh56 billion in 2013, while earnings from fruits dropped 4.4 per cent to Sh4.5 billion.
Vegetable exporters, however, saw income growth of 10.4 per cent last year earning Sh22.3 billion.
"Performance was mainly affected by anxiety over future relations with EU countries after the lapse of the preferential trade regime in October,'' said
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