Kenya experienced a noteworthy milestone as its exports to Uganda surpassed the KES 100 billion mark for the first time in November 2023 . This surge was attributed to the depreciation of the Kenyan shilling, rendering local products more affordable in the neighboring country.
Official data indicates that within the twelve months leading up to November, Kenya exported goods totaling KES 105 billion to Uganda, coinciding with a 17.45 percent depreciation of the Kenyan shilling against the Ugandan shilling.
Comparatively, the value of goods exported to Uganda during these 11 months exceeded the KES 80 billion ($494.4 million) exported in the entirety of 2022, according to the Kenya National Bureau of Statistics (KNBS).
The domestic export value, excluding re-exports like refined petroleum products, witnessed a substantial 45 percent increase from KES 73 billion ($451.2 million) in the year leading to November 2022.
At the close of 2022, the exchange rate required a Ugandan trader to exchange 30.18 units of their country’s shilling for one Kenyan shilling, as per data from the Central Bank of Kenya (CBK). However, by the end of November the following year, the same trader only needed 24.9 units of the Ugandan currency.
This shift in the exchange rate empowered Ugandans to purchase more Kenyan products with the same amount of money. Reports from the border town of Busia indicate Ugandans crossing into Kenya to capitalize on the lower prices of goods such as cooking oil, wheat flour, and other household products.
Historically, it was Kenyans who ventured into Uganda to procure more affordable items from the nation led by Yoweri Museveni.
The managing director of the Kenya Association of Manufacturers (KAM) Antony Mwangi, suggested that the rise in exports is not primarily attributed to an increase in production.
“Kenya’s currency has not only depreciated against the US dollar but also against the Ugandan shilling. So goods from Kenya are much cheaper,” stated Mr. Mwangi.
Despite facing tough competition from similar products from China and India, Kenyan exports to Uganda, particularly in the categories of cement, iron, and steel, have gained an edge due to the favorable exchange rate, even considering higher duties imposed on products from the latter.
