Kenya keen on balancing trade with South Korea

3
Kenya keen on balancing trade with South Korea
Kenya keen on balancing trade with South Korea

Africa-Press – Kenya. Kenya is seeking to bridge the trade imbalance between it and South Korea through legislation.

This will have a positive impact on the country’s agricultural sector as President William Ruto plans to increase tea, avocado and coffee exports to South Korea to match tech imports to Kenya.

According to the head of state, the current tax on Kenyan products slows down trade and he has asked Parliament to reduce them.

“The imbalance of trade favors Korea and Parliament can be instrumental in addressing this situation,” Ruto said.

President Ruto made the remarks at the Parliament building in Seoul, South Korea, when he held talks with speaker Kim Jin Pyo.

He is in the country for a three-day state visit on the invitation of President Yoon Suk Yeol.

The visit is focused on bilateral talks on development between the two countries.

Jin pledged to support Kenya’s quest to increase the agricultural exports to South Korea and secure job opportunities for Kenyans.

“On employment opportunities, I will hold discussions with the ministry of Labour and see how this can be enhanced for Kenyans,”Jin said.

The country’s exports rate against the imports remains low hence the need by the government to balance it.

According to the economic survey, the faster growth of imports compared to exports, resulted to a widening of the balance of trade deficit from Sh 999.9 billion in 2020 to Sh about 1.4 trillion in 2021.

Earnings from total exports could only cater for 34.6 per cent of the country’s imports, during the year under review.

The widening balance of trade deficit in general merchandise trade resulted in a deterioration of the current account balance from a deficit of Sh 510.1 billion in 2020 to a deficit of Sh 663 billion in 2021.

This was despite a Sh 92.8 billion surplus in the services account and a Sh 671.6 billion surplus in the secondary income account, in 2021.

Meanwhile, The agriculture sector is one of key areas that the Kenya kwanza administration is focused on to improve the country’s economy.

The administration sees the sector as having the potential for high and quick returns on investments.

Central Bank, says the agriculture sector continues to play a critical role in Kenya’s economy, accounting for 20 per cent of Gross Domestic Product (GDP).

The sector also employs over 40 per cent of the total population and more than 70 per cent of the rural populace and about 25 per cent of the annual workforce.

However, transport costs, weather, and input costs are some of the challenges affecting agricultural production in the country, report by CBK notes.

The country’s major agricultural exports are tea, coffee, cut flowers, and vegetables.

The Economic Survey 2022 indicates that agriculture remained the dominant sector, accounting for about 22.4 per cent of the overall GDP in 2021.

The sector recorded mixed performance, contracting by 0.1 per cent in 2021 compared to a growth of 5.2 per cent in 2020.

Overall value of marketed agricultural production increased by 4.3 per cent from Sh505.3 billion in 2020 to Sh527.0 billion in 2021.

For More News And Analysis About Kenya Follow Africa-Press

LEAVE A REPLY

Please enter your comment!
Please enter your name here