NAIROBI, Kenya, May 21 – Clothes exported from Kenya to the United States of America (USA) dropped by Sh5.9 billion to Sh50.8 billion last year, eaten by the global recession and slowdown in the US market.
Data from the Kenya National Bureau of Statistics (KNBS) shows that exports dropped from Sh56.7 billion in 2022 to Sh50.8 billion in 2023.
As one of the largest markets for Kenyan apparel, the weakened demand in the US has directly impacted export volumes and values.
Earlier, the Kenya Association of Manufacturers (KAM) decried the increasing cost of doing business compounded by high taxation, driving a decline.
“The increased cost of doing business in the country has further exacerbated the situation, rendering the sector uncompetitive. The cost of doing business in the country has increased by almost 25% from May 2022 to February 2023,” said KAM in a statement.
The rise in costs is attributed to several factors, including increased employee costs, higher statutory contributions such as those to the National Social Security Fund (NSSF), escalating power tariffs, and rising logistics and financial expenses.
Moreover, the depreciation of the Kenyan shilling against the American Dollar and other hard currencies was initially perceived as a potential advantage for exporters, theoretically making Kenyan goods cheaper and more attractive in international markets.
However, this benefit has not materialized as expected. The soaring cost of doing business has offset any gains from the weaker shilling, leaving the sector struggling to maintain its competitive edge.
Industry experts highlight that while currency depreciation can enhance export competitiveness under normal circumstances, the concurrent rise in operational costs has nullified this advantage.
Under the African Growth and Opportunity Act (AGOA), Kenyans and some other African countries goods access the USA market duty-free.
