The Kenya National Chamber of Commerce and Industry (KNCCI) will lead a trade mission to Nigeria and Ghana next week, to expand Kenya’s presence in the West African market.
Speaking during the KNCCI exporters’ forum, the chamber’s president, Dr. Erick Rutto said the trade mission’s focus will be on key sectors with significant growth potential.
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These include a $300 million (Ksh37.8 billion) market opportunity for agro-processed products, a 45% potential export growth for pharmaceuticals, and the expansion of financial technology (fintech) solutions.
Dr Rutto highlighted that despite the growing economic potential of West Africa, Kenya currently accounts for only a small percentage of African exports to Nigeria and Ghana.
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KNCCI Eyes More Exports to Nigeria and Ghana in New Strategy
He revealed that currently, only 7% of Kenya’s total exports go to the African market.
“Recent research shows West Africa represents an untapped opportunity, with our current market penetration at just 7% of our African exports,” he said.
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“Nigeria imports goods worth $54 billion (Ksh 7 trillion) annually, yet Kenyan products account for less than 0.1%.”
According to Rutto, data reveals a stark contrast in Kenya’s export patterns. Currently, 65% of Kenya’s African exports are directed to East African Community (EAC) countries, valued at approximately $1.8 billion (Ksh 232 billion) annually.
However, the remaining 35% ($950 million), equivalent to Ksh 122 billion, is spread across the 45+ African nations.
Dr Ruto emphasized that this imbalance presents both a challenge and an opportunity.
“While we’ve established strong trade links within East Africa, we’re only scratching the surface of the broader African market,” he noted.
“The African Continental Free Trade Area (AfCFTA) gives us the framework to diversify our export destinations.”
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Erick Rutto Reveals Kenya’s Top Exports to EAC
Meanwhile, the East African Community has remained Kenya’s key export market. Kenya’s top exports to EAC include manufactured goods (45%), agricultural products (30%), and petroleum products (15%).
In contrast, the country’s exports to the rest of Africa are dominated by tea (22%), horticultural products (18%), and pharmaceutical products (12%).
KNCCI president said this suggests that Kenya needs different strategies for different regional markets.
The AfCFTA creates a unified market of 1.3 billion people with a GDP exceeding $3.4 trillion.
Kenya’s exports to African countries currently represent 40% of our total exports, valued at $2.7 billion annually (Ksh 348.3 billion).
Rutto opined that full implementation of AfCFTA could increase this by 25% within five years, adding $675 million (Ksh 86.9 billion) in export revenue.
“Our manufactured goods exports could grow by 29%, with food, textiles, and pharmaceuticals leading the expansion,” he added.
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Challenges Affecting Export Markets
KNCCI noted that recent studies have identified several persistent barriers hindering Kenya’s export growth.
Transport costs remain high, accounting for 25-35% of the final product cost, compared to the global average of just 15%.
Non-tariff barriers are also a significant challenge, affecting 65% of potential exports. Document processing times are another issue, with the average taking 49 days, far longer than the best global practice of 10 days.
Additionally, limited financing continues to be a concern, as only 28% of Kenyan Small Micro Enterprises (SMEs) report having adequate export financing to support their growth.
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