Parliament orders probe on Kenya’s trade attaches abroad over incompetency
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Parliament calls for investigations on the qualification and suitability of trade attachés abroad in what could expose incompetent individuals
Parliament calls for investigations on the qualification and suitability of trade attachés abroad in what could expose incompetent individuals.
Lawmakers have given the Trade Ministry six months to conduct a comprehensive assessment on the qualification and suitability of trade attachés abroad in what could expose incompetent individuals who have failed to grow or find new export markets for Kenya’s goods and services.
The National Assembly Committee on Trade, Industrialization, and Cooperatives believes that despite consuming a “huge share” of the ministry’s annual budget in attaché allowances, Kenya’s trade missions abroad have struggled to open up new markets for Kenyan products.
“An assessment should be conducted to determine if there is a linkage between the foreign markets and the skills possessed by the attachés stationed abroad,” the committee recommended in its report after hearing the ministry’s presentation on budgetary allocations for the financial year starting July.
“This should be achieved by matching the expertise and capabilities of the attaches with specific demands and requirements of the target markets.”
The proposed review comes at a time when the country is still struggling to diversify its key exports away from traditional tea, horticulture, and coffee as well as discover new markets.
The report should be presented in the National Assembly by December.
Over the years, ministry officials have cited concerns about “tariff escalation where you sell a produce raw, you are generally charged zero duty while you sell a product semi-processed or processed, you are charged double-digit taxes” as the reason for the sluggish transition to value-added exports.
According to official statistics, Kenya’s top five export destinations—Uganda, the United States, the Netherlands, Pakistan, and Tanzania—account for around 42.22 percent of the country’s total Sh868.55 billion in exports for 2022.
The share of the Big Five export markets has grown from about 39.92 percent of Sh612.93 billion total goods export value back in 2018, signaling overreliance on traditional destinations.
The slower growth in exports than imports has seen Kenya’s goods trade deficit – the gap between merchandise exports and imports – nearly double in six years to Sh1.62 trillion last year from Sh853.69 billion in 2016.
This has in part been helped by the weakening shilling.
“The committee noted that the offices of trade missions are not achieving value for money spent on sustaining them abroad. In addition, a huge share of the budgetary allocation is spent on allowances of the trade attaches,” the Trade Committee of the National Assembly writes in the report published last week.
“The offices are consuming resources without generating measurable returns such as getting new markets for Kenyan exports.”
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Kenya in July 2018, for instance, unveiled the Integrated National Exports Development and Promotion Strategy in a bid to diversify its exports and expand destinations with a key focus on populous Chinese and Indian markets.
Five ambassadors were posted to the two giant Asian economies and tasked with expanding the market for Kenya’s traditional exports of tea, coffee, cut flowers, vegetables, and fruits such as avocadoes.
This was expected to narrow the goods trade deficit between the two countries, which have over the years accounted for about 40 percent of exports into Kenya on average while buying less than two percent of goods, with containers going back largely empty.
Kenya’s goods trade deficit with China, however, widened to $3.62 billion (Sh503.18 billion where $1 is equivalent to Sh139) in 2022 from $3.51 billion (Sh487.89 billion) in the prior year, according to data collated by the Central Bank of Kenya.
A persistently higher trade deficit, economists say, slows down the creation of new job opportunities for the growing number of skilled youth as most revenue earned within Kenya is spent on buying goods from foreign countries, thereby raising production and job openings in source markets.
A widening import-export gap also piles some pressure on the shilling as the demand for dollars outstrips the supply.
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