NAIROBI, May 14 (Xinhua) -- Kenya is considering introducing a series of incentives in order to boost the country's exports earnings, the country's export agency said on Monday.
Peter Biwott, the CEO of the Export Promotion Council (EPC), told a media briefing in Nairobi that the growth of exports has been declining in the past five years.
"In order to reverse the trend of slowing growth of export earnings, we shall soon roll out incentives to enable local producers to penetrate international markets," Biwott said during a trade forum organized by EPC.
Biwott said that the incentives include the formation of export fund, Export Import Bank as well as export guarantee schemes.
Current incentives for manufacturers include the Export Processing Zones as well as Manufacturing under bond.
According to the export agency, the incentives in place are not sufficient to enable exports to grow at the desired pace. Biwott said the incentives will enable small and medium enterprises to play a role in the export trade.
He said that the export fund will also help Kenya to penetrate African markets especially in countries that are perceived to have political risk.
"Kenya firms have in the past experienced revenue loss when they have exported goods to African countries that have later being affected by civil wars or undergone foreign exchange distress," he said.
The EPC chief observed that the government will compensate firms that lose revenue if their foreign buyers don't remit payment.
The CEO said that they will also provide banks that lend to exporting SMEs with guarantees to repay financial assistance that has been extended in case the small firms default on their loans.
According to Biwott, Kenya also plans to fund Kenyan firms to participate in international trade fairs in order to enable them to find and explore new markets.
He noted that all developed countries have already set up schemes to assist their firms in exporting their goods to the international market.
Data from the Economic Survey of 2018 shows that exports last year hit less than six billion U.S. dollars against imports of 17 billion dollars.
EPC noted that Kenya needs to diversify its export markets and destinations in order to reduce the trade imbalance.
He said that five products alone constitute about 60 percent of all export earnings making the country vulnerable to external shocks.
Chris Kiptoo, Principal Secretary in the Ministry of Foreign Affairs and International Trade, said Kenya's export strategy contains a detailed road map to raise the country's export performance.
Kiptoo said that Kenya's target is to achieve double digit growth in exports in order to eliminate the trade deficit in the next ten years.
He said that most of the country's exports are concentrated in unprocessed agricultural products.
"We want to ensure that agricultural produce are processed before they are sold internationally in order to increase the foreign exchange earnings," he added.
The PS noted that the government has prioritized the development of other sectors of the economy to make them produce export competitive products.
Kiptoo said that Kenya's manufacturing sector used to supply the East African Community bloc with industrial products but this has been on the decline.
"We are therefore seeking to sell manufactured products to countries in Africa outside of the EAC," he said, adding that Kenya has already signed preferential trade agreements with most countries in East, Central and South Africa.
"We hope to further boost our exports once the Africa Continental Free Trade Agreement is fully operational," he added.
He said that once enacted, the proposed trade remedy bill will ensure that countries that dump their products on the Kenyan markets are penalized with stiff fines in order to protect domestic industries.
