•The CBK Quarterly Economic Review shows that the country’s trade also narrowed by 23 percent.
•Net receipts on the services account also recorded a decline of $240 million (Sh34.2 billion) to $280 million (Sh39.9billion).
Increased remittances by Kenyans abroad and a rise in tea exports narrowed Kenya’s current account balance to $966 million (Sh137.55 billion), according to CBK.
The balance is a drop from the $1,557 million (Sh221.7 billion) recorded in the last quarter of 2021.
The current account balance is part of the country's financial inflow and outflow record, that forms part of the balance of payments, the statement of all transactions that Kenya made with its trading partners.
The Central Bank of Kenya attributed the reduction to a strong performance of export of goods and services as well as increased remittances.
The CBK Quarterly Economic Review shows that the country’s trade also narrowed by 23 percent from a deficit of $3,357 million (Sh477.9billion) in the fourth quarter of 2021 to a deficit of $2,572 million (Sh366.1 billion) in the fourth quarter of 2022.
“Despite a fall in horticulture receipts, the value of merchandise exports increased to USD 1,762 million (Sh250.8billion) in the fourth quarter of 2022 from $1,708 million (Sh243.1 billion) in the same period in 2021, owing mostly to increased earnings from tea, chemicals, and manufactured products,” CBK said in the report.
In the review period, tea exports increased by 13 percent year on year, supported by increased demand from Kenya’s traditional markets.
Exports of manufactured goods increased by 16 percent in the period under review but earnings from horticulture declined by 17 percent.
The value of merchandise imports decreased by 14 percent to $4,334 million (Sh616.9 billion) from $5,065 million (Sh721 billion) a year earlier largely on account of reduced imports of machinery and transport equipment.
However, imports of petroleum products remained high due elevated international crude oil prices.
Net receipts on the services account also recorded a decline of $240 million (Sh34.2 billion) to $280 million (Sh39.9billion), compared to the third quarter when it stood at $520 million (Sh74 billion).
The opening up of the skies saw receipts from travel services improve by $42 million, (Sh6 billion) as international travel picked up.
The primary account balance which is the difference between the amount of revenue the government collected and the amount it spent on providing public goods and services widened by $16 million (Sh2.3 billion).
“This saw the deficit hit $420 million in the fourth quarter of 2022 from a deficit of $404 million in the same period last year, reflecting dividend payments on portfolio investment,” the report reads in part.
The secondary income balance rose by $62 billion, while remittances recorded a three percent rise to $1,047 million (Sh149 billion) in the fourth quarter of 2022 from $1,015 million (Sh144.5 billion) the previous year.
Imports from China accounted for 21 percent of total imports to Kenya making it the largest single source of imports, despite decreasing by 17 percent in the fourth quarter of 2022 when compared to the same quarter in 2021.
Imports from the UAE rose by $470 million, while those from Africa declined by $61 million to USD 508 million in the fourth quarter of 2022, reflecting reduced imports from Egypt
The value of goods exported to Africa in the fourth quarter of 2022 was USD 729 million, accounting for 41 percent of total exports.
Exports to EAC region fell mainly due to reduced exports to Rwanda, Uganda, and Tanzania. The share of exports to the EU was 20
percent, while the proportions to the Netherlands, the United Kingdom, the United States, and Pakistan were nine percent, five percent, eight percent, and nine percent, respectively