The Central Bank of Kenya (CBK) Governor Kamau Thugge now says Kenya is set to lose Ksh12.8 billion ($100 million) annually in exports to the United States following President Donald Trump’s decision to impose a 10 per cent reciprocal tariff on Kenyan exports to America.
Speaking during the Monetary Policy Committee (MPC) meeting held on Wednesday, April 9, Thugge clarified that the impact of Trump’s new levy on the country’s exports would not have any significant impact on Kenya’s economy.
According to him, Kenya generates roughly Ksh84 billion ($650 million) in exports to the US annually; however, this amount could be marginally impacted by the new tariffs.
The CBK governor also maintained that the new export taxes by Trump’s administration would not have any impact on the local currency, which has been stable against the US currency for a better part of last year and this year.
As of Wednesday, April 9, data from the London Stock Exchange Group (LSEG) quoted the shilling currently trading at Ksh129 against the United States dollar.
“We roughly export $650 million, and in an extreme case, if that does not change, then the 10 per cent could have an impact and reduce our export to the US by $100 million,” Thugge clarified.
“The $100 million is relatively small compared to our GDP, and we do not expect that $100 million would have any significant impact on the balance of payment and the exchange rate,” he added.
Last week, the US government imposed sweeping reciprocal tariffs on goods from countries across the world, including Kenya.
Trump’s new executive order put in place an escalating tariff system in which all tariffs start at a minimum of 10 per cent upwards based on several factors, including balance of trade and diplomatic relations.
Kenya, which has been America’s sixth biggest trading partner in Africa, is set to pay a total of 20 per cent levy on exports to the US cumulatively. Also affected are all other African countries, with most nations slapped with the minimum tariff rate, like Kenya.
However, Trade Cabinet Secretary Lee Kinyanjui recently expressed confidence in overcoming Trump’s latest order, noting that while the new tariffs posed significant challenges to the country, they also came with unique benefits.
For instance, Kinyanjui noted that the reciprocal tariff on Kenyan exports posed a great opportunity for the country’s textile industry, which he said was yet to be exploited fully.
He added that the move presented an opportunity for the government to invest in the local textile business and promote the leather business.
