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Kenya's trade deficit widened to Sh1.7 trillion in 2025, from Sh1.6 trillion the previous year, driven by a sharp rise in the import bill amid a drop in exports.

This comes as the volume of the merchandise trade increased by 1.9 per cent to Sh3.9 trillion in 2025, the Economic Survey 2026, released by Treasury CS John Mbadi yesterday, shows.

The import bill increased to Sh2.77 trillion from Sh2.71 trillion last year, as the country remained a net importer mainly from China.

The value of exports slightly fell to Sh1.119 trillion to Sh1.112 trillion, as the agriculture sector, which forms part of Kenya’s biggest export commodities, and manufacturing, recorded a decline in performance.

The agriculture, forestry and fishing sector, which accounts for over a fifth of the economy expanded by 3.1 per cent, compared to 4.6 the previous year.

The sector accounted for 7.1 per cent of national GDP, a decline from 7.3 per cent in 2024. This means Kenya had lesser produces and products to offer to the global markets.

During the year, exports to the Netherlands, a key export market for flowers, Spain, Sweden, and Poland all dropped, weighing down the growth of exports to the EU, which closed the year at Sh263.9 billion.

The value of exports to the US dropped to Sh79.7 billion from Sh88.7 billion with those to the UK also falling to Sh60 billion from Sh60.9 billion.

Exports to the United Kingdom declined largely due to decreased domestic exports of tea, according to the Kenya National Bureau of Statistics (KNBS).

The drop in value of exports to the US has been pegged on decreased domestic exports of titanium ores and concentrates (after the closure of Base Titanium operations in Kwale following the end of mine life), and articles of apparel and clothing accessories, as well as re-exports of kerosene-type jet fuel.

Exports to the Far East, which includes China, India, Japan and Pakistan also fell to Sh275.6 billion from Sh317.5 billion.

On the contrary, value of imports from China grew to Sh671.2 billion from 576.1 billion in 2024 as the Asian giant remained the biggest import source for Kenya, followed by India (Sh293 billion).

“The rise in import bill was driven by growth in imports of industrial machinery, motor vehicles and iron and steel,” Kenya National Bureau of Statistics notes in its report.

Expenditure on fuel and lubricants totaled 583.7 billion in 2025.

“The current account deficit worsened from Sh285.5 billion to Sh373.3 billion in 2025, driven by growth in import expenditure which rose by Sh70.7 billion and a decline in the secondary income receipts by Sh67.1 billion,” the survey states.

Meanwhile, Africa remained Kenya’s leading export destination, with earnings increasing to Sh452.8up from Sh425.6 billion.

This growth was largely driven by stronger trade within the East African Community, particularly Uganda, which recorded a 28.8 per cent increase and accounted for 14.5 per cent of total export earnings.

Value of exports to the EAC increased to Sh351.2 billion from Sh321.5 billion, despite a drop in exports to Tanzania.

The country’s real Gross Domestic Product (GDP) grew by 4.6 per cent in 2025, a drop from 4.7 per cent in 2024.