Improved performance of the tourism sector helped narrow the gap between the value imports and exports in the third quarter, fresh data from the Kenya National Bureau of Statistics shows.
The state-owned statistician says that earnings from the travel account more than doubled to Sh25.86 billion compared with Sh12.28 billion in the corresponding period last year. This is captured in the KNBS' Balance of Payments report for July to September period.
The 110.6 per cent growth in travel receipts helped cut trade deficit, which narrowed by 10.4 per cent from Sh112.37 billion in the third quarter of 2015 to Sh100.68 billion in the corresponding quarter of 2016.
A trade deficit, which is also known as the current account deficit, means the value of imports is greater than the value of exports.
“The improvement in the services account during the quarter under review contributed to the narrowing of the current account deficit,” KNBS said in the report published last Friday.
Net income from international trade in services increased by 69.8 per cent to Sh34.74 billion, the KNBS says, adding: “The increase was on account of increased travel receipts boosted by conference tourism during the third quarter of 2016.”
The rebounding tourism sector a strong growth of 13.8 per cent in the quarter under review (July to September) compared to a contraction of 6.5 per cent during a similar period of 2015.
“The upturn in the sector was mainly supported by the hosting of high profile meetings in the country during the review quarter as well as improved security situation,” KNBS says in the Gross Domestic Product report for third quarter, simultaneously released with the BOP report.
The significantly improved performance was also boosted by downgrading of travel advisories and measures such as the charter incentive programmes, visa fee waiver and, facilitation of inbound tourist travel.
The official data shows visitor arrivals through the Jomo Kenyatta International Airport and Moi International Airport stood at 262,149 between July and September 2016 compared to 208,397 in the same period last year.
Kenya Tourism Board, the marketing agency which records the visitors arrivals data, recently said the recovery of the sector will not be slowed down by August 2017’s general election.
KNBS said difference between in value of imported goods and exports – technically called merchandise trade balance and which significantly influence the current account balance – expanded by 2.324 per cent from a deficit of Sh213.21 billion in July to September period of 2015 to Sh217.99 billion this year.
This, KNBS said, reflects a faster decrease in exports compared to the decrease in imports on a free on board basis.
The data shows remittance inflows from Kenyans living abroad grew during the quarter under review to Sh43.56 billion from Sh40.62 billion in the third quarter of 2015.
Net financial inflows went up by 3.2 per cent from Sh157.61 billion in the third quarter of 2015 to Sh162.57 billion in the third quarter of 2016.
KNBS said this was partly as a result of disbursements towards the Standard Gauge Railway.
The data shows gross official reserves increased to Sh830.6 billion as at the end of third quarter of 2016 from Sh706.7 billion recorded as at the end of the third quarter of 2015.