Kenya’s trade deficit has dropped to its lowest level in four years, helped by a sharp fall in fuel and food imports during the first quarter of the year, new data from the Kenya National Bureau of Statistics shows.

The gap between what the country exports and imports stood at Sh372.12 billion between January and March, down from Sh382.18 billion in the same period last year.

This is the smallest trade imbalance since the first quarter of 2021 when it stood at Sh317.32 billion.

The fall in the deficit was largely due to reduced spending on fuel imports from the Middle East, which dropped by 19.10 percent to Sh137.19 billion, down from Sh169.59 billion a year earlier.

This was supported by falling international oil prices and a move by Kenya to negotiate lower supply premiums with its key suppliers.

Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil Company – which sell petroleum to Kenya in shillings – agreed to cut their prices by up to 14 percent per tonne earlier this year under an extended deal with the Kenyan government.

These changes helped the country reduce its overall import bill by 4.66 percent to Sh647.58 billion in the three months, further supported by a stronger shilling against the US dollar.

The cost of imported food and beverages dropped by 30.32 percent to Sh57.92 billion during the same period.

However, there was an increase in spending on nonfood industrial supplies and machinery, which rose by 7.5 percent and 13.38 percent respectively, to Sh252.23 billion and Sh89.58 billion.

Despite the reduced import bill, Kenya’s export earnings also took a hit, falling 7.26 percent to Sh275.46 billion from Sh297.03 billion in the first quarter of last year. This is the first drop in export earnings since 2019.

Earnings from food and beverage exports fell by 10.53 percent to Sh103.78 billion, while sales of nonfood industrial supplies dropped by 5.67 percent to Sh58.71 billion. Tea exports brought in Sh46.08 billion, a 20.23 percent decline from Sh57.77 billion last year, partly due to the strengthening of the shilling.

Coffee exports, however, provided a bright spot, rising by 51.51 percent to Sh15.66 billion from Sh7.60 billion in the same period last year.