Kenyan exporters are facing a potentially bigger opportunity to enter the Chinese market as the country seeks to narrow a merchandise trade deficit that widened to approximately Ksh1.65 trillion in 2025.
The opportunity comes amid China's decision to grant approximately 98.2 per cent zero-duty market access for eligible Kenyan products under the Early Harvest Agreement, opening a potentially significant market for local businesses.
Kenya's merchandise exports grew by more than 10 per cent in 2024 to surpass Ksh1.1 trillion, but the widening trade deficit has renewed pressure on the country to increase exports, add value to local products and help more businesses penetrate international markets.
The development comes as Kenya also seeks to take advantage of opportunities created by the African Continental Free Trade Area (AfCFTA), as well as existing trade arrangements with the European Union and the United States.
The opportunities were highlighted during NCBA's SME Exporters Forum in Nairobi, which brought together government representatives, exporters, the Kenya Export Promotion and Branding Agency (KEPROBA), development partners and other industry stakeholders to discuss ways of expanding Kenya's export base.
NCBA Group Director, Retail Banking, Dennis Njau, argued that Kenya already has products capable of competing internationally, but businesses need the financial and technical capacity to reach those markets.
"Kenya does not lack products the world wants. Our task now is to ensure more Kenyan businesses have what they need to take those products to the world," Njau remarked.
Njau noted that access to foreign markets alone would not be enough to turn the emerging opportunities into sustainable export growth.
He added, "Access to markets creates opportunity, but businesses also need financing, trade expertise and trusted partnerships to convert that opportunity into sustainable growth. That is where NCBA comes in."
The bank highlighted trade financing, working capital, foreign exchange, hedging and market intelligence among the tools exporters can use to manage the risks associated with international trade.
For Kenyan businesses, the Chinese market could be particularly significant given the scale of bilateral trade between the two countries and the large consumer base available to exporters.
However, the new market access will only translate into higher export earnings if Kenyan companies can meet international quality requirements, maintain sufficient production capacity and establish reliable supply chains.
KEPROBA Economic Intelligence Officer Kevin Oluoch stressed that government, financial institutions and the private sector will need to work together if Kenya is to turn market access into actual export growth, saying "Kenya's export ambitions will only be realised through strong partnerships between government, financial institutions, development partners and the private sector."
Oluoch added that SMEs require more than access to buyers to compete internationally. He added, "Together, we can equip SMEs with the market access, financing and support they need to compete globally and unlock greater value for the country's economy."
The push comes against the backdrop of a persistent imbalance between Kenya's imports and exports. While exports have recorded growth, the size of the trade deficit means the country continues to spend significantly more on imported goods than it earns from merchandise exports.
Increasing exports, particularly higher-value manufactured and processed goods, is therefore viewed as one route to improving Kenya's external trade position.
For SMEs, the challenge will be converting preferential market access into actual orders. Businesses seeking to benefit from the Chinese opportunity will need to identify products with demand, comply with export standards and navigate financing, currency and logistics requirements.
NCBA is also scheduled to host its annual China Market Linkage Programme later this year, bringing Kenyan businesses together with potential buyers, suppliers and strategic partners in China.
The programme is expected to provide another avenue for Kenyan exporters to explore the market as Kenya attempts to increase the value and diversity of goods it sells abroad.
With China's expanded tariff access coming alongside opportunities under AfCFTA and other trade agreements, Kenyan exporters have more potential markets to pursue. The bigger test, however, will be whether local businesses can scale production and compete effectively enough to turn those opportunities into higher export earnings.
