Uganda orders keep private sector engines roaring

Tuesday March 8 2016

Trucks carrying goods line up at at the

Trucks carrying goods line up at at the Kenya-Uganda border in Busia. PHOTO | TOM OTIENO | NATION MEDIA GROUP 

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Rising orders from Uganda kept Kenya’s private sector on a sustained expansion according to the February Purchasing Managers’ Index (PMI) data released by CfC Stanbic Bank.

The study that polls 400 executives stated that growth of total new work was bolstered by a sharper rise in new business from abroad during February.

The index shows that demand for Kenyan products in the regional markets continued to gather momentum even as peaceful elections also improved sentiment.

“The respective seasonally adjusted index posted one of its highest readings since data collection began. Higher exports were widely attributed to stronger demand in neighbouring African economies notably, Uganda was mentioned as a key source of incoming new business,” the index read.

Uganda may have sprung back as Kenya’s key trading partner after slipping below Pakistan late last year.

According to the Kenya National Bureau of Statistics, the value of Kenyan exports to Pakistan surpassed Uganda in November and December last year.


Kenya exported goods worth Sh3.8 billion to Uganda compared to Sh4.3 billion exported to Pakistan in November.

Kenya’s export to Uganda in the month of December climbed slightly to Sh4 billion but was still unable to catch up with Pakistan which stood at 4.6 billion in value at the end of the year.

Kenya is keen on growing its stagnated export portfolio and the CFC index indicates that the country may be moving in the right direction with new export orders contributed to growth of total new business in February.

“The latest increase was the steepest in ten months, with firms commenting on high demand from neighbouring African economies including Uganda,” the report read.

February also saw higher output, new orders and employment which ensured that overall business conditions improved solidly again.

Though slower than in January, the respective rates of expansion were still marked overall.

“The private sector continued to maintain a firm growth momentum in February, albeit, at a slower pace than the previous two months. As we pointed out last month, higher backlogs of work have consequently led to higher employment within the Kenyan private sector,” Mr Qureishi said.

Mr Qureishi also noted that the recent stability in the exchange rate should ensure both input and output costs remain well contained for firms which will help to bolster output further.