Kenya may soon initiate barter trade with Egypt on tea exports as the North African country looks to preserve its dollars due to a biting shortage.
According to a report by Bloomberg, Egypt which is the second-largest importer of Kenya’s tea is toying with the idea of paying for the Kenyan commodity with another valuable commodity due to a dollar shortage.
Treasury CS Prof. Njuguna Ndung’u said the request came from Egypt stating that the tea exports were lying in Mombasa because Egypt had no dollars to pay.
”Right now we cannot get your tea. It’s lying in Mombasa because we have no dollars to pay,” the Egyptian ambassador to Kenya stated.
Treasury CS Njuguna Ndung’u during a meeting with UN officials at his office on February 24, 2023.
The National Treasury
“We’ll get your tea and you also come and decide what you get from us,” the Egyptian envoy further stated.
Reports from the Tea Board of Kenya indicate that the Kenyan tea exports to its largest importers Pakistan and Egypt fell by 23% and 13% respectively in the first eight months of 2023.
“We are still in a dollar global shortage and that is why countries like Egypt and Pakistan want to do barter trade,” CS Njuguna Ndung’u said.
Kenya itself has previously floated the idea of barter trade with Pakistan to circumvent the dollar shortage where the idea was to receive rice from Pakistan in exchange for Kenyan tea.
President William Ruto has tasked Agriculture CS Mithika Linturi among other stakeholders from the tea sector to work on an agreement with the South Asian country.
Even so, the plan has not yet materialised to date.
Meanwhile, the Kenyan Shilling has continued to depreciate against the dollar due to various factors including lower foreign exchange inflows and higher global interest rates.
The Kenyan shilling has depreciated by 18% in 2023 while the Egyptian pound is also struggling against the dollar after shedding 20% over the same period.
Agriculture Cabinet Secretary Mithika Linturi during a meeting with the Council of Governors on Monday, November 28, 2022.
Ministry of Agriculture