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Balance of Payments and International FDI Position in Kenya: FY2019/20

Kenyan merchandise export earnings have been volatile but started recovering since 2017. The export earnings growth has not been sufficient to improve Kenya’s current account balance. The balance of payments recovered to a surplus in 2018 and gross official reserves increased slightly due to the consistent inward foreign direct investment (FDI) inflows; despite the outward FDI outflows. These capital flows have improved Kenya’s balance of payments but deteriorated the country’s net international FDI position. Nonetheless, Kenya’s balance of payments is projected to recover to surplus from 2018 onwards, which is projected to support growth of gross official reserves in the medium-term.