Kenya’s personal car imports showed a decline for the first time in four years on the depreciation of the shilling and a rise in import costs.
“As far as car importations are concerned there are three things that come into play, there are the interest rates, there is the currency and there is the import cost,” said Teddy Yanga, a Research Analyst at AIB Capital.
Yanga says you have to look at the lending rates and import costs to determine why there is a reduced amount of car imports.
He adds: “If these two costs remain high, we expect to see these car imports at lower levels as compared to the previous years.”
“We’ve seen the shilling stabilising and we expect it to be stabilising into the midterm so if the shilling stabilises and remains where it is – these will be the two factors to look at.”
The analyst says he sees the tourism sector picking up; with an increase in foreign inflows from horticulture as well as an increase in tea and coffee, which is expected to boost up the Kenyan shilling from further slides.