APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA 2.3.6 International Trade and Balance of Payments 55. External sector developments have been associated with challenges. There has been a surge in imports causing the current account deficit to widen, engendering external sector vulnerability. Statistically, the current account deficit increased from US$2.2 billion in 2010 to US$3.3 billion in 2011 and further to US$4.5 billion in 2012. The rise in total export earnings compared to the decline in total import bill resulted in the improvement of exportimport ratio from 33.2% in 2014 to 36.8% in 2015. Total exports recorded in 2014 rose by 8.2% to KSh 581 in 2015. In contrast, total imports declined by 2.5% to KSh 1,578 billion over the same period. Thus, in 2015, the balance of trade improved from a deficit of KSh 1,081 billion registered in 2014 to a deficit of KSh 997 billion. This led to a slight increase in volume of trade from KSh 2,156 billion in 2014 to KSh 2,158 billion in 2015. The rise in total export earnings compared to the decline in total import bill resulted in the improvement of export-import ratio from 33.2% in 2014 to 36.8% in 2015. The leading export earners were tea, horticulture; articles of apparel and clothing accessories and coffee collectively contributing 54.6% of total export merchandise. 56. The main challenges that the country currently faces are in how to make devolution work better to improve the welfare of the people, combat rising inequality, and fight corruption and money laundering. Success in this sphere will catalyse growth and enhance economic prosperity. 2.4 Major Challenges for consolidating democratic governance and socio-economic development 57. With all the success and innovativeness in constitutional and institutional reform that characterized the last decade of change toward consolidating democracy and good governance in Kenya, certain factors continue to undermine progressive improvement in governance. They include, among others: 58. Public disenchantment with the political process arising from: • A perceived gap between the constitutional and institutional promises of effective public participation in governance and the reality of lack of meaningful public participation; • High levels of poverty accompanied by deepening inequality arising from historical imbalances in the distribution of natural and other resources and opportunities; • Perceptions of corruption and its debilitating effects on democracy, fairness, equity, and development; and • Perception and reality of constitutional and institutional provisions for representation and entitlements for groups marginalized by considerations of history, gender, age, and disability, among others. | 69 |