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Kenya is banking on the Comprehensive Economic Partnership Agreement with United Arab Emirates to grow its exports as part of the government’s push for strategic trade and investment.
The deal whose talks begun in 2022 was signed yesterday.
President William Ruto and His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates, presided over the signing of the agreement marking a historic milestone in the economic relations between the two nations.
The deal could also see the Middle East country give China stiff competition as Kenya’s top import source, currently second after the Asian country.
The CEPA is the first agreement of its kind signed by the UAE with a mainland African country, representing a transformative step in enhancing trade, investment, and economic cooperation.
The agreement strengthens Kenya’s position as a gateway to East and Southern Africa and reaffirms the UAE’s role as a global logistics and financial hub connecting the Middle East, Asia, and beyond, State House said in a statement.
It is the second major deal in recent years after the Economic Partnership Agreement (EPA) with the European Union (EU) signed in December 2023 and took effect in July 2024.
The country also has a pact with the UK signed in 2018 which secured duty-free, quota-free access to the market.
Kenya is also chasing a Strategic Trade and Investment Partnership (STIP) with the US but this remains pending more than four years since talks begun in July 2020, with changes in leadership in both countries slowing down the process.
According to Prime CS Musalia Mudavadi, CEPA aims to deepen trade, investment and economic collaboration.
“Through the gradual removal of tariff and non-tariff barriers on most traded goods, it paves the way for a robust free trade area between the two countries,” Mudavadi said in Abu Dhabi.
UAE has in recent years overtaken India to become the second top import source for Kenya after China, with imports valued at Sh411.5 billion in 2023, the economic survey 2024 by the Kenya National Bureau of Statistics (KNBS) shows.
The value of imports from China during the year was Sh459 billion with India coming in third, followed by Saudi Arabia and Malaysia as the top five import sources for the country.
Exports to the Emirates were valued at Sh55.9 billion of the Sh106.6 billion worth of exports to the Middle East. Kenya’s exports to the UAE are mainly tea, meat and meat products, vegetables, fruits, and flowers.
UAE’s exports are mainly petroleum oil, plastic and copper products, iron and steel, machinery, chemicals and assorted household products.
The partnership aligns with Kenya’s Bottom-Up Economic Transformation Agenda by unlocking new markets for priority value chains, attracting foreign direct investment, and promoting technology transfer to support livelihoods across the country.
“It sends a clear signal to
global markets of Kenya’s readiness
to expand its role as a global trade
partner,” State House said.
