Business Daily Africa - 14 September 2022
What Kenya seeks to unlock in UAE pact
A new trade deal being negotiated with the United Arab Emirates (UAE) is expected to open the giant market to Kenya’s coconuts and potatoes among other agricultural products to boost non-oil trade between the two countries.
The two countries in July launched talks on United Arab Emirates-Kenya Comprehensive Economic Partnership Agreement (UAEK-CEPA) to increase the volume of trade in goods and services and investment.
The trade pact was an initiative of former President Uhuru Kenya and the private sector is hoping the new government will stay on it.
“This is the latest agreement we have and we hope will continue with it under President William Ruto. It is ready for negotiation and have paused it for the transition and Emiratis are eagerly waiting for us to go back to the table," said Johnson Weru, the Trade and Enterprise principal secretary, in a briefing with the private sector.
He said this will be a big test for Nairobi because this is the first time the country will be negotiating directly with the Middle East.
"We are hoping we will be able to advance much more we need to watch and take back some of the products they import such as coconut from India and potatoes from Australia while we are just four hours away. We cannot get those privileges without a pact.”
Dubai, as the commercial and trading hub of the Middle East, has long been regarded as the gateway of trade between Kenya and the rest of the world. Kenya imports oil, broadcasting equipment and plastic while exporting tea, cut flowers, fruits, and sheep and goat meat.
But the relationship between the two countries has been marked by huge trade imbalance in favour of the UAE.
UAE is now Kenya’s second largest source market after China on the back of soaring oil prices, having overtaken India.
Data from Kenya National Bureau of Statistics show expenditure on imports — largely petroleum products — from the Middle East more than doubled in the first six months of the year.
Kenya traders spent a record Sh177.88 billion to buy goods from the oil-rich country, more than double, or 131.90 percent jump more than Sh77.39 billion in a similar period last year.
That has placed the UAE second in Kenya’s top import markets, above India whose consignments in the country shot up 36.61 percent in the review period to Sh150.25 billion.
In 2021, total imports from UAE almost doubled to Sh178.5 billion from Sh92.3 billion in 2020 on high expenditure on motor spirit premium, gas oil and other refined petroleum products. Exports to Dubai recorded a marginal increase by 0.4 percent to Sh34.6 billion.
The trade pact once concluded is expected to be in line with East Africa Community trade treaty.
UAE is already operating on a free trade agreement with Gulf Cooperation Council and similar trade pacts with other countries like Israel, Indonesia and India.