What Kenya seeks to unravel in UAE deal

This photo was taken on October 27, 2020, as a ship unloads at the port of Mombasa. Photo | Laban Valloga | NMG

A new trade deal negotiated with the United Arab Emirates (UAE) is expected to open huge markets for Kenyan coconuts and potatoes, as well as other agricultural products, to boost non-oil trade between the two countries.

The two countries launched negotiations on the United Arab Emirates-Kenya Comprehensive Economic Partnership Agreement (UAEK-CEPA) in July to increase trade in goods and services and investment.

The trade deal is an initiative by former Kenyan President Uhuru that the private sector hopes the new government will stick to.

“This is the latest agreement we have reached and we want to continue it under President William Ruto. It is ready for negotiation and has been put on hold for the transition and the UAE is eagerly waiting for us to get back to the negotiating table,” traded and corporate chief secretary Johnson Weru said in a briefing with the private sector.

He said it would be a huge test for Nairobi as it was the first time the country had negotiated directly with the Middle East.

“We hope we can move forward with more of the products we need to watch and take back some of the products they import, like coconuts from India and potatoes from Australia, and we’re only four hours away. We can’t get those without a deal. privilege.”

As the business and trade hub of the Middle East, Dubai has long been regarded as Kenya’s trade gateway with the rest of the world. Kenya imports oil, broadcasting equipment and plastics, while exporting tea, cut flowers, fruit, lamb and goat meat.

But the relationship between the two countries is marked by a huge trade imbalance in the UAE’s favor.

Thanks to soaring oil prices, the UAE has overtaken India to become Kenya’s second-largest source market after China.

Import spending from the Middle East – mostly petroleum products – more than doubled in the first six months of this year, according to Kenya’s National Bureau of Statistics.

Kenyan traders spent a record 177.88 billion shillings buying goods from the oil-rich country, more than double the 77.39 billion shillings spent a year earlier, or 131.90 percent.

This made the UAE the second largest import market in Kenya, ahead of India, whose shipments in the country surged 36.61 percent to Sh150.25 billion during the review period.

Total imports from the UAE will almost double to Sh178.5 billion in 2021 from Sh92.3 billion in 2020 due to high spending on motor gasoline, gas oil and other refined petroleum products. Exports to Dubai edged up 0.4 percent to Sh34.6 billion.

Once concluded, the trade agreement is expected to be aligned with the East African Community Trade Treaty.

The UAE already has free trade agreements with the Gulf Cooperation Council and similar trade agreements with other countries such as Israel, Indonesia and India.

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