President William Ruto of Kenya and His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, recently signed the Comprehensive Economic Partnership Agreement (CEPA), that not only redefines the trade relationship between Kenya and the UAE but also marks a significant commitment to working together for mutual benefit.
As the first of its kind between the UAE and a mainland African country, the CEPA opens the door to a new era of partnership, positioning Kenya as a crucial gateway to East and Southern Africa while enhancing the UAE’s role in strengthening economic ties across the region.
Trade between Kenya and the UAE has surged over the past decade, with 2023 witnessing a remarkable Sh445 billion in total trade volume.
In fact, the UAE is now Kenya’s sixth-largest export destination and the second-largest source of imports, accounting for 16% of Kenya’s total imports. This burgeoning trade relationship highlights an economic interdependence that benefits both nations.
Kenya’s agricultural products are at the forefront of this exchange, with meat alone contributing Sh9.9 billion in exports—over half of the country’s total meat exports.
Additionally, fruits like pineapples, avocados, and mangoes, along with vegetables and flowers, further enrich Kenya’s trade portfolio, showcasing the nation’s agricultural strengths. Conversely, the UAE supplies essential goods to Kenya, including petroleum, machinery, and chemicals, reinforcing the complementary nature of their economies.
However, what sets the CEPA apart, is its ambition to go beyond traditional trade agreements. It aims to eliminate trade barriers, streamline customs procedures, and foster industrialization and regional value chains, creating a more integrated economic landscape.
The agreement opens doors for Kenyan service providers in various sectors, including education, transport, and technology, to access the expansive UAE market. This partnership signifies a commitment to innovation and sustainable practices.
By prioritizing clean technologies and environmentally responsible approaches, both nations are setting the stage for green economic growth that prioritizes the welfare of their citizens.
Moreover, the CEPA is expected to attract significant foreign direct investment (FDI) into critical sectors such as energy, health, and logistics in Kenya, seamlessly aligning with the country’s Bottom-Up Economic Transformation Agenda (BETA).
This agenda aims to unlock new markets and foster opportunities for local businesses, reducing reliance on borrowing while promoting public-private partnerships. In doing so, this economic partnership promises to enhance Kenya’s investment climate, creating jobs and revitalizing diverse sectors of the economy.
The signing of the Kenya-UAE CEPA also bolsters Kenya’s broader strategy to engage with international trade frameworks, including agreements with the EU, UK, and participation in the African Continental Free Trade Area (AfCFTA). This strategic positioning not only enhances Kenya’s status in the global market but also offers duty-free access to a vast consumer base representing nearly half of the world’s GDP.
CEPA is poised to drive economic growth, foster innovation, and create countless opportunities for businesses and individuals alike. Not only does it signal a bold step forward, paving the way for future collaboration that delivers lasting benefits for both nations, it represents an economic agreement and a partnership grounded in mutual respect and shared aspirations.
This agreement is set to create a host of opportunities, promising a dynamic and innovative collaboration that goes beyond simple trade.
