Kenya is on the brink of enhancing its trade influence with the United Arab Emirates (UAE) market, following the recent implementation of a similar trade agreement with the European Union (EU).
In the first quarter of 2024, revenue from exports to Asia surged to KES 42.7 billion, marking a 76.4% increase from the first quarter of 2023. This growth was largely driven by increased exports to Saudi Arabia and the UAE, which saw more than a threefold and twofold increase, respectively.
The Cabinet has reviewed and approved the UAE agreement, which will grant Kenyan products preferential market access. There was a notable rise in domestic exports of tea to Saudi Arabia and goat meat to the UAE, along with re-exports of kerosene-type jet fuel to these two countries. Conversely, exports to Iran dropped by 45.5% due to decreased tea exports.
On the other hand, import expenditure from the Middle East fell by 13.9% to KES126.1 billion in the first quarter of 2024, compared to the same period in 2023. This decline was mainly due to reduced imports of chemical fertilizers from Saudi Arabia and gas oil and motor spirit (gasoline) premium from the UAE.
“In alignment with our commitment to expanding access to international markets, we have considered and approved the Kenya-United Arab Emirates Comprehensive Economic Partnership Agreement. Once ratified by Parliament, this treaty will provide Kenyan products, including tea, meat, fruits, vegetables, and cut flowers, with preferential market access to the UAE,” the Cabinet announced in a statement.
This announcement comes shortly after the Economic Partnership Agreement, which allows Kenyan exports to enter the 27-member European Union market duty-free, took effect. This agreement will also gradually open the Kenyan market to EU products over a 25-year period.
The agreement, which addresses trade and climate change issues, was concluded in June 2023 and signed on December 18, 2023. It aims to implement the provisions of the EU-East African Community (EAC) EPA and remains open to other EAC countries.
The EU is one of Kenya’s top export destinations and its second-largest trading partner, with total trade between the EU and Kenya exceeding €35 billion in 2023, a 16% increase compared to 2018.
