Trade

Kenya-UAE Cepa may increase food exports and investment

January 15, 2025, 7:50 PM

Kenya's President William Ruto says the Kenya-UAE Cepa will 'more than triple' some food exports and provide investment opportunities

UAE-Kenya Cepa finalised
Kenyan food exports to UAE to grow
Major rail project being explored

The UAE and Kenya have signed a comprehensive economic partnership agreement (Cepa) that is predicted to lead to a threefold increase in food exports from the East African nation.

The trade deal, which was agreed in February last year, is expected to accelerate trade and investment in agriculture, infrastructure, healthcare, travel and tourism, financial services and renewable energy.

Non-oil trade between the countries reached $3.1 billion in 2023, up 26 percent year on year.

President Sheikh Mohamad said the Kenya-UAE Cepa will create new opportunities for businesses and investors, with greater market access in the Middle East and Africa.

Kenya’s President William Ruto said the agreement will simplify trade procedures and increase investment.

“It is expected to more than triple Kenya’s exports of meat products, fruits, vegetables, cut flowers, tea and coffee once implemented,” Ruto said in a post on social media platform X.

“The Cepa will also provide the UAE with investment opportunities in the energy, water, agriculture, health, airports, logistics, and ICT sectors.”

Ruto said discussions also took place about securing financing to complete a regional railway in the country.

“We are exploring a partnership agreement with the United Arab Emirates to extend the Standard Gauge Railway (SGR) to connect Kenya, Uganda and South Sudan,” Ruto said.

“As part of the plan, we have agreed to conduct a feasibility study over the extension of the SGR due to its capacity to foster regional integration and promote trade.”

A key infrastructural project for Kenya, the SGR is 468km short of connecting the port of Mombasa with the Uganda border.

In October, Uganda signed a rail-building deal with Turkey’s Yapi Merkezi to connect the capital Kampala to Malaba at the border with Kenya, at a cost of $3 billion. It is expected to take four years to complete.

Kenya has in recent months been in talks with the UAE to finalise a commercial loan worth $1.5 billion that would help to reduce its debt.

UAE-Kenya ties

The UAE announced plans in April 2024 to build data centre projects with a total capacity of up to 1,000 megawatts in Kenya. The two nations will also explore investments in Kenya’s digital infrastructure and artificial intelligence services, including the potential of large language models.

Abu Dhabi sovereign wealth fund ADQ signed a $500 million finance framework agreement in April with Kenya to develop its mining and technology sectors.

The UAE moved ahead of the US, Pakistan, Netherlands, Tanzania and the UK to become Kenya’s second-largest export market, thanks largely to increased re-exports of kerosene-type jet fuel, attributed to increased fuelling of UAE-owned aircraft in the country.

Kenya extended oil import agreements with one Saudi and two UAE oil companies in December. The deals, which offer a 180-day credit period, help to ease pressure on Kenya’s currency.