How Kenya and the UAE are forging new trade horizons?
Kenya and the UAE sign the Comprehensive Economic Partnership Agreement, strengthening trade ties as bilateral exchanges hit Ksh. 445 billion in 2023, making the UAE Kenya’s sixth largest export market
In a world where trade alliances can shift the fortunes of nations, Kenya and the United Arab Emirates (UAE) have joined hands to script a new chapter of collaboration with the signing of their first-ever Comprehensive Economic Partnership Agreement (CEPA). This partnership isn’t just a trade deal—it’s a story of mutual aspiration, growth, and a shared vision for the future.
The UAE, a Middle Eastern powerhouse with glittering skyscrapers and vast fossil fuel reserves, now seeking to chart a sustainable and innovation-led future by diversifying its economy. On the other side, Kenya, blessed with rich agricultural lands, vibrant culture, and strategic location, yet striving for economic growth and infrastructure development. What unfolds when these two worlds come together? Opportunity.
On January 14, 2025, in a moment that symbolised the convergence of two contrasting yet complementary economies, Kenyan President William Ruto and UAE President Sheikh Mohamed bin Zayed Al Nahyan signed the CEPA. This agreement marks the UAE’s first trade pact with a mainland African country, cementing Kenya’s status as a critical gateway to East and Southern Africa while reaffirming the UAE’s role as a global trade and logistics hub.
Shortly after the signing, President Ruto took to X to express his optimism, posting:
“The signing of the historic Kenya-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) will deepen trade ties between the two nations by simplifying trade procedures, promoting industrialisation and stimulating investment.
It is expected to more than triple Kenya’s exports of meat products, fruits, vegetables, cut flowers, tea, and coffee once implemented.”
The signing of the historic Kenya-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) will deepen trade ties between the two nations by simplifying trade procedures, promoting industrialisation and stimulating investment.
— William Samoei Ruto, PhD (@WilliamsRuto) January 14, 2025
It is expected to more than triple… pic.twitter.com/GKpxdwSIAA
Why Kenya? Why now?
The answer lies in the growing trade relationship and the potential for mutual benefits. In 2023, total trade between the two nations reached Ksh. 445 billion, with the UAE emerging as Kenya’s sixth-largest export destination and second-largest source of imports, accounting for 16% of the country’s total imports.
In fact, the CEPA builds on the growing cooperation between the UAE and Kenya, which saw bilateral non-oil trade reach $3.1 billion in the first nine months of 2024 alone, indicating a 29.1% compared to the same month in 2023.
Meanwhile, Kenya’s vibrant agricultural sector provides the UAE with essential exports. In 2023 alone, Kenya shipped Ksh. 9.9 billion worth of meat, Ksh. 5.6 billion worth of flowers and vegetables, and Ksh. 5.2 billion worth of fruits, including avocados, pineapples, and mangoes.
Beyond trade, the UAE is looking ahead. With its economy heavily reliant on fossil fuels, the Gulf nation has embarked on an aggressive diversification strategy, signing CEPA agreements with giants like India, Indonesia, and Turkey, as well as smaller, strategic partners like New Zealand. Kenya, as a gateway to East Africa and the African Continental Free Trade Area (AfCFTA), offers the UAE a strategic foothold in a $3.4 trillion market.
A perfect match: Complementary strengths
For Kenya, the CEPA couldn’t have come at a better time. Facing economic challenges and infrastructure funding gaps, Kenya is actively seeking partnerships to unlock its potential. When China withdrew support for the completion of Kenya’s Standard Gauge Railway project in 2019, the country turned to alternative partners. Now, under the CEPA framework, the UAE is poised to play a role in completing the railway, a key infrastructure project connecting Kenya to Uganda and South Sudan.
In fact, President Ruto recently announced plans to partner with the UAE to extend the railway, calling it a project that will “foster regional integration and promote trade.” Feasibility studies are underway, and this collaboration could become a cornerstone of Kenya’s Bottom-Up Economic Transformation Agenda (BETA).
In fact, this agreement came soon after the President had to cancel Adani’s 30-year proposal for the development of Jomo Kenyatta International Airport (JKIA), which aimed to improve airport infrastructure and construct a new runway.
The promises of CEPA: Opportunities for Kenya
The Kenya-UAE CEPA presents significant opportunities for Kenya’s economic growth, perfectly complementing the country’s Bottom-Up Economic Transformation Agenda (BETA). By providing new market access, particularly in the UAE, the CEPA unlocks key opportunities for Kenyan exports, including agricultural products, manufactured goods, and services. This agreement allows Kenyan businesses to access the UAE’s dynamic market duty-free and quota-free, fostering increased trade and promoting Kenya as a leading global trade partner.
Additionally, the CEPA facilitates the establishment of industries in Kenya by attracting much-needed foreign direct investment (FDI) from the UAE, especially in sectors such as energy, agriculture, healthcare, logistics, ICT, and infrastructure. Through special economic zones and public-private partnerships, the CEPA supports Kenya’s strategy to modernise infrastructure, industrialise, and create employment opportunities while reducing reliance on external borrowing.
A critical feature of the CEPA is its emphasis on sustainability, with both Kenya and the UAE committing to the adoption of clean technologies and environmentally friendly practices. This strengthens Kenya’s focus on green growth, encouraging investments in renewable energy, water conservation, and sustainable agriculture—areas where both countries can share expertise and collaborate for long-term environmental sustainability.
Beyond the UAE-Kenya CEPA, Kenya also benefits from several other trade agreements that further bolster its position as a competitive player in global trade. The African Continental Free Trade Area (AfCFTA) allows Kenya to trade freely within the $3.4 trillion African market, providing substantial opportunities for regional trade and integration. Additionally, the Kenya-EU Economic Partnership Agreement, signed in December 2023, grants Kenya duty-free and quota-free access to the $16 trillion European market, expanding trade opportunities for Kenyan businesses.
Similarly, the Kenya-UK Economic Partnership Agreement, which offers Kenya duty-free access to the $4.34 trillion UK market, complements the growing trade relationship post-Brexit. Furthermore, the African Growth and Opportunity Act (AGOA) ensures Kenyan exports benefit from tariff-free access to the $26 trillion U.S. market. Collectively, these agreements, alongside the CEPA, strengthen Kenya’s global trade position, driving economic growth, attracting investments, and fostering long-term prosperity.
The Bigger picture: UAE’s global strategy
The UAE’s signing of CEPAs with Malaysia, New Zealand, and Kenya on the same day highlights its expansive vision for global trade. Each partnership has unique objectives:
- Malaysia: The UAE aims to invest in data centres, artificial intelligence, logistics, and ports, with a focus on food security and pharmaceuticals.
- New Zealand: The CEPA will eliminate duties on 98.5% of New Zealand’s exports, rising to 99% within three years.
- Kenya: The UAE sees Kenya as a gateway to East Africa and a bridge to the broader African market, where the AfCFTA presents enormous potential.
Moreover, the nation’s broader strategy includes initiating talks with the European Union and expanding partnerships with emerging and established markets alike.
A win-win partnership
For Kenya, this is more than a trade agreement—it’s a chance to redefine its role on the global stage. By exporting premium goods like flowers, fruits, and vegetables, Kenya is not just boosting its economy but also creating livelihoods for millions of farmers and workers.
As Sanjeev Gadhia, CEO of Astral Aviation, put it: The CEPA is a significant step toward strengthening economic ties. “By boosting the export of Kenyan perishable goods like flowers, fruits, and vegetables to the UAE, it will likely open up more opportunities for Kenyan farmers and exporters. Additionally, it could enhance the UAE's access to fresh, high-quality products while fostering mutual economic growth. It’s a win-win for both nations!”
Moreover, the founder of the Kenyan all-cargo airline also mentioned that they currently operate a schedule freighter for Kenyan Perishables to the UAE, and are looking forward to increasing capacity to meet the extra demand.