In a landmark development, the United Arab Emirates (UAE) and Kenya have signed a Comprehensive Economic Partnership Agreement (CEPA) aimed at enhancing trade and investment flows between the two nations. This agreement marks the UAE’s first-ever bilateral trade pact with an African country, underscoring the UAE’s commitment to diversifying its economy beyond oil and into broader economic sectors.
The CEPA is expected to play a pivotal role in strengthening economic ties between the UAE and Kenya, with non-oil trade between the two countries already showing impressive growth. In the first three quarters of 2024, non-oil trade surged to $3.1 billion, representing a 29.1% increase compared to the same period in 2023. This expansion reflects the increasingly robust economic relationship fostered by the new agreement.
Kenya, one of Africa’s most promising and rapidly growing economies, is forecast to see sustained economic growth. After achieving a real GDP growth rate of 5.6% in 2023, Kenya’s economy is expected to grow at an average rate of 5.2% annually between 2024 and 2026. This presents a wealth of opportunities for both Kenyan and UAE businesses, particularly in key sectors such as agriculture, services, infrastructure, and renewable energy.
Services are a major contributor to Kenya’s economy, accounting for 53.6% of its GDP, followed by agriculture at 25%. These sectors present significant opportunities for UAE investors seeking to expand their footprint in East Africa. Moreover, the CEPA will open new avenues for investment in high-potential areas including banking, tourism, information and communications technology (ICT), and infrastructure development.
The agreement is also set to eliminate trade barriers across a wide array of goods and services, facilitating smoother trade between the two nations. UAE businesses stand to benefit from Kenya’s strategic location in East Africa, enabling access to a growing regional market.
The UAE’s strategic goal is to double its economy to over $800 billion by the end of the decade, with foreign trade playing a critical role in this ambition. The CEPA with Kenya is a key step in this direction and is part of the UAE’s broader effort to strengthen its economic ties with African nations, following similar agreements with countries such as Mauritius and the Republic of the Congo.
This partnership reinforces the UAE’s position as a trusted partner and investor in Africa, and it is expected to foster long-term economic growth for both countries.
