UAE and India beat China to top trading position with Kenya

The United Arab Emirates (UAE) has reclaimed its position as the largest exporter of goods to Kenya, relegating China to third spot.

The value of UAE exports to Kenya rose to Sh177.8 billion or 23.3 per cent of Kenya’s total imports in the first 11 months to November compared to China’s Sh132.9 billion or 17.4 per cent of imports, according to the Kenya National Bureau of Statistics (KNBS).

The increase was helped by petroleum exports.

China was Kenya’s largest source of imports in 2010 after Beijing deepened its presence in East Africa with mega infrastructure development projects.

But increased consumption of expensive petroleum products and rising interest of Indian companies in the Kenyan economy have combined to push China to the third spot in what could intensify the rivalry between the two Asian giants.

Though the rivalry between India and China has played out as a battle of the Asian giants, the biggest losers have been the traditional Western trading partners such as Britain whose share of the market has been on a steady decline.

UAE share of the export business has increased to 23.3 per cent last year from 19.5 per cent while China’s has dropped to 17.4 per cent from 19.8 per cent with India’s stake increasing to 18 per cent from 16.4 per cent.

“We will witness cyclic trading patterns between China and Kenya because unlike India, it is trying to establish a stable trading base,” said Gerishon Ikiara, an economics lecturer at the University of Nairobi.

He said India was reaping from its large community in Kenya that has been a steady market for its produce that has been backed by its high value exports like pharmaceuticals, industrial machinery and vehicles.

China’s exports to Kenya include heavy machinery, electronics, vehicles, textiles and a range of household goods.

The two Asian tigers have deepened their presence in Kenya with intense economic diplomacy since President Kibaki came to power in 2003.

The rivalry has benefited Kenya in terms of foreign direct investments, a wider variety of consumer goods and as new sources of technical and financial assistance.

For UAE, it maintained the pole position mainly because of the large quantities of petroleum it supplies to East Africa and also got a lift from the high fuel prices—which rose by an average of 30 per cent last year compared to 2010.

"More than 90 per cent of crude oil imported by Kenya comes from the Abu Dhabi National Oil Company (ADNOC), a company in the UAE,” said Kaburu Mwirichia, the director general of Energy Regulatory Commission (ERC).

Kenya’s consumption of fuel products rose to 3.5 million tonnes last year compared to 3.1 million tonnes in 2010, with international crude oil prices rallying from $76.3 per barrel in January 2010 to $107.9 last month.