The United Arab Emirates has leapfrogged four top markets to become Kenya's second largest destination for goods largely on increased re-exports of jet fuel, official data released yesterday shows, underlining Nairobi's growing status as a regional aviation hub.
Kenya's earnings from goods sold to the oil-rich country more than doubled in the nine months ended September 2024 to Sh86.89 billion compared with Sh39.72 billion a year earlier, data collated by the Kenya National Bureau of Statistics shows.
The 118.78 percent jump catapulted the Middle East's second-largest economy to become Kenya's second-largest goods export earner in the review period after Uganda (Sh100.51 billion), climbing four positions from last year.
The UAE beat the United States, which bought goods worth Sh67.52 billion, Pakistan (Sh59.89 billion), the Netherlands (Sh57.05 billion) and Tanzania (Sh49.48 billion), according to KNBS's Balance of Payment Report for the third quarter of 2024.
Kenya's top sales to the Emirates were largely re-exports of kerosene-type jet fuel, goat meat and fermented black tea, according to the KNBS, helping drive up export earnings.
The State-owned statistician said the surge in value of exports from UAE "was primarily driven by increased re-exports of kerosene-type jet fuel".
This points to increased fueling of UAE-owned aeroplanes in Nairobi, according to authorities because Kenya imports aviation oil.
The Energy and Petroleum Regulatory Authority (Epra) has maintained that Kenya does not ship out aviation fuel to overseas countries such as the UAE.
The sector regulator has explained that the Kenya Revenue Authority, the main source for trade data used by the KNBS, officially captures the commodity as a re-export when foreign airlines fuel planes at Nairobi's Jomo Kenyatta International Airport (JKIA).
"KNBS in their report capture it [aviation fuel] as a re-export because when OMCs [oil marketing companies] fuel international airlines such as Emirates, the value of fuel is considered by KRA as a re-export," Daniel Kiptoo, the director-general at Epra, told the Business Daily last October.
"I understand flights to and from the UAE have increased in the last year. For example; Fly Dubai has increased their flights to Mombasa to four times a week, this has translated to increased 're-exports' of Jet fuel to UAE."
UAE's two national carriers — Dubai-based Emirates and Abu Dhabi-based Etihad — operate flights to more than 100 destinations across the world from JKIA.
Re-exports of Jet A-1 fuel have become a major foreign exchange earner for Kenya behind tea and horticulture, underscoring Nairobi's status as an aviation hub in Africa.
Further analysis of the KNBS data reveals the USA and the Netherlands as other major global destinations of jet fuel re-exports from Kenya.
UAE, however, remains the biggest buyer of aviation fuel from Kenya, having spent Sh27.44 billion on the commodity in three months through June 2024, for instance.
The fueling of Emirati planes helped the country become the fastest-growing destination among the six biggest markets which accounted for half (49.22 percent) of Kenya's Sh856.03 billion total exports in the nine months.
The US, which largely buys apparel products from Kenya, posted a 38.10 percent growth to Sh67.52 billion. Uganda's imports from Kenya grew a modest 3.81 percent to Sh100.51 billion, Pakistan's purchases of largely tea rose 5.24 percent to Sh59.89 billion, while exports to Tanzania edged up 0.49 percent to Sh49.48 billion.
Exports to the Netherlands, largely cut flowers, however, contracted 1.53 percent to Sh57.05 billion.
Kenyan traders largely source jet fuel from Middle East countries such as UAE and Oman.
The Emirates —which has successfully ploughed oil wealth into other sectors from tourism to real estate— has been keen on growing non-oil trade and investments with Kenya, while Nairobi is seeking to increase exports of livestock and tea.
Negotiating teams from Nairobi and Abu Dhabi in February 2024 concluded the technical negotiations for the Kenya-UAE Comprehensive Economic Partnership Agreement (Cepa), which seeks to deepen trade and investment ties with a key focus on non-oil goods.
“Through the CEPA, the UAE and Kenya aim to remove trade barriers on a wide range of goods and services, creating new opportunities for importers and exporters in both countries and enabling Kenyan companies to leverage the value of the UAE's geographical and logistical position,” the KNBS wrote in 2024 Economic Survey.
The UAE has been one of the most visited countries by President William Ruto since he took power in September 2022. “I am glad that the United Arab Emirates has shown interest in enhancing its presence in energy and technology in our country and the East African region,” Dr Ruto said in February 2024 when he met UAE Minister for Industry and Advanced Technology Sultan Al Jaber.
The blossoming relationship has seen Nairobi and Abu Dhabi open talks over the UAE guaranteeing a $1.5 billion (about Sh193.5 billion) bond for budgetary support.
The proposed funding is aimed at filling the hole in the budget after the International Monetary Fund (IMF) delayed the release of funds, which was expected in September 2024, after it failed to reach a deal with Kenya on future revenue plans in the aftermath of the withdrawal of the Finance Bill 2024.
UAE also offered Kenya a Sh2 billion gift after floods and landslides hit Kenya and reportedly paid for the private plane that took President William Ruto to the US last May amid criticism of extravagance.
Abu Dhabi royal Tahnoon bin Zayed Al Nahyan, UAE President's brother, has an association with a firm that formed a consortium with Safaricom for the rollout of the controversial Universal Health Coverage programme.
