Kenya-UAE Trade Balance Distorted by Increased Re-Exports of Jet Fuel

Strategic Insights -

The increased frequency of direct flights between Nairobi and the UAE has significantly boosted re-exports of jet fuel, with Kenya's total exports to the Emirati country surging 787.18 percent last year, according to the Kenya National Bureau of Statistics (KNBS). This anomaly in trade data has raised concerns that the re-exports may be inflating the total value of trade and distorting the trade balance between the two countries. Aviation oil, largely jet fuel, accounts for over half of Kenya's total exports to the UAE, primarily bought by international airlines such as Emirates, flyDubai, and Etihad.

Key Takeaways:

  • The value of re-exports of petroleum oil to the UAE skyrocketed 787.18 percent last year to Sh56.10 billion from Sh6.32 billion in 2023, according to KNBS data.
  • Jet fuel re-exports accounted for 55.36 percent of Kenya's total exports to the UAE, catapulting the UAE to the second-largest destination market for Kenyan goods behind neighboring Uganda.
  • The UAE has leapfrogged top buyers of Kenyan goods such as Pakistan (tea), the Netherlands (tea), and the US (garment and apparel) when measured by total value of exports.
  • Experts warn that increased re-exports in trade data may lead to inflating the total value of trade and distorting the trade balance between the two countries.
  • The re-routing of products through third countries often leads to a mismatch in the recorded country of origin, according to the World Bank Group.
  • Kenyan traders largely source jet fuel from the Middle East, especially Oman and the UAE, and re-export it when international airlines fuel at the JKIA hub.
  • The increase in direct flights to the UAE has led to increased re-exports of jet fuel, with flyDubai in particular increasing its flights to Mombasa to four times a week.

Statistics:

  • 787.18 percent increase in the value of re-exports of petroleum oil to the UAE last year, from Sh6.32 billion in 2023 to Sh56.10 billion.
  • 55.36 percent of Kenya's total exports to the UAE accounted for by jet fuel re-exports.
  • Sh56.10 billion value of re-exports of petroleum oil to the UAE last year.
  • 6.18 percent year-on-year fall in the value of imports from the UAE.
  • Sh438.59 billion total value of imports from the UAE last year.
  • Sh101.34 billion total value of goods sold to the UAE last year, an 81.20 percent increase from the previous year.
  • Sh235.91 billion trade deficit between Kenya and the UAE last year, a drop of Sh119.69 billion from the previous year.

Sources:

  • Kenya National Bureau of Statistics (KNBS)
  • Energy and Petroleum Regulatory Authority (Epra)
  • Kenya Revenue Authority (KRA)
  • World Bank Group
  • Business Daily
  • The East African
  • Trade Cabinet Secretary Lee Kinyanjui
  • President William Ruto