Jobaaj Stories
Kenya is taking a significant step to secure its economic future by partnering with the United Arab Emirates (UAE) to complete its stalled Standard Gauge Railway (SGR) project. The railway, originally funded by China under its ambitious Belt and Road Initiative, was left incomplete in 2019 when financing from Beijing was halted. Now, Kenya and the UAE are exploring a partnership to revive this vital infrastructure project, which aims to boost regional trade and integration.
A New Direction for Funding
The Standard Gauge Railway, which connects the port city of Mombasa to various parts of Kenya, was envisioned as a transformative project to facilitate trade with neighboring landlocked countries such as Uganda and South Sudan. However, the construction stopped in the Rift Valley, 468 kilometers short of the Ugandan border, due to China’s withdrawal of financial support.
President William Ruto, who assumed office in September 2022, has sought to diversify Kenya’s international partnerships. On Tuesday, Ruto announced on social media platform X (formerly Twitter) that discussions with the UAE are underway to finance the completion of the railway. Both nations will conduct a feasibility study to assess the project’s potential to enhance regional trade and connectivity.
Strengthening Kenya-UAE Ties
Kenya’s partnership with the UAE extends beyond the railway project. The two nations recently signed a comprehensive economic partnership agreement (CEPA), which aims to remove trade barriers, streamline customs processes, and encourage mutual investments. Trade between Kenya and the UAE has grown significantly over the past decade, reaching a value of 445 billion shillings in 2023. The UAE is now Kenya’s second-largest source of imports and its sixth-largest export market.
President Ruto highlighted Kenya’s strategic role as a gateway to East Africa, a sentiment echoed by the UAE’s Minister of Trade, Thani Al Zeyoudi. The agreement is expected to unlock new opportunities for Kenyan agricultural exports while ensuring a steady supply of petroleum products, machinery, and chemicals from the UAE.
Budgetary Support and Broader Implications
In addition to railway financing, Kenya is finalizing a $1.5 billion commercial loan from the UAE to support its national budget. This loan reflects the deepening economic ties between the two nations and underscores the UAE’s confidence in Kenya as a regional economic hub.
The renewed focus on completing the railway project has broader implications for East Africa. A fully operational SGR could enhance trade efficiency, lower transportation costs, and promote economic integration across the region. For Kenya, it represents a critical step toward realizing its Vision 2030 development agenda.
Conclusion
Kenya’s decision to seek UAE support for its railway project signals a strategic pivot toward diversifying international partnerships. By collaborating with a key global player like the UAE, Kenya aims to solidify its position as a regional trade hub and unlock new avenues for economic growth. This partnership holds promise not just for Kenya but for the entire East African region, paving the way for enhanced connectivity and prosperity.
