United Arab Emirates is now Kenya’s second largest source market after China, latest data shows. UAE displaced India from that position thanks to increasing global oil prices. Tentative data suggests that expenditure on imports, which largely involves petroleum products, from the Middle East more than doubled in the first six months of 2022 due to the sky-rocketing global fuel prices.
Kenyan traders spent a record Sh177.88 billion to purchase goods from UAE, more than double the amount they spent in the similar period last year, according to the Kenya National Bureau of Statistics.
This development effectively places the UAE second in Kenya’s top import markets, above India whose consignments in the country shot up 36.61 percent in the review period to Sh150.25 billion.
On the other hand, China maintained its position as the leading import market with an increase of 9.12 per cent. The increase in expenditure on goods from the UAE came in February, at a time when oil prices were at an all-time high occasioned by the Russia-Ukraine crisis.
Russia’s expansionist attack on Ukraine led to a global increase in oil prices. For example, the global cost of Murban oil — whose refined product is what Kenya uses— was about $118.74 per barrel at the end of June, 63.10 per cent increase from $72.80 a year earlier.
For example, Murban oil last Thursday traded $88.64 per barrel compared with $94.93 for the same quantity a week earlier, largely on reduced demand amid “renewed restrictions in China to curb Covid-19”, according to the Central Bank of Kenya.
The costs of energy and transport have a significant weighting in the basket of goods and services that is used to measure inflation in the country. Inflation, a gauge for the cost of living over a period of one year, in increased at the fastest rate of 8.5 percent in 62 months.
KNBS data shows traders shipped in fuel and lubricants worth Sh305.19 billion, a 91.86 percent climb over Sh159.07 billion in the prior period last year. The bulk of petroleum products in Kenya are sourced from the UAE, making it a large source market.
