Kenya is turning to the United Arab Emirates (UAE) for financial backing to complete a key regional railway project after China cut funding to the initiative. The railway, designed to connect Kenya’s bustling port of Mombasa with its landlocked neighbors, has been a critical part of Kenya’s infrastructure ambitions. However, with Beijing’s unexpected withdrawal of financial support, the project’s future appeared uncertain until Nairobi reached out to the UAE.
In a meeting with UAE officials in Abu Dhabi, President William Ruto announced that Kenya is actively exploring a partnership with the Gulf state to extend the Standard Gauge Railway (SGR). The railway was originally planned as part of China’s Belt and Road Initiative but ended prematurely in 2019, leaving it 468 kilometers (290 miles) short of its final destination at the Uganda border.
President Ruto emphasized the importance of completing the railway extension, which would connect Kenya, Uganda, and South Sudan. He remarked, “We are exploring a partnership agreement with the United Arab Emirates to extend the Standard Gauge Railway to connect Kenya, Uganda and South Sudan,” highlighting the project’s potential to foster regional integration and boost trade across East Africa.
With the financial backing of China abruptly withdrawn, Kenya is seeking new avenues for funding. The UAE, known for its economic prowess and strategic investments in infrastructure, has emerged as a key partner. Both nations will conduct a feasibility study on the proposed railway extension to ensure its viability and long-term benefits.
The Kenyan government’s search for alternative funding sources comes after China decided to halt its financial support for the railway project, despite having initially pledged to fund the critical infrastructure development. This shift in strategy by Beijing left Kenya in a tight spot, needing to find new backers to complete what is seen as a transformative project for the region.
Experts argue that the railway’s completion could significantly enhance trade connectivity, making it easier to transport goods between landlocked countries and global markets via Mombasa, Kenya’s primary port. Moreover, it would contribute to East Africa’s broader economic integration, strengthening ties between neighboring countries such as Uganda, South Sudan, and Kenya.
Kenya’s reliance on the UAE is not entirely new. The two nations have been strengthening their economic and trade relations over the years, with the UAE emerging as a major trade partner. In fact, trade between Kenya and the UAE has more than doubled over the last decade, according to President Ruto’s office. The UAE is now Kenya’s sixth-largest export market and its second-largest source of imports.
In 2023 alone, the value of trade between the two countries reached a significant 445 billion shillings (about $3.44 billion), driven largely by Kenyan agricultural exports and UAE imports of petroleum products, machinery, and chemicals. Kenya’s exports primarily consist of agricultural goods, while it imports oil and industrial products from the UAE.
The UAE’s commitment to supporting Kenya extends beyond trade. In 2023, Kenya signed a comprehensive economic partnership agreement with the UAE aimed at eliminating trade barriers, simplifying customs procedures, and promoting investments. This partnership is expected to streamline the flow of goods and services, making Kenya a key gateway for East Africa’s commerce.
Thani Al Zeyoudi, the UAE’s Minister of Trade, has echoed the importance of this collaboration, stating, “Kenya is going to be a gateway for sure for East Africa.” The UAE sees Kenya as an ideal partner for expanding its presence in the region, leveraging Kenya’s strategic location to access key markets in East and Central Africa.
Alongside this economic partnership, the UAE has also extended its influence in Kenya’s energy sector. The UAE’s state-owned companies, such as the Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company, were selected by Ruto’s administration in 2023 to supply Kenya with oil on extended credit terms, marking a departure from Kenya’s previous open tender system.
This shift is part of a broader effort by Kenya to strengthen its economic ties with the UAE and secure more favorable financing arrangements for its development projects. With the government under President Ruto’s leadership continuing to pursue closer relations with the UAE, the partnership looks set to play a critical role in the future of Kenya’s infrastructure development, including the much-needed railway extension.
Despite the optimistic outlook, questions remain about the long-term sustainability of the railway project and the economic feasibility of the planned extension. Both Kenya and the UAE are set to embark on a detailed feasibility study to assess the technical, financial, and environmental aspects of the project. This study will determine the best course of action for completing the railway and ensuring its success.
Ruto’s government, which took office in September 2022, is facing significant economic challenges, including a growing debt burden and pressure to meet infrastructure development goals. The completion of the railway is seen as a key part of his administration’s strategy to accelerate economic growth and improve regional connectivity.
Kenya is not the only country in East Africa that stands to benefit from improved railway infrastructure. Neighboring Uganda and South Sudan are both keen to see the project completed, as it would open up new trade routes and facilitate the movement of goods across borders. This has led to growing regional support for the project, with both Uganda and South Sudan expressing their interest in participating in the feasibility studies.
