Manufacturers sound alarm on logistics hurdles stifling export growth

Kenyan manufacturers are warning that logistics inefficiencies and global trade disruptions are undermining the country's competitiveness as it seeks to expand exports and industrial production.

The concerns come as Kenya targets increasing manufacturing's contribution to gross domestic product (GDP) from 7.3 per cent in 2025 to 20 per cent by 2030.

Manufacturers and logistics executives say demand for faster and more reliable transport systems is growing, particularly in time-sensitive industries such as pharmaceuticals, automotive, electronics and agribusiness.

Kenya Association of Manufacturers (KAM) Chief Executive Tobias Alando said geopolitical tensions and changing global trade dynamics were already placing pressure on manufacturers and disrupting established supply routes.

"Global dynamics continue to affect the manufacturing sector in Kenya. Beyond global developments, structural factors within the logistics ecosystem, such as regulatory requirements and infrastructure capacity, play a role in shaping the competitiveness of locally manufactured goods in regional and international markets," said Alando.

They noted that while Kenya has built a strong reputation in exports such as tea and flowers, expansion into higher-value manufacturing would require more efficient logistics systems to reduce lead times and meet international market demands.

Stakeholders also raised concerns over the affordability and accessibility of air freight services for small and medium-sized enterprises (SMEs) seeking to expand exports within Africa and to overseas markets.

The issues were discussed during an industry forum convened in Nairobi by KAM and Federal Express Corporation (FedEx).

Leon Bruwer, managing director of sales for Sub-Saharan Africa at FedEx, said Kenya remained a strategic market for the company's operations in Africa.

"Kenya is a strategic player in our growth story in Africa. Our continued investment in capacity to and from Nairobi, combined with our global air network, enables businesses to access international markets with greater speed, reliability and predictability," said Bruwer.

Participants said improving customs systems, transport integration and digital logistics solutions would be critical in helping Kenyan manufacturers compete more effectively in global markets.