Costly, unpredictable logistics stall Kenya’s export competitiveness

Logistics bottlenecks threaten Kenya’s AfCFTA gains, manufacturers warn

Kenya’s manufacturers are raising the alarm over rising and unpredictable logistics costs, warning that persistent inefficiencies could erode the country’s competitiveness under the African Continental Free Trade Area (AfCFTA).

This emerged during the launch of a new Logistics Study Report by the Kenya Association of Manufacturers (KAM), which paints a stark picture of the cost of moving goods across Africa—often outweighing the benefits of reduced tariffs under the continental trade pact.

According to the report, transporting a 20-foot container along the Nairobi–Lusaka corridor costs between $3,500 and $7,000, with transit times ranging from 8 to 30 days depending on border delays and operational disruptions. The unpredictability, industry players say, is as damaging as the cost itself.

“While markets are opening, the systems that connect us to those markets are not moving at the same pace,” said Tobias Alando, Chief Executive of KAM. “In many cases, logistics costs now outweigh the benefits of tariff reductions, meaning products are not competitive by the time they arrive.”

The findings highlight a growing paradox: even as AfCFTA opens access to 54 countries, Kenyan manufacturers—especially small and medium-sized enterprises (SMEs)—remain locked out by structural inefficiencies. These include border delays, infrastructure gaps, high freight costs and limited cargo consolidation mechanisms.

For SMEs, the burden is particularly acute. Harriet Ngo’k, founder of Harriet Botanicals and Chair of the KAM SME Hub, shared the realities of exporting across markets.

“For products worth Sh30,000, it costs me Sh14,000 to ship to Rwanda, Sh17,000 to Nigeria, and Sh30,000 to the U.S. These costs are high and unpredictable, and they directly affect where and how we can trade,” she said.

Ngo’k added that delays along key corridors are especially costly for businesses dealing in perishable goods. “It can take seven to ten days just to reach nearby markets like Uganda. By the time goods arrive, we have already lost part of their shelf life, with the added risk of rejection.”

Government officials acknowledge the challenge. Juma Mukhwana, Principal Secretary in the State Department for Trade, said Kenya must address structural barriers to fully leverage AfCFTA.

“We must move from exporting raw materials and importing finished goods to building value locally and regionally,” he said. “This calls for investments in infrastructure, support for SMEs, and stronger regional integration.”

Mukhwana pointed to ongoing investments such as the Standard Gauge Railway and County Aggregation and Industrial Parks (CAIPs) as part of efforts to improve efficiency and market access.

Development partners also underscored the urgency of reforms. Lilian Mwai, Country Director at TradeMark Africa, said the study provides a roadmap for targeted interventions.

“From high clearance costs to infrastructure delays, these are issues that must be addressed to unlock intra-African trade and enable businesses to compete effectively,” she said.

The report recommends improved coordination across border agencies, investment in reliable infrastructure, and the development of cargo aggregation systems to help SMEs lower costs and scale exports.

The study was supported by TradeMark Africa with funding from the Foreign, Commonwealth and Development Office (FCDO), as part of broader efforts to strengthen trade facilitation and export competitiveness.

As Kenya positions itself to capitalise on Africa’s single market, the message from industry is clear: without fixing logistics, the promise of AfCFTA may remain out of reach.