PUBLISHED ON September 21st, 2023

Cool logistics corridor will make Kenya a trading hub

Kenya is one of the fastest growing economies in Africa and the largest economy in East Africa. A hub into Africa and a hub to the world. The port of Mombasa is the most visible hinge, a well-functioning port that has throughout history been able to attract foreign investments with increased trade activities as a result.

Kenyatta International Airport, the new deep sea port in Lamu, border facilities in Namanga, Busia and Moyale, as well as Lake Victoria trade from Kisumu are testimony that Kenya holds a regional hub function.

The Netherlands remains among Kenya’s top trade and investment partners. Since independence, the Netherlands has been among the top five global destination of Kenyan goods and the largest in Europe. Kenyan exports to Netherlands have more than doubled over the past 10 years to stand at Sh69.7 billion (561 million euros) in 2022.

During the first six months of this year, Kenyan exports to the Netherlands are at nearly Sh40 billion, a sign of continuing growth. At the same time, the Netherlands is among the top five sources of Foreign Direct Investment (FDI) to Kenya. So, we can easily say that Kenya and the Netherlands enjoy strong trade relations with agriculture, and specifically horticulture, as a key driver.

Behind this success story is a steadfast Dutch partnership to address various business climate challenges in Kenya. TradeMark Africa, International Finance Corporation (IFC), United Nations Conference on Trade and Development (Unctad) and International Development Law Organization (IDLO) have been important partners in this endeavour, some of whom we work with in close collaboration with the European Union and other major trading partners of Kenya.

In the recently launched Multi Annual Country strategy 2023-2026, the Embassy of the Kingdom of the Netherlands to Kenya envisions to further strengthen the economic cooperation between Kenya and the Netherlands, fostering sustainable and inclusive economic growth.

 The further development of sea, rail and road infrastructure is critical to Kenya’s position on the African continent in global value chains, as logistics are a key driver for trade. This position is crucial for Kenya as the African Continental Free Trade Area (AFCFTA) is gaining traction.

At the same time, the Netherlands is a critical gateway into Europe. It harbours the largest port in Europe, the Port of Rotterdam, and is worldwide the largest port for reefer containers.

The logistics sector in the Netherlands is diverse and driven by innovation. The Netherlands has become an expert in multi-modal transport systems. The logistical capacity in the Netherlands is largely driven by the private sector, facilitated by public investments. And we think this could also be the way forward in Kenya.

Sea freight is still an underserved logistical chain in Kenya, but has huge potential. More specifically, the embassy is championing the development of a cool logistics corridor connecting Kenya and the Netherlands through sea freight — not in the last place to meet international targets on carbon reduction. After all, carbon emissions are up to 80 per cent lower for sea freight compared to airfreight.

Therefore, this week the Embassy of the Kingdom of the Netherlands to Kenya has the honour to welcome 17 Dutch companies that will explore various partnership and investment opportunities in the logistics sector.

The companies will get a deep dive into Kenyan logistics and blue economy systems, by conducting visits to flagship Kenyan logistics hubs such as Naivasha inland container depot, Mombasa Port and Dongo Kundu special economic zone.

Moreover, they will engage with policymakers, companies, financial partners and non-governmental organisations to identify market opportunities. The goal of this mission is to stimulate private sector investments in the full logistics chain: from farm to market.

I hope this week will lead to inclusive sustainable solutions, which Dutch companies are known for. That would be another step forward in the ever strengthening economic cooperation between Kenya and the Netherlands.

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Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.