Why is Kenya the Best Choice for Trade in Africa?
Kenya continues to be a pivotal destination for trade in Africa, bolstered by recent economic data and strategic advancements in 2023. Here’s an updated overview with the latest figures and insights:
1. Strategic Location
Kenya’s strategic position on the East African coast remains a significant advantage. In 2023, the Port of Mombasa handled approximately 36 million tons of cargo, continuing its role as a vital hub for trade within Kenya and for neighboring landlocked countries.
2. Developed Infrastructure
– Standard Gauge Railway (SGR): The SGR has further enhanced transport efficiency, moving over 5.5 million tons of cargo in 2023, reflecting a 10% year-over-year increase.
– Road Network: Continued investments have expanded Kenya’s road network to over 162,000 kilometers, improving logistics and connectivity.
– Airports: Jomo Kenyatta International Airport (JKIA) handled around 8.5 million passengers and increased its cargo capacity, maintaining its status as the busiest airport in East Africa.
3. Economic Hub
Nairobi continues to be a major economic hub, contributing about 23% to the national GDP. The city remains attractive to multinational corporations and international organizations, solidifying its role as a key financial and commercial center.
4. Diversified Economy
– Agriculture: Agriculture still plays a crucial role, contributing around 32% to Kenya’s GDP. Exports of tea ($1.35 billion annually) and flowers ($1 billion annually) have seen growth.
– Manufacturing: The manufacturing sector’s contribution rose to 8.2% of GDP, driven by improvements in the production of textiles, pharmaceuticals, and food products.
– Services: The services sector continues to thrive, contributing over 52% to Kenya’s GDP. The tech industry in Nairobi, part of the “Silicon Savannah,” saw continued growth with tech investments reaching $2.3 billion in 2023.
5. Business-Friendly Environment
Kenya has maintained improvements in its business environment. The World Bank’s Ease of Doing Business Index previously ranked Kenya 56th globally, and these reforms have been sustained and built upon in 2023. Improvements in starting a business, obtaining construction permits, and getting electricity have created a more conducive environment for trade.
6. Trade Agreements
Kenya’s membership in key trade blocs continues to be advantageous:
– East African Community (EAC): The EAC market has expanded to over 183 million people with a combined GDP of around $205 billion.
– African Continental Free Trade Area (AfCFTA): The AfCFTA continues to offer a market of 1.3 billion people, enhancing trade and investment opportunities across Africa.
7. Important Ports
– Port of Mombasa: In 2023, the Port of Mombasa handled around 36 million tons of cargo, benefiting from ongoing upgrades aimed at increasing capacity and efficiency.
– Port of Lamu: The Port of Lamu has seen significant operational growth in 2023, solidifying its role as a major transshipment hub and enhancing trade routes to and from Africa.
Conclusion
