Successful Trade Mission Port Development: Strengthening Kenya’s international trade connections from gateway to gateway - Kenya

Successful Trade Mission Port Development: Strengthening Kenya’s international trade connections from gateway to gateway

News item | 15-12-2023 | 09:15

Together with RVO, a successful Port Development Trade Mission with 17 Netherlands companies took place in September.

Over the past year, the Netherlands has built a significant profile on this topic. As a top 3 trade destination of Kenyan goods, the Netherlands is a valued partner in strengthening trade ties through logistics but also through e-certification, improving customs procedures and securing livelihoods in the horticulture sector.

Additionally, the Netherlands has been among the top three global destinations of Kenyan goods and the largest in Europe. Kenyan exports to Netherlands have more than doubled over the last 10 years to stand at Ksh. 69.7 Billion (561 million euros) in 2022. During the first 6 months of this year, Kenyan exports to the Netherlands are nearly at KSh. 40 Billion, a sign of continued growth. Horticultural products account for over 70% of Kenya’s domestic exports to the Netherlands. Furthermore, Kenya exports 65% of its cut flowers to the Netherlands.

Besides that, there are opportunities for trade in mango, avocado and pineapple exports. Currently, the primary fresh product shipped by sea from Kenya is avocados (around 3,000 containers per year). This represents an import value in the Netherlands of € 46.2 million and based on projections, this will increase by 25% over the next 4 years. Furthermore, Kenya is moving to restart the mango exports to the EU following a self-imposed ban due to fruit-flies.

At the same time consumers in Europe are getting more conscious about their environmental footprint – and several proposals in the ‘Fit for 55’ package of the EU address the maritime transport climate impact, in addition to the extension of EU ETS.

Logistics essential to strengthen Kenya’s position

Kenya has the potential to become a gateway into East Africa, much like Rotterdam is for Europe. Therefore, the Kenyan government has been actively improving and expanding infrastructure networks, domestically and across East Africa to improve trade flows in the region and internationally.

Even though ocean shipping is the main transport for global trade, this is not the case for Kenya. For example, flowers are usually transported by air – meaning that trade is limited to airfreight capacity. Yet, transporting produce via sea can be very interesting for Kenyan farmers, as it is relatively cheaper than via air.

Mombasa port is one of the most modern ones in the region and is a crucial landing point for goods, with links to the Northern Corridor that runs west across the country to the neighboring countries markets of Uganda, Rwanda, Burundi and the Democratic Republic of Congo.

Despite these advantages, challenges persist, such as little focus on the cooling of products, a suboptimal connection from port to railway, a lack of cooled railway wagons and of efficiency in the port. Addressing these issues through continued development of sea, rail and road infrastructure is therefore critical to the countries’ position on the African continent in global value chains, as logistics is a key driver for trade.

Sustainable pathways for export

The trade mission’s aim has been to amplify what the Netherlands wants to achieve in Kenya through the combi track Sustainable Pathways for Export, which aims to support Kenya in its transition to develop more sustainable forms of export, including shipments of horticultural products by the sea.

An efficient connection to the Netherlands through sea-freight will therefore be necessary to build a robust, multimodal transport system and empower Kenya in its ambition to become a regional hub, much like the Netherlands is.

At the same time, as consumers get more critical about airfreight, it is important to reduce CO2 emissions along the supply chain. Currently, sea freight is approximately 80% more sustainable compared to airfreight.

Therefore, the dot on the horizon is a direct shipping line between Kenya and the Netherlands. To achieve this, investments in additional cool logistics facilities and equipment all along the supply chain from farm to port are necessary, as well as increased trade volumes, more efficient and speedy customs and clear taxes.

The Trade Mission – Port Development

The delegation comprising of 17 companies participated in seminars and panels as well as visits to various strategic sites such as the ICD Naivasha, Dongo Kundu SEZ and the Port of Mombasa, as well as KLM Cargo and Dutch Flower Group.

The mission showed proof of good connections in the sector such as the attendance of CS Transport, CS Blue Economy, PS Trade, the County Governors of Lamu and Mombasa, the Managing Directors of the Kenya Maritime Agency and the Kenya Ports Authority during the trade mission. All of them have also visited the Netherlands in the past year, another sign of the strong links present.

Furthermore, it connected Dutch logistics companies to the Kenyan market and public sector. The delegation left Kenya better informed on the opportunities in the logistics sector and planning for future follow-ups and tenders