Kenyan small and medium-sized enterprises (SMEs) are finding it increasingly difficult to penetrate regional markets despite expanded access under the African Continental Free Trade Area (AfCFTA), with high and erratic logistics costs emerging as a major obstacle.
A new report by the Kenya Association of Manufacturers (KAM) indicates that the cost of moving goods across African borders continues to erode the competitive edge that tariff reductions were meant to create. According to the study, inefficiencies within transport and trade facilitation systems are offsetting the potential gains of the continental trade pact.
The report highlights that structural weaknesses—ranging from prolonged border clearance processes and inadequate infrastructure to elevated freight charges—are disproportionately affecting SMEs. Unlike large exporters, smaller firms often ship low-volume consignments, making them more vulnerable to higher per-unit transport costs and weaker negotiating leverage with logistics providers.
“While AfCFTA has technically unlocked access to a vast market, the reality for many Kenyan manufacturers is that logistical bottlenecks still stand in the way,” the report notes, pointing to fragmented cargo systems and limited consolidation options that further inflate costs.
KAM Chief Executive Officer Tobias Alando emphasized that border management inefficiencies remain a critical pressure point. He observed that inconsistent and poorly coordinated procedures among border agencies continue to introduce delays and uncertainty, particularly along key trade corridors.
Alando added that streamlining operations and enhancing inter-agency coordination at border points could significantly ease the burden on SMEs, improving both turnaround times and cost predictability.
The findings underscore a growing concern that without targeted reforms in logistics and trade infrastructure, many Kenyan SMEs risk being sidelined from the very markets AfCFTA was designed to open.
