African Infrastructure Tracker: Kenya

Investment Drives Trade and Industrial Development in Kenya

Feb 03, 2016, 16:21 ET from Reportlinker

NEW YORK, Feb. 3, 2016 /PRNewswire/ -- Significant infrastructure development is evident in Kenya, with a strong government commitment to economic transformation through infrastructure. Multiple sectors will benefit from the development of road and rail infrastructure in Kenya. Kenya is set to become the fastest growing East African country and will become a hub for regional trade. The level of development in the country is evident in all urban areas, and the commitment of the Government of Kenya will secure significant foreign direct investment into the country in the next 5 years.

Kenya is ideally placed in East Africa as the hub for trade and business interests, with sufficient infrastructure development driving intra-regional trade in Africa. Significant efforts are underway to upgrade and develop new infrastructure in Kenya to increase its ability to facilitate trade. Major industry sectors that expect to benefit from the planned infrastructure developments will be oil and gas (O&G), mining, agriculture, and retail.

The country has been plagued with high transport costs for many years because of insufficient, overused, and rundown infrastructure. Significant improvements have already been made to facilitate more efficient trade. Despite efforts to improve infrastructure, however, there are major impediments that still exist in terms of administrative delays and instances of corruption along these routes. Average transit times have been improving, and a concerted effort has been made on the part of the government to eradicate these issues.

The port of Mombasa is currently the only point of entry into Kenya for international trade, and delays at the port have resulted in major undertakings to upgrade port facilities. The Kenya Ports Authority (KPA) is looking for private operators to run/manage its new container terminal. The lack of proper infrastructure alone is not the only factor causing delays at the port. For example, efforts from the government to stifle the trade in contraband have resulted in delays. All exports from the country are
required to be scanned, even after these containers have been inspected and sealed by a customs official before being loaded. The duplicity of this administrative process and the frequent breakdowns of port equipment used to handle cargo or scan the containers lead to further delays. Key projects undertaken at the port to reduce inefficiency include the construction of berths through , the conversion of berths through to container terminals, and the dredging of the canal to allow for larger vessels.

For Kenya to become the leading trade hub for East Africa, new infrastructure will be required. A key transport infrastructure project that is underway is the Lamu-South Sudan-Ethiopia Transport (LAPPSET) corridor. This project will comprise a new port facility at Lamu, a railway line, highway, oil pipeline, and a fibre optic line.
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