More than a billion people, 54 countries, a continent bigger than the USA, Europe, China and India combined. Yet Africa is barely present on the map of world trade, hence the country seems relatively unimportant for the transportation and logistics industry. The situation however is changing fast. African logistics stands for much more – namely the chance to build tomorrow’s markets. And while tomorrow is still uncertain, logistics strategists can’t afford to ignore the African market of the future.

The PwC’s report “Africa gearing up” sheds light on the demographic and economic situation on selected African economies, among which Kenya has one of the leading roles.

Kenya is emerging as a strong choice for retail companies looking to set up in eastern Africa. With its large population, growing middle class and central location, the country is well positioned both as a point of entry and as a gateway to other markets. And while ethnically-based political rivalries and security concerns exist, Kenya is still one of the easier African countries in which to do business.

That is why the Kenyan Government has big plans. Kenya’s ‘Vision 2030’ provides a blueprint for future development and there have already been some initial successes with institutional and business reforms to improve the business environment.

Below follow some risk and positive outlook points as presents in the report that show an assessed investment potential for Kenya.

• Risks
• Power infrastructure: While Kenya performs above average compared to its African peers, it ranks poorly on businesses’ ability to get electricity in a global comparison. Inadequate electrification rates are a major constraint to the wider business environment.
• Labor productivity and Kenya’s human development indicators are currently fairly low.
• Low logistics efficiency is a key concern and business risk for companies importing to or exporting from Kenya.
• Although Kenya’s most important port, Mombasa, is the second-largest port in sub-Saharan Africa after Durban in terms of tonnage and containers handled, it is also facing serious capacity constraints and congestion.
• Kenya has enough trunk roads, but lacks decent roads connecting rural and urban areas, so it is hard for farmers to deliver food directly to city markets.

• Positive Outlook
• Kenya is one of the most innovative countries on the continent, with only South Africa rated ahead of it in the World Economic Forum’s Africa Competitiveness Report 2013.
• Although Kenya currently has large trade and budget deficits, Kenya has also signed a variety of economic pacts with other countries, notably China.
• Kenya is currently reliant on imports of oil, but that looks set to change following the discovery of commercial oil deposits in March 2012.
• Kenya’s financial sector is rated as the most developed in East and Central Africa. This facilitates greater ease in accessing capital markets for businesses looking to support growth through debt and capital market funding.
• Transportation: Kenya’s development plans include significant improvements in transportation (roads, railways, seaports, airports, water and sanitation) as the country attempts to increase its competitiveness in the global market.