This archive report was first published on 14 October 2019.
Published on October 14, 2019, Kenya has announced plans to set up warehouses in Rwanda, Burundi, and the Democratic Republic of Congo as part of a strategy to maintain its dominance in the regional export market.
The warehouses in Kigali, Bujumbura, and Lumbubashi are expected to facilitate smoother cross-border transportation of goods and drive more exports, countering competition from neighboring countries.
Kenya's ambassador to Burundi, Ken Vitisia, stated, "We intend to take up space at a free trade zone that the government has set up for us at the border with DRC in Gatumba, which we are marketing to Kenya's private sector," in an interview with The EastAfrican in Bujumbura.
Burundi has allocated land for the construction of a Kenyan embassy, which will also be used to build a trade center, providing Kenyan companies with easy access to the Burundi market and, subsequently, the DRC market.
Kenya currently controls six percent of the combined Rwanda and Burundi markets, valued at $8 billion, but faces competition from neighboring Tanzania and Uganda, as well as countries like China, India, and Saudi Arabia.
Tanzania has already surpassed Kenya as the leading exporter to Burundi, with Kenyan brands being 16 percent more expensive than products from competing countries.
Kenya's exports to DRC stood at Ksh15 billion ($130 million) in 2018, down from Ksh18.8 billion ($162.7 million) in 2017, according to data from the Kenya Export Promotion and Branding Agency (Keproba).
The warehouses are expected to provide Kenya with access to markets with a combined population of 25 million and growing at a rate of 2.4 percent and 3.3 percent respectively, as well as the DRC market with a population of 81 million.
The main Kenyan exports to Rwanda and Burundi include iron sheets, steel, oils, perfumes, paints, paper, confectionery, and cigarettes.
The rising cost of manufacturing in Kenya, particularly due to high electricity costs and taxes, has contributed to the decline in exports to the region, resulting in a drop in forex reserves, loss of job opportunities, and reduced tax revenues, according to the Keproba report.
