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Columnists

Kenya should be a global logistics hub

United Arab Emirate is increasingly becoming the global hub. Its location on Earth does not give it any advantage over Kenya.

Whereas it takes four hours to fly from Nairobi to South Africa, it takes more than seven hours to do the same from UAE.

The centrality of Nairobi to Africa, Middle East, Europe and East Asia makes it the best candidate for not only as a regional logistic hub but it can very easily be Africa’s capital and a global hub and create thousands of jobs for the youth.

Until after the mid-1990s, UAE was virtually unknown to the world. Africans travelled there to purchase duty free cars from Japan. Asia found UAE more accommodating and as a destination for goods traded within Middle East and Africa.

Europeans and Americans came later into this market place after UAE had built significant networks of infrastructure.

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Most of them came in as professional contractors who built the modern buildings in what was a dusty desert and converting Dubai for example into a modern metropolis. It was much later when the fathers of UAE began to market the country as a global hub.

Perhaps the death of Sheikh Rashid al-Maktoum was the turning point that resulted in the ascension of Sheikh Maktoum bin Rashid Al Maktoum to the throne.

According to Wikimedia, the Persian Gulf War of 1990, in which Dubai as part of the UAE provided military logistics to the coalition, unsettled the economy.

However, during the middle of the 1990s this stabilised and many foreign trading communities moved their businesses to Dubai.

Dubai continued to foster political alignment with the Western world and during the 2003 invasion of Iraq, they provided refuelling bases to allied forces in the Jebel Ali free zone as they did during the Persian Gulf War.

Dubai benefited from the global price increases of the 1990s that allowed the emerging city to focus on rapid development of key infrastructure.

The success of the Jebel Ali free zone caused the development of clusters of new free zones, including Dubai Internet City, an internet technology area with ownership and tax related benefits, Dubai Media City a tax-free zone to increase Dubai’s presence in the worldwide media, Dubai Maritime City, Dubai Healthcare City and many other thematic areas of investment.

In the past ten years, Kenya has been talking of Dongo Kundu as a Vision 2030 free zone, but very little has been done. The benefits of developing a free trade zone in Kenya is to help develop parts of the country through foreign investments and attract employers and thus reduce poverty and unemployment, and stimulate the area’s economy.

These zones are often used by multinational corporations to set up factories to produce goods (such as light electronic goods and clothing). It can be the region’s logistics hub and possibly trigger greater economic development due to changing global manufacturing dynamics.

We have never seriously looked at the Jomo Kenyatta International Airport (JKIA) as Africa’s premier hub yet its traffic has gone up due to the opening of the Far East trading bloc with Africa.

As we blink, Middle Eastern airlines are reaping the benefits. There are more than six flights out of JKIA carrying east bound passengers via Dubai, Abu Dhabi and Quarter when we can cut the time by as much as four hours if we exploit the emerging opportunities and begin to challenge Middle East renaissance.

The beneficiaries of Chinese foray into Africa have largely been Arab nations with interests in Africa.

There is need for a paradigm shift from simply watching the unfolding new world to active participants with greater interest in Africa’s growth.

A large free trade zone outside of JKIA will be a trigger for greater trade penetration into virgin trade territories of Africa. Someone must take the lead and pull other African nations. The proximity of Kenya to most parts of the world dictates that that someone has to be Kenya.

The port of Mombasa or Lamu should be the gateway to East and Central Africa and replicate Singapore in the East. We can at least start with the expansion of the airport from six million to 50 million passengers and open new routes to the growing Asian market.

Put up new hotels and other supporting infrastructure around the airport. Upgrade the export processing zone into a free trade zone, encouraging offshore manufacturing in Kenya for the African market.

Develop capacity in logistic management to support the African market from Kenya.

Eleanor Roosevelt, a former US first lady, once said: “The future belongs to those who believe in the beauty of their dreams.”

The writer is a Senior Lecturer, University of Nairobi and a former Permanent Secretary, Ministry of Information and Communication.

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