Warehousing that’s critical to realising the AfCFTA dream

Kenya has often been referred to as the “gateway to East Africa” as a result of the strategic importance of the port city of Mombasa, one of the busiest ports on the East African coastline, and the central political and economic roles it plays in the region.

Since 2008, the Kenyan government has been pushing for rapid economic growth through social, structural and economic reforms under the Big 4 Agenda, which focuses on food security, affordable housing, universal health care, and manufacturing.

This is all aimed at turning Kenya into a middle-income country by 2030.

We are now in the last decade of achievement of Vision 2030, with numerous goals left to hit. The onset of the Covid-19 pandemic in 2019.

The depth and breadth of interference that the pandemic has had on global economies highlight just how vulnerable we are to shocks. Across sub-Saharan Africa, the combined shocks of Covid-19, conflicts, and climate change have denied more than 190 million Africans access to food.

This year’s Africa Green Revolution Forum held in Nairobi, brought stakeholders from all over Africa together to discuss how agriculture and agri-food systems can be transformed to improve food security and reduce poverty across the continent.

The African Continental Free Trade Area (AfCFTA) was singled out as an opportunity to increase intra-African trade and take advantage of a marketplace of 1.3 billion people with a combined GDP of $3.4 trillion, to freely move farm inputs and food products.

The AfCFTA not only considers the value that reduced trade friction will have on agriculture but also on all other sectors of African economies. It is estimated that by 2035, implementing the agreement could lift more than 30 million people from extreme poverty and 68 million more from moderate poverty.

Kenya, due to large-scale public investment in transport infrastructure, is poised to take advantage of the relative ease of movement of goods across borders as proposed by the AfCFTA.

Landlocked countries in East and Central Africa only have to look to Mombasa and the new Lamu port as the gateway to moving their goods to the world, and Kenya’s 50 million-strong population as a market for goods that aren’t produced locally.

While transport infrastructure has faced rapid and significant changes over the past decade, the warehousing landscape has pretty much remained stagnant.

Making savings

According to a recent report by the CDC Group on the impact of Grade A warehousing, businesses stand to make savings of between 45 to 60 percent on the cost of storage per pallet primarily due to the higher stacking heights allowed by Grade A warehouses of 12 metres or higher.

The report lists the myriad savings made on the turnaround time of deliveries (up to 63 percent) and on overheads.

These are all possible because of the thought that goes into designing the warehouses which consider not only profitability but also sustainability of businesses operating from them.