Rising routes: How Kenya is shaping Africa’s logistics future

In 2025, Kenya finds itself at a defining moment in its economic story, where trade flows, investment inflows, and logistics capacity are intersecting to reshape the country’s position in the global supply chain. For decades, Kenya has been seen primarily as East Africa’s gateway, with the Port of Mombasa acting as the main artery of cargo movement for the region. But today, the country’s logistics sector is no longer just about being a transit corridor, it is evolving into a competitive hub in its own right. This transformation is the result of multiple, interlinked forces.

On one hand, Kenya’s policymakers have spent years laying the groundwork through deliberate reforms like strengthening institutions, digitising customs procedures, and pushing for investment in transport infrastructure like the Standard Gauge Railway (SGR) and road networks. On the other hand, the country has worked to expand its trade footprint through bilateral and multilateral agreements, most recently engaging in deeper discussions with the United States and Japan to enhance market access and investment opportunities. Simultaneously, the private sector has responded with bold investments in modern logistics parks, warehousing solutions, and technology-driven supply chain models. What ties all these efforts together is the recognition that logistics is not a background player but the engine that enables Kenya’s exports of mainly flowers, tea, coffee, avocados, and manufactured goods to reach global markets efficiently, while also ensuring the seamless inflow of critical imports such as fuel, machinery, and industrial inputs.

The transformation of Kenya’s logistics is therefore not a sudden occurrence but the outcome of years of steady, incremental progress now converging at the right time. For global investors and logistics players, Kenya represents not only a reliable entry point to the fast-growing East African market but also a testing ground for innovation, partnerships, and sustainable growth strategies that could redefine supply chains across the continent.

Foreign Direct Investment: A steady ascent
Kenya's allure as an investment destination is underscored by the 2024 Foreign Investment Survey Report, which indicates a 13.3% increase in FDI assets, rising from KSh 328.9 billion ($2.53 billion) in 2022 to KSh 372.5 billion($2.87 billion) in 2023. This growth reflects a broader trend where 95% of Kenya’s cumulative FDI of $2.75 billion has been attracted post-2007, with a notable peak at $2.23 billion in 2011.

The diversification of FDI sources is equally noteworthy. The United States, traditionally a significant investor, has seen its FDI stock in Kenya fluctuate, with recent years indicating a resurgence in interest. This renewed engagement is partly attributed to Kenya's strategic positioning as a gateway to the East African market and its commitment to enhancing the business environment.

Trade dynamics: Balancing imports and exports
Kenya's trade landscape in 2025 presents a complex picture. On one hand, the total import value decreased from KSh 226.4 billion ($1.74 billion) in February 2024 to KSh 208.2 billion($1.6 billion) in the same month of 2025, signaling a contraction in import activities. On the other hand, export activities have shown resilience, with key sectors such as horticulture, tea, and coffee maintaining their prominence in international markets.

The government's efforts to diversify export markets, particularly through trade agreements with Japan and the United States, have been instrumental. These agreements aim to reduce trade barriers, enhance market access, and promote Kenyan products globally, thereby fostering a more balanced trade environment.

Infrastructure development: The backbone of trade
Infrastructure development remains central to Kenya's trade strategy. The Port of Mombasa, East Africa's primary maritime gateway, has experienced significant growth, handling 41.1 million tonnes of cargo in 2024, up from 35.98 million tonnes in 2023. This 14% increase underscores the port's expanding capacity and efficiency .

Complementing this is the Standard Gauge Railway (SGR), which has seen a surge in freight volumes, reaching a 13-month high in March 2025. The SGR's role in facilitating the seamless movement of goods from the port to inland destinations is pivotal in reducing transit times and costs, thereby enhancing supply chain efficiency.

Logistics and supply chain: The ripple effect
The convergence of increased trade and robust infrastructure has profound implications for Kenya's logistics and supply chain sectors. The rise in cargo volumes necessitates advancements in warehousing, inventory management, and last-mile delivery solutions. Moreover, the emphasis on digitalisation and automation is reshaping logistics operations, making them more agile and responsive to market demands.

Strategic locations like Tatu City Special Economic Zone (SEZ) are emerging as logistics hubs, attracting global players such as Emirates Logistics. The establishment of a state-of-the-art facility in Tatu City underscores the growing confidence in Kenya's logistics capabilities and its potential as a regional distribution centre.

Global partnerships: A gateway to new markets
Kenya's proactive approach to forging trade agreements with global powers like Japan and the United States is yielding tangible benefits. These partnerships not only open new markets for Kenyan products but also facilitate technology transfer, capacity building, and investment inflows. The recent agreements are expected to bolster sectors such as agriculture, manufacturing, and technology, aligning with Kenya's Vision 2030 objectives.

At the Ninth Tokyo International Conference on African Development (TICAD 9), held in Yokohama, Japan, Kenya and Japan reaffirmed their commitment to deepening bilateral trade and investment relations. President William Ruto highlighted the need for tariff reforms and increased access for Kenyan agricultural exports, such as avocados and tea, into the Japanese market.

A significant outcome of the conference was the signing of a yen-denominated loan agreement, backed by Nippon Export and Investment Insurance (NEXI), aimed at supporting Kenya's vehicle assembly and energy sectors. This financing is expected to reduce Kenya's borrowing costs and address challenges in electricity transmission.

With the expiration of the African Growth and Opportunity Act (AGOA), Kenya has intensified efforts to establish a reciprocal trade agreement with the United States. In August 2025, Kenyan officials, including Trade Cabinet Secretary Lee Kinyanjui, engaged in high-level discussions with U.S. counterparts to explore new trade avenues. Kinyanjui emphasised the importance of these talks, stating, "We are looking to secure market access for our exports and attract more U.S. investment into Kenya."

These discussions build upon earlier meetings in March and May 2025, focusing on areas such as agricultural exports, manufacturing, and technology transfer. The goal is to create a mutually beneficial trade framework that supports Kenya's economic growth and enhances its integration into global supply chains.

The road ahead: Challenges and opportunities
While the prospects are promising, challenges persist. Infrastructure bottlenecks, regulatory hurdles, and global economic uncertainties pose risks to sustained growth. However, Kenya's commitment to reforms, coupled with strategic investments in infrastructure and human capital, positions it to navigate these challenges effectively.

In conclusion, Kenya's journey in 2025 is characterised by a harmonious blend of investment, trade, infrastructure, and global partnerships. As the nation continues to strengthen its position in the global supply chain, the interplay between these elements will be crucial in determining its future trajectory.