Turnover of the logistics industry in Kenya reached USD9.4 billion in 2015 and increased at a CAGR of 13% over the 2010-2015 period. One of the driving reasons for such growth is growing retail industry, which is forecast to jump almost 34% in real value terms over the 2015-2021 period.
Kenya, similarly to other East and South African countries, has structural issues in regards to logistics infrastructure and logistics competence, yet the situation is changing for the better. Moreover, Kenya is also attractive for its relatively stable political environment and ease of doing business compared to other African countries.
To support the growing supply needs for retail as well as other economic sectors, the Kenyan government launched a long-term development plan, Vision 2030, with an emphasis on large-scale transport projects in rail, road and shipping segments which is also set to boost demand for logistics services. As a result, transportation companies are making sure they are prepared for the increasing pace of demand growth. In 2016 Bolloré Group, a global logistics and transportation giant, already present in Africa for over a decade, announced a USD 21 million investment into expansion of its operations, and creation a new logistics hub in Nairobi.
The wide supply of retail property in the capital, and rising levels of disposable income among Kenya's middle class, are making Kenya an appealing first stop among overseas retailers. The expansion of the formal retail sector and shopping centres is observed not only in the capital of Nairobi, but also in other major urban areas. Similarly to Algeria, in mid-2016, Carrefour opened its first supermarket in Kenya in a franchise partnership with the Majid Al Futtaim Group. Carrefour's second outlet is due to open in 2017. Positive developments are lifting the share of formal retailing in Kenya to a higher level, also contributing to the attractiveness of the industry and paving the path for positive prospects and continuous demand for logistics services in the future.