Manufacturers in Kenya are keen to tap on the country's trade pacts to grow exports, amid continuing market diversification to reduce vulnerability from external shocks.
This will be driven by the Route to Market Strategy 2025–2027; a blueprint aimed at positioning Kenya as a globally competitive, digitally empowered exporter of high-quality goods.
This is through a joint plan of action by the Kenya Association of Manufacturers (KAM) and the Danish Industries East Africa.
According to KAM, Kenya’s export markets are heavily concentrated, with over 65 per cent of exports destined for the EU, United States and the East African Community (EAC) member states, rendering the economy vulnerable to external shocks, as evidenced by supply chain disruptions during the Covid-19 pandemic.
This, even as exports remain a cornerstone of the national economy, contributing approximately 7.2 per cent to GDP and directly or indirectly employing over 1.5 million individuals.
The sector is anchored by traditional industries such as horticulture, which generates an estimated $1.2 billion (Sh156.2 billion) annually, primarily through the export of cut flowers, fresh fruits and vegetables to the European Union.
Tea and coffee, long-standing pillars of Kenya’s agricultural exports, continue to play a significant role but face mounting pressures from global price fluctuations and intensifying competition from producers in Asia and South America.
The textiles and apparel sector, buoyed by preferential access to the US market under the African Growth and Opportunity Act (AGOA), has shown resilience, yet its growth is hampered by limited value-addition capabilities and fierce competition from countries like Bangladesh and India, KAM notes.
The industries lobby group is pushing the country to tap opportunities in the African Continental Free Trade Area (AfCFTA) which offers more opportunities, with its integrated market of 1.3 billion consumers creating new avenues for intra-African trade in cereals, construction materials and value-added manufactured goods, sectors where Kenya holds comparative advantages.
It is also pushing for more export markets away from the traditional ones.
The strategy targets to double the share of processed exports by 2028 with sector -specific initiatives in horticulture (transition from raw flower exports to value-added products like essential oils, dried fruits, and cosmetic extracts.”
In mining, the country’s industries have been urged to move beyond raw mineral exports to production of high-value products or components while also expand processing of tea, coffee and macadamia nuts into packaged beverages, organic skincare products, and gourmet food items for the Agricultural sector.
“Trade is no longer just about what you sell, but how you move, measure, certify and connect. Therefore, Kenya needs to be proactive, not reactive. Readiness today means a digitally armed exporter, backed by a responsive state, empowered with real-time intelligence and bold enough to compete on a global stage,”KAM chief executive, Tobias Alando, said.
The association is keen to expand the reach of Kenyan exporters by leveraging regional, continental and global trade agreements key being AfCFTA, AGOA, European Union Economic Partnership Agreement (EU-EPA), the Common Market for Eastern and Southern Africa (COMESA) , East African Community (EAC) and Kenya-UAE Comprehensive Economic Partnership Agreement (CEPA).
Kenya also has bilateral trade agreements with several countries including China, India and the United Kingdom.
These agreements provide preferential access to key markets and facilitate trade in various sectors, including minerals, textiles, and processed foods.
The strategy launched in Nairobi on Wednesday is pegged on four key pillars of market diversification and trade agreement utilisation, digital preparedness and trade intelligence, compliance with international standards and sustainability, and enhancing exports through clusters and value addition.
Danish Industry East Africa regional manager regional manager Klaus Christensen said: “The potential is huge for Kenya to ramp up exports which includes supporting SMEs to become exporters.”
Structural challenges persist, however, undermining competitiveness.
They include logistical inefficiencies, including exorbitant transport costs (accounting for 30–40 per cent of export values for perishable goods) and inadequate cold chain infrastructure, severely eroding the profitability of high-potential sectors like horticulture and dairy.
There are also concerns over delays at the Port of Mombasa, compounded by bureaucratic red tape at border crossings, further exacerbate lead times and squeeze profit margins.
Non-tariff barriers (NTBs) also pose additional hurdles, with Kenyan exporters grappling with stringent EU phytosanitary standards, complex certification processes for organic and fair-trade products, and misalignment between Kenya Bureau of Standards (KEBS) protocols and international benchmarks.
Another challenge is financial constraints, particularly for agricultural cooperatives and export-oriented enterprises which face limited access to affordable credit, alongside currency volatility that destabilises pricing for import-dependent industries.
For instance, fluctuations in the Kenyan shilling have recently increased production costs for textile manufacturers reliant on imported synthetic fibres, squeezing already narrow profit margins.
