NAIROBI, (Xinhua) --
Kenya’s warehousing shortage is hurting economic
growth by reducing sales of manufacturers, according to a report
released on Wednesday.
released in Nairobi by mega-city developer, Tilisi Developments
Limited, shows that almost a fifth of manufacturers in Kenya
have lost sales in the past five years on a warehousing shortage
that is getting sharply worse.
suggest that Kenya may need three times the amount of warehouse
space currently available,” said the report.
The finding shows
that access and location are the largest problem facing the
current warehousing sector.
A detailed survey of
56 companies in Kenya, spanning manufacturing, pharmaceuticals,
horticulture, logistics and retailers, found that 16 percent had
sought new warehousing in 2017/2018, with a rising proportion
failing to find any solution.
The search levels
represented a sharp jump from the previous year, when 9 percent
of respondents searched for new warehousing, while 5 percent did
The survey shows
that the majority of companies seeking warehousing in the last
five years, being 31 percent of the total respondent base,
suffered business damage as a result of not finding adequate
“Some 43 percent
reported delays in meeting orders, while 29 percent reported
lost sales. A further 14 percent said the difficulty and
longevity of their search for new space delayed their expansion
plans,” states the report.
Kavit Shah, co-CEO
of Tilisi Developments, said the Kenyan gross domestic product
(GDP) is being hampered excessively by the difficulties involved
in finding new space for storing and sorting goods for
Shah said a
significant driver of demand for warehouses is the growth of
e-commerce sector in the country.
Shah added that
Kenyan warehousing is primarily made up of small-scale go-downs
in contrast with global markets because of the smaller size of
The CEO noted that
there is a low level of satisfaction with the quality of
warehousing in the country.
“About 43 percent of
pharmaceutical companies have reported warehousing problems
impacting medicines and healthcare while 38 percent of the Fast
Moving Consumer Goods have warehousing issues impacting
productivity and pricing,” he added.