Ksh. 1.3 Bn fund to help cut fright costs
The regional transport and logistics business has received a boost following the launch of a fund aimed at reducing freight costs through the use of technology.
Dubbed Logistics Innovation for Trade (LIFT), the fund, amounting to Sh1.3 billion ($16 million), was launched in Dar es Salaam, Tanzania, and is expected to see the use of advanced business practices in the industry.
It will be used to search for solutions aimed at improving trade effectiveness in the region and facilitate doing business in the bloc.
According to a statement from TradeMark East Africa (TMEA), the EAC region currently has some of the highest freight and transport costs in the world.
Transport costs amount to 30-50 per cent of export value and up to 75 per cent for land-locked countries such as Rwanda and Uganda.
Speaking at the recently concluded shippers open day, the Cabinet secretary for Transport and Infrastructure, Mr Michael Kamau, noted that the cost of transporting export goods is 30 per cent higher than that in Southern Africa.
He said such charges account for nearly 40 per cent of the total cost of doing business in Kenya.