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EAC DISTRIBUTION STAKEHOLDERS CONVENE IN NAIROBI TO ADDRESS THE SECTOR CHALLENGES
- Published On: 2024-08-06
KEPSA participated in the Peer-to-Peer Learning Conference on the distribution services sector held at the Movenpick Hotel in Nairobi, Kenya, from the 1st to 2nd of August 2024. The inaugural conference, themed "Leveraging Integration: Strategies for a Dynamic Distribution Sector in the EAC," aimed to identify and address factors hindering the growth of the distribution sector in the EAC and to learn key strategies for developing the industry to benefit the private sector in the region.
In her remarks, Ms. Elizabeth Miguda, Deputy Director and Head of Regional Trade at Kenya's State Department of Trade, emphasized the significance of distribution services as a vital component of the economy, contributing significantly to domestic production and employment. She noted that the sector contributes approximately 11 percent to Kenya's Gross Domestic Product (GDP). Besides being a source of employment, the distribution value chains in key sectors such as agriculture and manufacturing offer multiple opportunities for professional firms.
Representing the EAC Secretary General, H.E. Veronica M. Nduva, Ms. Marie Angelique Umulisa, the Principal Trade Officer and Head of International Trade at the EAC Secretariat, highlighted the importance of distribution services, noting that the sector accounts for approximately 20% of global services trade. She stated that liberalizing distribution services in the region, considering the opportunities in the AfCFTA, would enhance operational efficiency, create economies of scale, and offer consumers better pricing, quality, and a broader range of options.
Ms. Wambui Mbarire, the Trade Sector Board Vice Chair at KEPSA, representing the Kenyan private sector, provided an overview of the regulatory landscape of distribution services in the EAC region. She highlighted several challenges facing the sector, including:
- Poor road networks, limited rail infrastructure, and inadequate port facilities.
- Regulatory and policy barriers, such as customs tariffs and non-tariff barriers (NTBs).
- Differing product standards and certifications across EAC countries which create barriers for regional distributors.
- Exchange rate volatility, affecting pricing and profitability for businesses dealing in multiple currencies.
- Limited adoption of digital tools and technologies.
- Inadequate data collection and analysis capabilities, hindering effective demand forecasting and inventory management.
These challenges were documented in a diagnostic study conducted under the EU-EAC CORE program. The study, reviewed at the conference, revealed that restrictive investment laws in the region impact the entry and operations of wholesale and retail firms across EAC Partner States.
The conference concluded with a focus on facilitating knowledge exchange among countries with successful reforms and foreign entities with advanced distribution practices. Discussions centred on inventory management, skill enhancement, and local supplier integration. A roadmap was agreed upon for implementing the conference's recommendations.