Warehouse shortage hurting economic growth in Kenya

Warehouse space. There is a shortage of warehouses in the country./PHOTO COURTESY

According to research conducted by Tilisi developments limited, almost a fifth of manufacturers in Kenya have lost sales in the past five years due to warehouse shortage in the country.

At a press briefing in Nairobi, Tilisi CEO, Kavit Shah, said the survey they conducted indicated that 16 percent of spanning manufacturing, pharmaceuticals, horticulture, logistics and retailers had sought new warehousing in the 2017/2018, with a sharp rising proportion of failing to find any solution .

“Majority of companies seeking warehousing in the last five years being at 31 percent of the total respondent base, suffered business damage as a result,” the survey indicated.

The survey too revealed that some 43 percent of manufactures reported delays in meeting orders, while 29 percent reported lost sales.

“Kenyan GDP is being hampered excessively by difficulties involved in finding new space for storing and sporting goods for distribution,” the CEO said.

In the last five years 71 percent of the pharmaceutical companies surveyed searched for new warehousing, 43 percent of them last year.

Access and location were reported as the greatest difficulties, cited by close to two thirds of those who were currently dissatisfied.

Consequently, it emerged that lack of quality of warehousing is also affecting the prices of goods and the cost of living in the country.

“Businesses depend on lean supply chain processes to keep their costs low and achieve competitive advantage, yet poor inventory storage and management is leading to pricing in Kenya that is almost twice the best case levels,” Said Shah.