MOMBASA, Kenya — Kenya’s transport sector is plagued by restrictive laws, opaque regulatory practices, and state dominance that are driving up logistics costs and undermining regional competitiveness, according to a new report by the World Bank and CAK.
From maritime logistics to airlines and rail transport, the study identifies entrenched barriers that limit private-sector participation and raise costs for businesses and consumers.
In maritime transport, the report says vertical integration under the Kenya Ports Authority—where regulation and operations are housed within the same entity—has created conflict of interest and hindered private entry.
The authors recommend separating port regulation from operations to align with global best practice.
In aviation, the report points to foreign-ownership caps, opaque slot allocation procedures, and preferential treatment of Kenya Airways as significant barriers.
“These rules do not reflect a competitive aviation market and reduce Kenya’s attractiveness as a regional hub,” the report notes.
Rail operations remain dominated by state agencies, with limited scope for private investment under current laws.
Analysts say liberalising rail operations could improve efficiency and unlock lower freight costs for goods moving between Mombasa and inland markets.
The road transport sector faces its own hurdles, including fragmented county-level levies, cabotage restrictions, and inconsistent licensing requirements.
Trucking associations have long argued that the multiplicity of county fees increases transport costs and delays.
The report proposes harmonisation of county transport fees, removal of cabotage restrictions, liberalisation of rail services, and full adoption of international slot-allocation standards for airports.
