A twin bind for poor nations

• The Red Sea crisis and now the US trade tariffs remain a major concern across economies in Africa.
• Kenya and other countries such as Ethiopia, Djibouti and Eritrea were among those heavily impacted at the start of the Russia-Ukraine war, which significantly affected global grain supply.
• Nairobi has traditionally relied heavily on wheat imports from Ukraine and Russia, sourcing over 80% of wheat. Other major sources for the grain are Argentina and the US.

Poor countries have been urged to seek alternative logistics corridors and diversify trade in the wake of continued global disruptions, amid a rise in both tariff and non-tariff barriers with the negative impact of Trump tariffs coursing through economies.

The East African region is among those that have been negatively impacted in recent years, spanning from the Russia-Ukraine war to the Red Sea crisis, which started in October 2023.

Global logistics leaders have now added the US President Donald Trump’s tariffs to the list of concerns that could negatively impact maritime transport, which accounts for over 75 per cent of global trade.

The Trump tariffs add pressure to the already struggling international trade where logistics costs have shot up since the attacks in the Red Sea commenced.

To date, statistics show that there has been over 100 attacks with at least 30 ships damaged by missile and drone strikes by the Yemen’s Houthi Rebels, which have been targeting commercial vessels, disrupting international trade.

Speaking at the just concluded International Transport Forum (ITF) 2025 Summit in Leipzig, Germany, experts called on poor countries to innovate, create new trade routes and markets to ensure food security and continued trade.

Red sea chaos, Russia-Ukraine war, Trump tariffs damaging global trade

Kenya and other countries such as Ethiopia, Djibouti and Eritrea were among those that were heavily impacted at the start of the Russia-Ukraine war which significantly affected global grain supply primarily due to the disruption of trade routes, that led to commodity price increases.

The country has traditionally relied heavily on wheat imports from Ukraine and Russia which is the source for more than 80 per cent wheat import, with other major sources being Argentina and the US.

It is also a maize importer from the region and international markets. At the time,  Kenya was forced to seek alternative markets for its maize imports from other countries including Tanzania and Zambia with most Sub-Saharan Africa countries hard hit by effects of the geopolitical occurrences.

“Many African countries depend on one logistical corridor hence there is need to rethink this and create more corridors to avert impact of disruptions and ensure food security and trade,” World Bank global director for transport, Nicolas Peltier-Thiberge, said.

The disruption in the Red Sea and Suez Canal has had a long-term effect on Kenya and Tanzania where according to the UN Trade and Development (UNCTAD), approximately 15 per cent of Kenya’s foreign trade (by volume) is channelled through the Suez Canal, while that for Tanzania is about 10 per cent.

With the two countries also having the only seaports in the region, it means landlocked countries in the East Africa Community are affected.

These are mainly Uganda, Rwanda, DR Congo, Burundi and South Sudan, albeit some are food sufficient hence able to feed their populations without necessarily depending on imports. However, their exports have been negatively impacted since the war as vessels reroute.

Also affected is Sudan, which heavily depends on the Suez Canal, with about 34 per cent of its trade volume crossing the Canal, and Djibouti whose 31 per cent of foreign trade is channelled through the Suez Canal.

Re-routing of vessels by global shipping lines to the Cape of Good Hope in South Africa translates into longer cargo travel distances, rising trade costs and insurance premiums, meaning with higher container leasing prices, with overall freight costs shooting over the last one year.

“There is a lot of uncertainty and reliability is no longer assured. Take the Suez Canal for instance, and 50 per cent of global maritime trade passes through here.  In 2023 and 2024, attacks on ships in the Red Sea force them to sail around Africa, near the Cape of Good Hope. That detour added 10 days to the voyage and freight rates skyrocketed. The transport links connecting the world are under pressure,” said ITF Secretary-General Young Tae Kim said.

Tatsuro Watanabe, Managing Executive Officer for Mitsui O.S.K. Lines, Ltd. (MOL) which is one of the largest shipping companies globally, warned that the US trade tariffs are expected to have a major impact on global trade.

China’s vessel production has seen a decline due to a combination of factors, including US tariffs, supply chain disruptions and a general shift in global manufacturing. With this, retailers have been relocating production from China to other Asian countries to mitigate these issues, leading to a drop in imports.

“This and other non-tariff barriers will have a major impact and any pandemic or crisis will worsen things including affecting how shipping lines operate,” Watanabe said,  highlighting the need to build a resilient freight and logistics sector to help navigating supply chain disruptions.

China is Kenya’s biggest import source where the country shipped in goods worth $4.5 billion (KES576 billion) last year from the Asian country, according to the Economic Survey 2025 by the Kenya National Bureau of Statistics, up from $3.6 billion (KES458.9 billion).

Africa, however, remains the biggest export market for Kenya where the value of exports last year closed at $3.3 billion (KES425.6 billion) , albeit being a drop from $3.4 billion (KES434.9 billion).

Push for more intra-Africa trade

The Kenyan government this year renewed the push for more intra-Africa trade under the African Continental Free Trade Area (AfCFTA),  which encompasses 54 African Union nations with a population of 1.3 billion people.

Established in March 2018, the AfCFTA aims to create a single continental market, promoting free trade and the movement of goods, services and people across Africa. The goal is to eliminate trade barriers, boost intra-Africa trade and enhance Africa’s competitiveness in the global market.

“I think as a country, we want to diversify and have more players into the market so that whenever you have one challenge such as we have today in tariffs, then the impact on the economy is minimised,” Kenya’s Trade Cabinet Secretary Lee Kinyanjui said during a recent forum in the UK.

With global protectionism surging, Kenya and other African countries are increasingly looking towards intra-continental trade as a bulwark against this tide.

This, as intra-African trade, which is still below its potential, is poised to grow two-fold in the next five years as member countries move to tap opportunities in the the combined GDP of $3.4 trillion market.

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