Nairobi, Kenya, 25th November 2014: A US$ 16 million challenge fund has been opened for innovators who can devise a strategy to crack the code into reducing the cost of transport and logistics in East Africa. The Logistics Innovation for Trade (LIFT) challenge fund will provide grants ranging from US$ 200,000 to US$ 750,000 to winning proposals from innovators from across the world but whose ideas will be implemented in East Africa.

LIFT is managed by TradeMark Africa (TMA) Challenge Fund with funding support from UK-DFID; and seeks to trigger and introduce innovative approaches to tackling freight and transport costs in East Africa region. East Africa is reported to have the highest freight and transport costs in the world; over 50% higher than the USA and Europe per kilometre. Indeed, transport costs for land locked countries in the region can be as high as 75% of the value of exports. Transit times have the most significant effect on exports and also result in firms having to carry higher levels of stocks making them less efficient. Successful LIFT project applicants will contribute to TMA objective of reducing transport time along the main East Africa transport corridors by 15% by 2016.

Speaking at the opening event, TMA Senior Director, Business Competitiveness Lisa Karanja said, “Our desire is to see East Africa adopt world class logistical technologies so it ably competes with the rest of the world. LIFT is a challenge to the private sector to develop and test new ideas that could reduce the cost and time of transport and logistics. Through the fund, TMA will co-invest with the private sector in projects that have the potential to achieve this but may be too risky to undertake without external support”.

She added, “Across trade, we’re calling on the world’s brightest minds to tackle East Africa’s toughest challenge in trade: Transport and Logistics. In the last few years, TradeMark Africa through its Challenge funds has rallied innovators, entrepreneurs, private businesses and IT geeks to tackle some of East Africa’s toughest trade problems. Today, East Africa is in dire need of new ideas and bold solutions to tackle its high transport and logistics cost.”

TradeMark Africa Challenge Fund manager, Mr. Isaac Njoroge said, “The Challenge fund comes in to help private businesses and innovators mitigate risks of high return projects that are risky and have not been tested. The fund is open to businesses and individuals throughout the world that are operating or will operate in EAC. Businesses in the transport and logistics industry and those who provide services to it are hereby invited to submit the most innovative ideas to LIFT.

Noting the contribution of Challenge funds in providing solutions Njoroge added, “Transit times are an important determinant of trade and the competitiveness of firms. A reduction of one day in transit times leads to 7% increase in export for example. Thus reducing cost and time of transport would increase trade, reduce cost of living and contribute to higher exports and faster growth to create jobs.”

Since its inception in 2012, TMA-Challenge Fund is supporting other Trade innovations worth US$ 10 million. Some of resulting innovations include: the recently launched Airtel Cross Border money transfer and the Africado Ltd project “Developing Export Markets for Avocado in Kilimanjaro Region.” The Airtel cross-border money transfer pilot phase is expected to roll out November 2014 with first phase targeting Kenya, Uganda and Rwanda. Africado Limited, on the other hand, invested in capacity-building activities for avocado farmers, construction of a packing, cold chain export facility using new technology which ensured packaging and preservation was optimized. This has led to less rejects on products exported to the European market, thus increasing returns to farmers. In addition to its original farmers, Africado was able to build the capacity of an additional 2000 farmers, who now grow export ready avocados, firmly placing them on a path towards prosperity.

Details for submission of proposals can be found in the LIFT website: www.lift-fund.com

TradeMark Africa (TMA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark Africa (TMA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, UK, and USA. TradeMark Africa (TMA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.