Financial institutions are still hesitant to invest in the country’s blue economy despite the huge potential in the special economic zone (SEZ) and trade route, which are estimated to be worth billions of shillings.

Industry analysts say that despite the government's recent efforts to encourage financing of the industry, banks fear the high market volatility and unclear regulation, making a risky venture.

Principal Secretary, State Department for Shipping and Maritime Affairs, Aden Millah, described the country’s blue economy as a "sleeping giant" with immense potential that banks can tap.

He said the industry was able to create millions of jobs for the youth, provide viable investment for the private sector and lead to the country’s economic growth.

The PS was speaking during the FY 2027/28 and Medium-Term Expenditure Framework (MTEF) Stakeholders' Engagement Forum at the Bandari Maritime Academy in Mombasa.

Kenya's strategic location along one of the world's busiest maritime corridors, its extensive 640-kilometre coastline and vast 230,000-square-kilometre Exclusive Economic Zone (EEZ).

“It's high time that Kenya's financial institutions must be part of Kenya's shipping and maritime journey. Our financial institutions must understand and support maritime investments," said Millah.

Although Kenya is touted as the gateway to Eastern and Central Africa, with the Port of Mombasa handling close to 40 million tonnes of cargo annually, the country still owns less than 0.01 per cent of the global merchant fleet and relies heavily on foreign shipping lines, marine insurance and logistics services, a gap that continues to export jobs and revenue that should be retained locally.

Millah said time has come for Kenyan banks, SACCOs, insurance firms, pension funds and development finance institutions to develop dedicated maritime financing products for ship acquisition, container freight stations, cold chain logistics, ship repair yards, marine fuel supply, inland water transport on Lake Victoria and Lake Turkana, aquaculture, seafarer training and port infrastructure.

"The maritime sector must become a stronger source of jobs, investment, trade, innovation, revenue and sustainable economic growth. Every dollar invested in shipping has a multiplier effect on transport, warehousing, manufacturing and coastal tourism,” noted Millah.

According to the PS, the State Department is prioritising interventions aimed at creating jobs for the youth, attracting private investment, strengthening Kenya's shipping capacity and positioning the country as a competitive maritime and logistics hub in line with Vision 2030, the Bottom-Up Economic Transformation Agenda (BETA) and the African Continental Free Trade Area (AfCFTA) opportunities.

He said the government is already investing in human capital through the Bandari Maritime Academy, which has been transformed into a centre of excellence for Standards of Training, Certification and Watchkeeping for Seafarers (STCW) courses, and through partnerships with global shipping lines to place Kenyan seafarers onboard international vessels.

Over 7,000 Kenyan seafarers are now registered, but less than 30 per cent are actively employed due to limited linkages with financiers and ship owners.

PS Millah emphasised the need for stronger partnerships between government, financial institutions, private investors, development partners, counties, academia and industry to unlock opportunities across the entire blue economy value chain, including shipping, logistics, maritime training, ship repair and building, marine insurance, maritime law, port infrastructure, inland water transport, fisheries and other blue economy activities.

He noted that Kenya spends over USD 1.5 billion annually on freight payments to foreign shipping lines, money that could be partially retained if local shipping companies are supported to acquire vessels and participate in regional trade.

"We cannot continue to be just consumers of maritime services. We must be owners, operators, insurers and financiers of maritime trade. That is how Singapore, Dubai and Rotterdam built their wealth," he said.

The PS challenged financial institutions to move beyond traditional sectors such as real estate and trade finance and to understand the long-term, low-risk nature of maritime assets, which have lifespans of 25 to 30 years and steady cash flows when backed by proper charter agreements.

He disclosed that the State Department is developing a Maritime Investment Policy and a de-risking framework that will include government guarantees, a maritime development fund and incentives for banks that lend to the sector, in collaboration with the National Treasury and Central Bank of Kenya.

The forum brought together government agencies, state corporations, county governments from the Coast region and Lake Victoria basin, development partners, private sector representatives, professional bodies such as the Kenya Maritime Authority and Kenya Ports Authority, academia, civil society and maritime industry stakeholders to shape priorities for FY 2027/28 and the Medium-Term Budget.

Participants called for allocation of more resources towards dredging and modernisation of small ports in Lamu, Malindi, Kilifi, Shimoni and Kisumu, development of a national shipping line through a public-private partnership model; expansion of the Bandari Maritime Academy campus; and establishment of a ship repair facility at Dongo Kundu.

They also urged the National Government to work with counties to map and secure maritime land for investment and to fast-track the enactment of the Merchant Shipping Act regulations to provide legal clarity for investors.

The PS assured stakeholders that their proposals will be incorporated into the 2027/28 Budget Policy Statement and the MTEF, with a focus on job creation, youth empowerment and climate-resilient maritime infrastructure.

He said the Ministry of Mining, Blue Economy and Maritime Affairs under Cabinet Secretary Hassan Joho is committed to making the blue economy contribute at least 10 per cent to GDP by 2030, up from the current estimated 2.5 per cent, through deliberate investment in shipping and logistics.

"Kenya has no reason to be poor when we have the ocean, the lakes and a strategic location. We have talked for too long; now we need capital to go into the water. I am inviting our banks to sail with us,” noted Millah.

The engagement forum is part of a nationwide public participation process required under the Public Finance Management Act, 2012, before submission of the Budget Policy Statement to Parliament.