Kenya eyes additional Sh110bn after Mombasa port reforms
Containers at the KPA’s container terminal at Mombasa port. FILE
What you need to know:
Experts say new Mombasa port to earn economy an additional Sh110.5 billion.
The ongoing administrative reforms at the Mombasa port will cut average transit cargo clearance time by two days with economy netting additional Sh110.5 billion in reduced cost and increased trade volumes by 2015, experts said.
The port’s legal reforms, space rationalisation programme and improvement of its Kipevu and Kilindini berths are expected to start immediately after the UK announced a Sh4.5 billion financing for the projects.
“This investment will deliver fundamental improvements to efficiency in the port and have an overall goal of achieving greater prosperity for the people of Kenya and fulfilling President Uhuru Kenyatta’s vision of double digit growth,” Dr Christian Turner, the British High Commissioner said in a statement last week.
Among the legal changes lined up include the initiative dubbed Port-wide productivity improvement programme spearheaded by TradeMark East Africa, the scope of Kenya Ports Authority (KPA) Act will be reviewed to recognise other East African Community countries.
The move is aimed at eliminating the current restrictions faced by traders from landlocked countries who rely on the Kenya-based facility for imports and exports.
Mombasa is a lifeline port for Kenya and its landlocked neighbours, handling about 20 million tonnes of cargo which is projected to rise by 400 per cent by 2030.
“The modernisation of the port is not just timely but vital towards unlocking the economic potential of the region”, said Dr Jo Abbot, head of DFID Kenya.
The UK government officials toured the port last week on Thursday, the same day that President Kenyatta ordered government departments to ease administrative red tape and reduce time taken by cargo on the Mombasa-Malaba road from 18 to five days.
The presidential directive to be implemented in three weeks, will be supervised by a Cabinet sub-committee of Cabinet Secretaries that run the Northern Corridor agencies. Its progress will, however, be assessed during cabinet meetings which are usually held on a weekly basis.
Earlier, President Kenyatta ordered sweeping administrative changes at Mombasa port, the highlight being placing all the agencies under the KPA and asking Kenya National Bureau of Standards (Kebs) to construct a testing facility at the coast.
The inefficiency and slow pace of moving goods on the northern corridor has in the past seen landlocked neigbours, especially the Uganda-based shippers, threaten to dump Mombasa for Port of Dar es Salaam.
At some point last year, Uganda was leading a campaign to join hands with Rwanda and Burundi in building another transport corridor through Tanzania and eventually ditch northern corridor.
Shippers based in the three countries have also complained against restrictive axle weight rules at weighbridges, bribes demanded by Kenya Police and arbitrary charges levied by agencies such as Kenya Plant Inspectorate Service.
The port of Mombasa serves most of the countries in the East African region. According to KPA 2012 performance data, Uganda remains the predominant transit destination of transit cargo passing through Mombasa port accounting for 4.85 tonnes or 73.1 per cent last year’s total transit traffic.
South Sudan, emerging as a new key transit destination, took second place after Uganda, with a total traffic of 766,656 tonnes or 11.6 per cent share of the 2012 transit traffic followed by Democratic Republic of Congo with a total of 482,358 tonnes.
Rwanda (of 260,238 tonnes), Tanzania (186,169 tonnes) and Burundi (39,160 tonnes) took the fourth, fifth and sixth positions respectively.
