Shipping & Logistics

Unlocking maritime sector potential

Blue economy is seen as a sleeping giant capable of transforming Kenya’s  economic fortunes. FILE PHOTO | NMG
Blue economy is seen as a sleeping giant capable of transforming Kenya’s economic fortunes. FILE PHOTO | NMG 

Kenya has tapped experts from the International Maritime Organization (IMO) and World Maritime University to help the country lay a foundation on which the maritime sector will be built as the next economic frontier.

The experts say the sector has a huge latent potential but a number of impediments stand on its way.

The blue economy committee that was created in 2016 to help the country’s identify challenges in the performance of maritime sector said the 22 agencies overseeing the sector do not work closely, hence its poor performance.

“It was found out that the sector has many pockets of policies developed without consultation leading to duplication and waste of resources,” Nancy Karigithu, principal secretary Shipping and Maritime Affairs, told a team of experts meeting at the North Coast Hotel in Kilifi County last week to help in creation of an Integrated National Maritime Transport Policy.

The Treasury, maritime stakeholders, experts drawn from various sectors, members of transport committee in Parliament, among others attended the forum.

The blue economy committee, which reports every month to the President, will oversee the formulation, development and adoption of the new policy.

Apart from poor coordination, the national budgetary allocation to the sector was also cited as major concern. “A budget of the resources required will also be created. Due to the lack of a coherent and focused policy on the industry, it has been hard to get enough resources,” added Ms Karigithu.

With Kenya’s territorial waters covering 230,000 square kilometres and a distance of 200 nautical miles offshore and 10,700 square kilometres of inland waters, the country’s maritime sector has a huge potential to turnaround the economy, according to Shadrack Mose a member of Parliamentary Committee on Transport.

“A well networked maritime transport sector has great potential of spurring growth,” said Mr Mose, who is also the Kitutu Masaba MP, adding that Parliament was keen on the route the country has taken to grow its maritime sector.

Data from the Kenya Bureau of Statistics (KBS) reveals a sector that has been on the decline despite its rosy prospects.

According to the Economic Survey of 2017, the fisheries sub-sector registered a depressed performance for the second consecutive year, with total fish output dropping by 12.1 per cent from 146,300 in 2015 to 128,600 in 2016.

The total value of fish landed declined by 11.5 per cent from Sh20.9 billion in 2015 to Sh18.5 billion in 2016, according to the survey.

This is against a potential for Kenya’s fresh water and marine fisheries to produce in excess of 350,000 tonnes of fish valued at over Sh90 billion.

The survey also found that freshwater fish production dropped by 12.3 per cent from 136,400 in 2015 to 119,600 in 2016.  Lake Victoria made a significant contribution accounting for 82.5 per cent of the total freshwater fish production.

However, its output dropped by 10.2 per cent from 109,900 in 2015 to 98,700 in 2016. The decline, according to the survey, was partly attributed to the presence of water hyacinth and destructive fishing methods.

The marine fish landed declined by 10.6 per cent from 8,500 in 2015 to 7,600 in 2016. Although over 92 per cent of the Kenya’s international trade is conducted on sea, looking at investment profile, local investors have not been keen to pump capital in the maritime sector. For instance, while the Kenya National Shipping Line (KNSL) is struggling to stay afloat, the country does not have a single commercial ship.

This compares poorly to her land-locked neighbour Ethiopia which has 18 commercial ships earning the country over $40 million (Sh4.1 billion) annually.

However, the maritime sector is seen as a sleeping giant capable of transforming Kenya’s economic fortunes.

Mr Mose said Kenya has domesticated 26 international convention anchoring the country into the global economy, that if implemented would make the blue economy thrive.

With the discoveries and expected exploitation of gas and oil, the growing regional economies, the growth of the cargo throughput is expected to grow and put pressure on port infrastructural development as well as maritime security, all of which call for a renewed focus of the industry as the key driver of economy and job creation.

“The country can optimize gains by developing a special economic zone or fish processing plants,” Ms Karigithu said in an earlier interview.

“Kenyan coast is one of the preferred destinations for sport fishing with Malindi, for instance, the only place in the world that offers the best chance of catching five different billfish species in one day – broadbill swordfish, black, blue and striped marlin and sailfish – yet this potential has not been exploited,” she noted.

Cruise ship is another area with huge potential, targeting high end tourists. Industry experts say that 400 cruise tourists are equivalent to 4000 tourist by air.

Kenya Ships Agents Association estimates that 40 cruise ships calling at the port could translate to US$ 20 million (Sh2 billion). However, there is a positive development with the Kenya Ports Authority (KPA) currently developing a cruise terminal at a cost Sh100 million.