Kenya invests $1 billion to boost Mombasa port capacity

Tuesday morning, last week, a titanic cargo ship imposingly filled the Mombasa port berth–it had arrived from China the previous night and was awaiting clearance before it could be emptied; the ship was one of several other vessels docked at East Africa’s largest port. Mombasa port means business and after handling a record million containers in 2014, authorities of the northern corridor anchor port have revealed they are investing US$1billion to expand the port’s facilities to boost its capacity to handle more cargo. The Japanese government is funding the larger portion of the budget through its International Cooperation Agency (JICA), a revelation made by Gichiri Ndua, the managing director of the Kenya Ports’ Authority (KPA), during a media workshop held in Mombasa, last week. For the first time in its history, Mombasa port, in 2014, handled a total of 24.9 million tonnes and over one million twenty-foot containers (TEUs) and it appears that after setting such landmark, there’s no turning back. The sight of large KPA billboards can’t be missed in Kenya’s coastal city, boasting about the millionth container; it was a landmark development that saw the port move seven steps up to its current rank of 112 among the world’s top 120 performing ports. In Africa, the Port is ranked among the top five on a list that includes South Africa’s Durban, Egypt’s Alexandria and Port Said as well as Morocco’s Tangier Med. “Expanding the port of Mombasa capacity is in line with our continued effort towards achieving world class status,” said Ndua. Although it may take Mombasa some time to make it to the world’s top ten ports, a line-up currently dominated by Asian countries, Kenya seems to be determined in its efforts. “We must keep up the pace with emerging global developments and strive to sustain a top position as a Container Port in Africa,” said Martin Mutuku, KPA’s head of corporate development. Those efforts include the ongoing construction of a second container terminal as well as converting three of the port’s berths (place where ships dock) into a modern container handling facility whose first phase is expected to be ready for use, early next year. Given that East African countries are net importers of petroleum products, Kenyan authorities also have plans of constructing a new oil terminal at Mombasa port with capacity to hold four ships at once; these are exciting developments for a fast growing region, observers note. The new oil terminal to be built at a newly identified site within the harbor, will replace the current Kipevu oil terminal, and according to Ndua, preliminary designs and the geo-technical investigations will be ready by next year. “We shall tender for construction early 2016,” he revealed. Import dominated traffic Those expansionary developments are expected to be complete before the end of 2016 setting the platform for more robust maritime trade in a year where Africa’s GDP growth is expected to strengthen from 4.5 percent in 2015 to 5 percent next year. According to the African Economic Outlook, East Africa will be one of the fastest growing regions on the continent, a prospect that will pile pressure on the region’s two main ports, Kenya’s Mombasa and Tanzania’s Dar es Salaam. Mombasa alone is the gateway to Kenya, Uganda, Rwanda, Burundi, South Sudan, Northern Tanzania, Eastern DRC and Ethiopia with 33 shipping lines connecting these countries to at least 80 destinations around the world. Unfortunately, the latest cargo statistics from the port indicates that there are more imports arriving in the region than exports being sent out and experts are urging countries to invest in their manufacturing sectors to support value addition and overturn the trend, progressively. For instance, in the first nine months of this year, the port handled a total of 19.87 million tonnes of cargo compared to 18.05 million tonnes in the same period last year. However, imported goods have dominated trade volumes, accounting for 16.76million tonnes of the total cargo in the first nine months compared to exports which accounted for 2.71 million tonnes of cargo during the same period. The import dominated trade partly explains why the region’s local currencies have experienced fast depreciation in recent months leaving the countries’ central banks battling forex exchange pressures. Uganda, for instance, which dominates the traffic of transit cargo through Mombasa, has announced it will borrow some US$200 million in a bid to stabilise its shilling which has registered the worst depreciation rate against the dollar, in the region. The country’s imports account for more than 85 percent of its cargo transiting through port of Mombasa, according to port officials; it is not much different from the other user countries. According to the latest statistics from the port, 76.7 percent of all transit cargo through Mombasa is destined for Uganda followed by South Sudan at 10.6 percent and 5.7 per cent to DR Congo. In spite of the improvements at Mombasa and other recent developments on the northern corridor, Rwandan traders still prefer to use Dar es Salaam on the central corridor and its cargo volumes through the Kenyan port only account for 3.3 per cent of the total transit cargo. However, the recent spate of disappearances of Rwandan cargo at the port of Dar es Salaam could see a shift in trends as Rwandan traders, especially mineral suppliers, put the safety of their cargo ahead of everything else. Nonetheless, the race to improve capacity and trade facilitation at both ports, Dar es Salaam and Mombasa is seen as a good thing for trade in the region as it gives traders, especially those in Rwanda, two good options to use as trade routes. “We are not in competition with Dar es Salaam. We regard the two ports as complementary partners,” KPA’s Ndua remarked. editorial@newtimes.co.rw

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Kenya invests $1 billion to boost Mombasa port capacity