Fuel shortage over Kenya’s delayed poll results

Saturday March 9 2013

Fuel trucks queue during a shortage. Photo/FILE

Fuel trucks queue during a shortage. Photo/FILE 

By JOINT REPORT The EastAfrican

Kenya’s landlocked neighbours are grappling with shortages of fuel and other commodities after delays in releasing results of the country’s hotly contested presidential poll slowed business activity, hurting supply chains.

Transporters using the Northern Corridor to Uganda, Rwanda, Burundi, Eastern DRC and South Sudan scaled down their operations over fears of a possible outbreak of violence. As a result, cargo was piling up at the port of Mombasa, raising fears of congestion.

Although Kenya had, on the eve of the election, deployed extra security personnel along the Mombasa-Malaba highway and the Kenya-Uganda railway to guard against any disruption, traders in Uganda and Rwanda adopted a wait-and-see position.

The delay in the results was caused by the breakdown of the electronic results transmission system of the Independent Elections and Boundaries Commission (IEBC), forcing the commission to revert to manual tallying of votes, a process that was ongoing on Friday.

As of Thursday, only 40 trucks were being loaded with cargo out of the port, compared with 400 trucks loaded every day, said Kenya Ports Authority (KPA) officials. Railway transport was also affected, loading less than its usual 40 containers per day since Sunday.

James Baitwa, the managing director of Threeways Shipping, said cargo movement between Kenya and Uganda was down 90 per cent.

“There is very little cargo movement on the road because of security concerns. The prolonged outcome may see us holding out until Monday (March 11), or until there is a clear outcome,” he added.

If the uptake of cargo does not resume quickly, congestion is likely to be experienced because as of Wednesday, March 6, the existing storage space could only accommodate 7,000 more containers.

On Thursday, the container terminal reported brisk business, with berths 11 to 18 fully occupied where six container vessels were handled for export and import cargo, said KPA corporate affairs manager Bernard Osero.

According to KPA, 12 vessels are expected at the port in the next two weeks with 131,093 tonnes. The vessels will return with a load of about 860 tonnes.

“Berth 19, whose handover is expected by the end of the month has a capacity of 200,000 twenty-foot equivalent unit (TEU). With the current uptake, we do not anticipate congestion, but in the unlikely event that it happens, the new berth will come in handy,” said Mr Osero.

Still, businesses in Kenya have scaled down operations until the outcome of the elections is clear.

For much of last week, Nairobi’s Central Business District was a pale shadow of its usual bustling self, as most business owners opted to keep their stores shut until the final results were announced.

“We had not stockpiled in advance, and business is bad at the moment,” said Atul Shah, managing director at Nakumatt Holdings, the regional retail chain. “We’re having shortages of some products such as fresh produce as transporters are not doing long-haul deliveries. Also, we find that these products are experiencing a huge price hike.”

But Mr Shah was optimistic that the situation would quickly return to normal.

The slowdown is expected to adversely impact the projected economic growth of 5.5 per cent this year, said the Kenya Private Sector Alliance (Kepsa).

Among the firms feeling the pinch of the economic shutdown are manufacturers of perishable commodities.

A major milk producer, which is active mainly in the Rift Valley and parts of Central Province, reported a sharp reduction in active capacity, with production going down from the usual 130,000 litres a day to just about 104,000, a 20 per cent drop.

“We have had to cut down on operations as orders from retailers, mainly big retailers have gone down considerably. Mombasa orders are down by half while in Kisumu, it is at 80 per cent. The supply from farmers has also come down. Yesterday [Wednesday], we collected just 18,000 litres from Eldoret, against a normal average of 30,000. On the eve of the election, some 30,000 litres of raw milk went to waste as we had no orders to service,” said an employee of the dairy firm, on condition of anonymity.

In Uganda, the Kampala City Traders Association (Kacita) had advised its members to either reroute their consignments through Dar es Salaam, or hold any imports at the port until the situation settled, after suffering losses during the post-election violence of 2007-08 for which they have unsuccessfully pursued compensation from Kenya.

However, the Dar es Salaam route is nearly 500 km longer than the Mombasa route, making it more costly for transporters.

“We advised our members in advance to either stock in time before the election, or if they could not, suspend Mombasa and use the Tanzania route,” said Kacita spokesman Issa Ssekitto, adding that the country had enough fuel stocks to last to the end of the weekend without a crisis.

Uganda consumes 3 million litres of fuel a day on average but has no national reserves. On average, dealers’ storage facilities can hold stocks lasting 5-10 days.