Kenya on right track with sweeping changes at Mombasa port
Posted Saturday, September 14 2013 at 15:28
The government should also increase the capacity of the port to handle containers, which currently stands at under a million containers per year. The security at the port and throughout the Northern Corridor also needs to be enhanced.
The government needs to benchmark Mombasa port’s performance with other world class ports such as Shanghai, Singapore, and Hong Kong to meet and exceed their standards.
There is also the proposed $11 billion Bagamoyo port in Tanzania to be financed by the Chinese government. How will the proposed port increase trade?
On its completion, the Bagamoyo port aims to be among the top ports in the world. It will have the capacity to handle 20 million containers, far more than Mombasa and Dar es Salaam ports combined.
This could result in a major shift in the flow of regional trade towards Tanzania. However, this will only be felt once the Bagamoyo port is launched and becomes fully operational.
Kenya recently introduced a 1.5 per cent Railway Development Levy on all imports coming through Mombasa port. What steps will the industry players take to ensure they remain competitive?
The Railway Development Levy on all imported goods has been introduced as a means to finance the construction of a standard gauge railway to boost logistics efficiency in Kenya. The introduction of a 24/7 operation will go a long way towards facilitating faster turnaround and reduction on storage and demurrage.
Mombasa port will continue to be competitive as the consumer will see the value of efficient, timely logistics and the initial pinch of the price hike will be eased by profitable business returns.
Before the Kenyan General Election in March, importers took a cautious stance, which reduced trade in the country. What are the business prospects going forward?
During the election period, many importers adopted a wait and see approach towards the business environment in Kenya. However, following the peaceful election, including a peaceful resolution of the election petition, we have seen steady business growth as a result of greater investor confidence in the Kenyan business environment. We are positive that, by the end of the year, the business coming into Kenya will be meeting and exceeding our expectations.
What opportunities do you see in the logistics business with the introduction of county governments in Kenya?
The government has allocated Ksh210 billion ($2.5 billion) to county governments and the bulk of that will go into infrastructure. This poses great opportunities for the logistics industry in provision of services such as clearing, forwarding and warehousing.
We have also seen various county leaders seeking investors to partner in projects to support infrastructural development within their counties. This will no doubt attract more foreign direct investment to meet the current and emerging needs of the counties.
If the county governments succeed, Kenya will be a study in the success of devolved government.
Kenya plans to build a free port. What opportunities do you think this will present to the region?