Congestion at Mombasa port slows down trade in EAC bloc
Mombasa port will have to overcome numerous challenges before competing in the global maritime industry. Lined in neat ordered rows are long queues of containers at Mombasa terminal. That is the picture of a congested port — one where demand for stacking space of containers approaches its capacity due to cumulative higher charges, Business Daily Africa reports.
Last year, the port handled some 19. 6 million tonnes of cargo, of which about four million tonnes were imports and five million tonnes were in transit to neighbouring countries.
In the same period, the port handled more than five million tonnes of traffic, up nearly 30 per cent since 2006, of which Uganda is the largest destination of transit cargo accounting for nearly 80 per cent of that figure — 4.2 million tonnes — with 90 per cent comprising imports. It is followed by Democratic Republic of Congo (DRC), which is the second-largest transit market taking up to eight per cent share of the total at 430,000 tonnes.
Of the total volumes handled through Mombasa, 72 per cent goes to Kenya’s domestic market, 22 per cent to Uganda, 2.3 per cent to the DRC, 1.5 per cent to Rwanda and less than one per cent to Tanzania, Burundi, South Sudan and Somalia.
Traffic through the port has grown over the last decade from 9.1 million tonnes in 2000 to 19.6 million tonnes in 2011, an increase of 7.4 per cent annually. The multipurpose port in East Africa has a number of issues accounting for delays in clearing cargo destined to Uganda and other regional states that depend on the facility for trade.
Too often, it’s not clear which player is responsible for a crisis at the port. With a number of institutions involved in handling cargo from the port — the Kenya Ports Authority (KPA), Kenya Revenue Authority (KRA), Kenya Bureau of Standards, Kenya Plant Health Inspectorate Services, Port Health Authority (PHA), Dairy Board of Kenya, National Bio-safety Authority, Anti-Counterfeit Agency and Port Police — as each player passes the buck to another, affecting container inflows and outflows in different ways.
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The maze containers go through at the port before they are forwarded to their final destination affects traders most because they incur demurrage charges for the extra time spent there.
Clearing is not only very complex but also a lengthy and cumbersome exercise, Maritime Freight Company Limited managing director PJ Shah said.
“Under Section 34 of the East African Community Customs Management Act 2004, an importer is required to enter goods to a Customs entry within 21 days after the commencement of discharge of cargoes from the carrying vessel,” he says.
TradeMark East Africa estimates that close to two thirds of shipments, about 20 per cent, experience non-tariff barriers — restrictions and limitations that act as hindrances to trade. These also hurt investor perceptions about a country.
TradeMark East Africa regional Trade and integration director Jose Maciel says companies spend about $145,000 (Sh12.5 million) a month on employees’ time and accommodation costs due to non-tariff barriers and delays.
Removing the hurdles would reduce the costs of transporting goods, thereby, slashing prices while increasing peoples’ purchasing power, lowering corruption, and inflation.
There is no uniform recognition of standards of goods at the border.
“There is lack of mutual recognition of standards marks and retesting of goods,” Mr Maciel says, adding that this increases the time it takes for goods to reach the market and costs associated with retesting goods.
