East Africa braced for ports battle

A Container Terminal within the Port of Mombasa. PHOTO | KEVIN ODIT | NMG

The new Lamu and Bagamoyo ports in Tanzania have the potential to challenge Mombasa’s dominance in the coming years, a new report says.

The 2022 African Ports report by advisory firm GBS Africa says Lamu’s and Bagamoyo’s depths and development into trans-shipment ports may in the long run give them an edge in terms of the size and number of vessels handled and time taken to move containers.

“Owing to depth the two ports can accommodate the big container ship. Small ships have now started calling into the Lamu port for onward transshipment to other ports of the world,” the report notes.

“So the containers move much faster thus many vessels might avoid the time to get to Salalah Port in Oman which will be of benefit to the new Kenyan second commercial port,” read part of the report published last week.

Mombasa Port is currently the biggest in East Africa and the second largest in Africa in terms of throughput. Mombasa receives an average of 3,000 containers daily.

Expansion and refurbishment

Following an expansion and refurbishment in 2013, the annual handling capacity of the port is now at 2.65 million TEUs.

The GBS report warns that without an actionable investment and expansion strategy, the Mombasa Port risks losing out to other regional ports and could fall into neglect like many other port facilities across the country.

The report also provides an overview of the competition for Indian Ocean trade market share and the challenges and opportunities within the region.

“For the continent to be fully integrated and for the vision of the African Continental Free Trade Area to be fully achieved, we must invest in Africa’s logistics sector. This will facilitate ease of movement of goods and services. It is therefore important to have predictable policies to attract investments in this sector,” GBS Africa Managing Partner Agnes Gitau said.

The report released last week says foreign direct investment is driving the expansion and rehabilitation of existing seaports, while entirely new facilities are also being rolled out.

China is pushing authorities in Tanzania to kick-start the implementation of the $10 billion Bagamoyo port project. If implemented, the Bagamoyo port is expected to be the largest port in East Africa.

It would have a capacity to handle 20 million containers by 2045, 25 times the amount of cargo that Dar es Salaam port handles today.

The port, to be built 40 nautical miles north of Dar es Salaam, would also dwarf Mombasa, located some 160 nautical miles to the north. Mombasa port trails Tanger Med in Morocco, which is ranked as Africa’s top port with a capacity to handle nine million Twenty-foot equivalent units (TEUs).

Kenya has explored the possibility of engaging private operators to develop and manage its port facilities, citing a lack of capacity at the State-run Kenya Ports Authority (KPA).

UAE-based Dubai Port (DP) World, which is among the private operators that have shown interest in Kenya’s port business, recently suggested it is being privy firm to a promise by the government to issue a request for commercial proposal for the development, operation and management of the country’s four ports by July.

The Treasury has since denied having made promises of a July tender.

Experts say that ports that shun partnerships with experienced foreign investors are set to lose out as competition for market share intensifies. The port of Salalah is the biggest in the Arabian Peninsula and most ships in Eastern Africa use it for transshipment both in and outbound.

This potentially puts Salalah in direct competition with Lamu. However, Kenya must take a bolder step to market the port so that scheduled cargo is directed to Lamu, says the GBS report.

Rail and roads

The are plans to utilise the port for cargo headed to the Southern parts of Ethiopia and South Sudan once the roads and rail connecting the two countries are developed.

Lamu is one of the flagship infrastructure projects under Kenya’s Vision 2030 and is being promoted as a transport corridor linking a new and modern Port of Lamu with Garissa, Isiolo, Maralal, Lodwar and Lokichogio. It will also be branching at Isiolo to Moyale at the border with Ethiopia and proceeding to the border with South Sudan.

The facilities at Lamu once complete are expected to create direct and indirect jobs across agriculture, fishery, manufacturing, logistics, transport, trade and commerce, among others.

Small ports

Kenya has more than 15 small ports, some of which are neglected or are too small to make economic sense and depend on modest tourism, fishing, and small-scale cargo.

The KPA is planning developments at most of these facilities, although the impact of these investments will be small-scale and highly localised.

Lake Victoria has Kisumu Port, which is a regional hub for petroleum exports to landlocked countries, such as Uganda and the DRC. The KPA plans to increase Kisumu’s local imports to 130,000 tons by 2025, and 180,000 tons by 2035, from 22,000 in 2014.

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