Business Daily (Nairobi)
Washington Gikunju
5 February 2008
A group of Nairobi-based business executives who had on Friday gone to witness the launch of the Rwanda Stock Exchange missed their flight back home when they got stranded in Kigali.
The oil taps had run dry and they were forced to send desperate appeals for some jet fuel from neighbouring Burundi. Back home, some parents in Kisumu who had gone out to do their back-to-school shopping are reported to have complained that they could not get a lot of items on their shopping lists.
Though the two incidents were happening hundreds of miles apart, the misery associated with them could be traced to the same root cause: the destructive impact of the post-election violence triggered by the disputed December presidential poll on road transport.
This crisis has also helped to throw into sharp relief the strategic economic and security role that Kenya's transport network and particularly the Port of Mombasa plays in five nations in East Africa and the Great Lakes region.
For five weeks, protesters, mostly rent-seeking ethnic gangs have been blockading roads in North Rift and some parts of western Kenya, blocking the flow of goods in the economy forcing trucking companies to suspend operations or seek expensive security escorts.
While blocking the roads have sparked a shortage of crucial goods in these parts of the country, the crisis has had a devastating impact on the flows of goods to landlocked neighbours.
In some weeks, this crisis virtually cut of the supply chain network of regional countries such as Uganda, Rwanda, Burundi parts of Democratic Republic of Congo and Southern Sudan.
The violence has also had a major negative impact on the Port of Mombasa where off-loading of goods had slowed to a crawl.
The port at the Kilindini harbour employs more than 5,000 Kenyans permanently and an average of 1,500 others on a temporary basis.
The Kenya Shippers' Council estimates that about 95 per cent of Kenya's export-import business depends entirely on the Mombasa port as a gateway for their goods.
Though it has been dogged by mismanagement in the past, injection of some level of professionalism has seen the business submit to the exchequer a total of Sh1.3 billion in dividends over the last three years to 2006.
Ugandan president Yoweri Museveni was quick to jet into Nairobi when he realised that his country's economic growth was threatened by the apparent political stand off that had disrupted supply of raw materials and other imports to his country.
The Uganda Manufacturers Association last week told journalists that they had so far lost about Sh2.5 billion in delayed goods deliveries, merchandise burnt en route and drops in productivity due to lack of raw materials. But some manufacturers thought that the figure was conservative.
As containers were piling at the port by the minute, some ships full of goods were forced to dock in the high seas as they awaited their turn to off-load cargo.
According to the Kenya Ports Authority (KPA) head of corporate affairs, Mr Harry Abok, operations at the port have come under increasing pressure in recent years as the regional economies continued to post successive years of impressive economic growth.
He says the congestion had however eased significantly with the number of ships waiting to offload in the high seas down to two from a high of nine at the peak of the crisis.
The number of containers lying at the port also hit a high of 21,000 units against a holding capacity of 14,200 units but this has now eased to about 10,804 containers as at Friday last week.
This was after KPA and the Kenya Revenue Authority agreed on a formula to transfer containers to three privately managed Container Freight Stations.
Police escorts were employed to transport cargo to these stations and KPA achieved an all time high cargo removal at the rate of over 800 containers per day under a 24-hour schedule.
KRA is also working on a plan to allow for direct haulage of containers to Inland Container Depots in Nairobi and Mombasa to ease congestion at the already overstretched port, which is considered a crucial revenue collection point.
As the political standoff drags on, some analysts have argued that the crisis has opened an opportunity for Dar-es-Salaam to push for the activation of the southern corridor.
The Kenya Shippers Council executive director, Mr Gilbert Langat, says some exports from Rwanda, Burundi and DRC have been passed through the Dar port.
This is despite the almost double distance and inefficiency of the Dar port, whose dwell time is 20 days against Mombasa's 13 days.
Mr Langat says transporters have so far lost an average of Sh400 million in assets and over Sh6 billion in lost business opportunities.
KPA however allays fears that Mombasa could have lost some of its cargo business to Tanzania's Dar-es-Salaam port, saying that Mombasa port's capacity is still superior to Tanzania's.
"At the beginning of the post election crisis one ship went to Dar-es-salaam hoping to discharge cargo there more quickly but it returned after realising congestion in Dar es Salaam was worse than in Mombasa," says Mr Abok.
Tanzania is also disadvantaged in that it does not have oil storage facilities like Kenya, a crucial import commodity in the region.
Mr Abok however says that the authority intends to undertake a serious marketing campaign in the hinterlands to bring back possible lost business and even boost it further.
About 70 per cent of the cargo that is offloaded at the Mombasa Port is captive, meaning that it is meant for inland destinations with 30 per cent going to the hinterland countries.
Be the first to Write a Comment!
Copyright © 2008 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
