Traders in the landlocked hinterland countries like Uganda are seeking alternative routes to the sea to mitigate transportation costs for their imports and exports.
The move comes on the back of numerous complaints regarding the risks on transportation of imports and exports into and outside Uganda from the Transit Transport Corridors and ports of the East African Community (EAC) region.
Such hazards include political risks, cargo pilferage, risks of delays due to congestion especially on the Northern Corridor route port of Mombasa. This has resulted in losses and increased the cost of doing business for the Uganda business community.
Uganda's major access to international markets is through the port of Mombasa, on the northern corridor, a distance of about 1,200 km to Kampala, and through Dar es Salaam port on the Central Corridor, a distance of about 1,800 km. But with the Kenyan elections less than four months away, there are worries that the transit corridor through western Kenyan could be affected.
Statistics from the ministry of Trade show that about 90% of Uganda's imports and exports transit through Mombasa, while 5% goes through Dar es Salaam and about 5% transit through Entebbe International airport. Stakeholders at a consultative meeting organized by the ministry of Trade Industry and Cooperatives (MITC) in Kampala on August 9 argued that, it was time Ugandan traders sought alternative transit routes where they can minimize costs.
Kassim Omar, chairman of the Uganda Clearing and Forwarding Association (UCIFA), said the Ugandan business community needs to seize the Central Corridor opportunity and route their cargo by road through the port of Dar es Salaam. "With adequate port facilities, the port of Dar es Salaam offers the most viable and cost effective gateway to global trade. Cargo is handled efficiently to the satisfaction of customers," Omar said.
For fair measure, the ministry of Energy has tried to do something to motivate trader to use the Tanzania route. To encourage the use of the southern route, the ministry of Energy last September recommended a tax rebate of Shs 150 (about $0.06) per litre on products imported through Tanzania. To this day, the Energy ministry says its counterpart, the ministry of Finance is yet to act on this recommendation.
Omar said Dar es Salaam port has a target clearance time of 24hrs for transit goods. This, he said, is geared towards saving Ugandan shippers time and money. State Minister for Industry James Mutende said it takes 15 days before a ship is allocated a berth after docking at Mombasa, one week to discharge a ship, 18 days for a ship to be moved from the port to Container Freight Services (CFS) section.
Recent findings indicate that goods take about 44 days to reach Kampala after arriving at Mombasa port, 14 days more than the recommended 30 days. Mutende said it takes two days for a truck to move from the CFS to Nairobi and another two days for the truck to move from Nairobi via Malaba to Kampala.
"This can be a risk in itself. I would like to challenge you to look at all available measures to mitigate risks to Uganda exports and imports," Mutende said.
The chairman Kampala City Traders Association (KACITA), Everest Kayondo, said that while Mombasa port was shorter; it had a lot of issues. He said during the 2007 Kenya elections a lot of cargo was damaged and has never been compensated.
"Kenya is going for elections [later this year] but how ready are we to avoid such scenarios? We need to plan early otherwise we are in for big trouble," Kayondo cautioned.
The MTIC Commissioner Internal Trade, Raymond Agaba, said the objective of the meeting was to consult and find ways of addressing challenges of Non Tariff Barriers (NTBs) along the transit routes.
The Assistant Commissioner External Trade, Patrick Okilangole, said in order for traders to maximize profits, they have to minimize risks. "The whole concept is based on risks and opportunities," Okilangole said.