Sabahi (Washington, DC)

7 January 2013

Tanzania: Revenue Surges At Dar es Salaam Port Following Suspensions

Photo: The East African
Port of Tanzania: Five top port officials have been sacked for alleged corruption.

Dar es Salaam — The Tanzania Ports Authority (TPA) increased revenue collection at the port of Dar es Salaam from 28 billion in November to 50 billion shillings ($18 million to $31 million) in December, following the suspension of 16 port officers accused of improper conduct.

The port officers, including high ranking directors, were suspended in December after the Ministry of Transportation launched an internal investigation responding to customer complaints about delays at the port, according to Transportation Minister Harrison Mwakyembe.

At least six other port officials were suspended in August. The investigation, which is still ongoing, found port employees were diverting business from the port to small clearing companies that they own, a direct violation of their employment contract.

"Customers were running away from our port because of intentional delays by unscrupulous employees who increased the cost of doing business," Mwakyembe told Sabahi. "This was contrary to their employment contracts and had direct conflicts of interest with their employer [the government]."

Among the high-level suspended port officials are TPA Director General Ephraim Mgawe, Director of Planning Florence Nkya, Director of Engineering Bakari Kilo, Director of Management Systems Maimuna Mrisho, Information and Communication Technology Director Ayub Kamili, Deputy Director General Hamad Koshyuma, Deputy Director General Julius Fuko, and Port Manager Cassian Ng'amilo.

Official charges have not yet been filed against the suspended officials and they have not publicly responded to any of the allegations. Mwakyembe said the TPA Board of Directors would soon convene to make a final decision regarding their employment status.

Normally, cargo clearing and forwarding companies charge 640,000 shillings ($400) to clear a 20- to 40-foot container from the port in seven days. Containers that are not cleared within that allotted time are charged extra.

Mwakyembe said customers complained that clearing a container at the port of Dar es Salaam had been taking up to eight weeks, while it would only take seven days at the Mombasa port in Kenya.

Customers want goods to be cleared from the port in the shortest time possible, Mwakyembe said, and when there is a delay at the Dar es Salaam port, they switch their goods to other ports, which caused the government of Tanzania to lose revenue.

Mwakyembe said the private companies belonging to the officials have since been suspended and business has returned to the port, contributing to the December revenue increase.

Import-export companies welcome reforms

Vincent Nyerere, who owns an import company, welcomed the suspension of the port officials, but said more needs to be done to improve business at the port, as it still moves slowly.

He said he imported four containers from China in November -- two processed through the port of Mombasa and two through Dar es Salaam. The containers that went through Mombasa were cleared within nine days, while those that went through Dar es Salaam were still stuck at the Dar es Salaam port as of January 7th.

"My target was to sell goods the week between Christmas and New Year, but now if I get those goods what do I do with them?" he told Sabahi. "The [Dar es Salaam] port has effectively killed my business."

Nyerere said if the port was disciplined and more efficient, it could generate up to 100 billion shillings ($63 million) a month in revenue.

Haron Ishimwabula, whose import-export company services Rwanda, Burundi, the Democratic Republic of the Congo, Malawi and Zambia, said that because of inefficiencies at the Dar es Salaam port, he uses the Mombasa port to clear goods quickly even though it increases his cost of doing business.

Economist Benson Mahenya, director of Andrew's Consulting Group, said the government is losing a lot of revenue to competing ports in the region. Due to its strategic location, the port could generate up to 60% of the national budget, he told Sabahi, but because of inefficiencies its revenue potential is not maximised.

Mahenya welcomed Mwakyembe's move to improve the port's performance and urged everyone to support reforms aimed at eliminating corruption.

However, he said the transportation system at the port also needs improvement. For example, instead of using trucks, the railway system should be revived for bulk cargo and faster transportation of goods from the port, Mahenya said.

Mwakyembe said performance reviews at the port are ongoing and his ministry would continue to examine ways to improve efficiency. He said the ministry is considering operating the port on a 24-hour basis to clear the backlog of containers that need to be processed.

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