THE Dar es Salaam Port serves the growing economies of Burundi, Democratic Republic of Congo (DRC), Rwanda, Uganda, Zimbabwe and Zambia.
These economies are said to fuel the port’s 14 per cent annual growth, but also caused congestion due to limited working area.
The port is currently ranked second biggest in East Africa and fourth largest container port on Africa’s eastern seaboard after Djibouti, Durban, and Mombasa.
Tanzania Port Authority (TPA), has undertaken an ambitious expansion project dubbed the Dar es Salaam Maritime Gateway Project to modernize and improve its service. However, the port growth that had experienced in recently years and ambitious expansion project might not materialise if a number of issues are not addressed.
The first is the introduction of Value Added Tax (VAT), on transit goods for land locked countries which although it has not yet been enforced, it seems to have scared some port users from those countries.
Dar es Salaam’s acting Port Manager, Hebel Mhanga said, for instance Zambia total cargo traffic in the first two months of this year, dropped by 47.6 per cent to 121 in comparison to the same period last year. In 2015, Dar port moved 1.9 million tonnes of Zambia’s cargo.
This was equivalent to 34 per cent of potential business of 5.6 million tonnes to and from Lusaka. The figure makes Zambia the biggest Dar port user. “Thought VAT is yet to be enforced, it has scared importers to the extent they are using alternative ports in the region,” Mr Mhanga said.
VAT was supposed to start in 2015/16 fiscal year. TRA has yet to impose the law but its spiral effect sprung to the entire Dar port users.
Mr Mhanga said copper cargo volumes from Zambia might decline further as most of the agreements are coming to an end.
“These mining firms are likely to use ports around us, which do not impose VAT on transit goods, despite intense negotiation. Unless the VAT is scraped off the books,” Mr Mhanga said.
Zambia export traffic through Dar port has gone down by 5.9 per cent in between January and February this year.
“We expected that DRC-Congo traffic through our port will overtake Zambia this year. Our expectations have been defeated by VAT,” Mr Mhanga said.
However, he also said DR-Congo cargo also declined due to the introduction of single customer territory as it work against Congolese traders who enjoyed to negotiating taxes with their authorities. Congo traffic for import went down by 19.7 per cent while export dropped by 13.3 per cent between January and February against same period last year.
“To DR-Congo the single custom was plus as it maximizes tax collection but for traders it translate to profit loss…they opt to use other ports in the region…its is as if we have lost 50 per cent of business,” Mhanga said.
In the same period Dar port lost 78.2 per cent of Uganda business and 36.4 per cent of Malawi business as well due to VAT scare and poor road and railway infrastructures.
The Malawi decided to use Beira Port, which in recently days has been well connected by a standard gauge railway to reduce transit time to two days which make it cheaper compared to the Dar route.
The Tanzania Port Authority (TPA), Director of Marketing, Ms Francisca Muindi said Dar port was currently facing a cut throat competition from other ports in southern Africa. There is urgent need to strengthen the railway infrastructure to win back business, she said.
“For instance Zambia traffic, mainly copper, went down from 65 to 15 per cent…,” Ms Muindi said. She said Tanroad regulation to bar link-trailers to travel on Tanzania roads had worsened the matter. Most of copper miners use these link-trailers to transport copper.
Success of Dar es Salaam Marine Gateway Project would not materialised without a standard railway line to improve the port’s rail hinterland connectivity and allow it move to clear cargo faster, she said.
On top of that expansion of Kilwa, Mandela, and Nyerere, roads to dual three-lane standard is of paramount importance, she said.
These three roads will allow the introduction of a one-way traffic-flow system at the port and increase truck turnaround.
The Kisarawe ICD is also an important project. But the project has been on the drawing board for a decade plus.
Without addressing these issues, the geographic competitive and the growth Dar port enjoys will be the thing of the past very soon.
Source: Daily News

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