An ongoing privatization of berths and cargo handling at the port of Mombasa will pass through lower transactional costs to consumer goods imported once complete in under a year.

The resulting efficiency will also boost margins of goods exported via the port, according to TradeMark Africa, a non-profit organisation helping in the ongoing East African Community integration process.

The over 25 private and public agencies from across the EAC bloc involved in the Northern Corridor Integration Projects have set 2016 as the deadline for privatisation of services – berths and stevedoring – at the port.

A landlord port will result, with the Kenya Ports Authority retaining the regulatory and oversight roles. This will complete a process begun in 1996 but was derailed by politics.

Delayed cargo clearance, red-tape when moving goods to the hinterland and poor infrastructure are cited as spiking costs of goods by over 40 per cent – way above the global standard of up to five per cent.

“If goods are shipped to regional countries, the freight costs actually goes up by 45 per cent. If we achieve the targets, then this cost could be reduced to below 10 per cent,” said Frank Matsaert, TradeMark Africa (TMA) ’s chief executive.

The companies signed a Mombasa Port Community Charter on Monday in a renewed bid to ramp up efficiency. They target to raise the average distance covered by cargo trucks in a year to 120,000 kilometres from the current 70,000km. The share of rail cargo from the interior will also be shored up to 35 per cent of the port’s throughput from less than 10 per cent currently.

Carole Kariuki, chief executive of the Kenya Private Sector Alliance, said improved efficiency at the port could easily add 0.5 per cent to the country’s GDP by doubling annual trade volumes.

“We will not rest till we hit our target to be the preferred port of entry along the Eastern Africa coast of Indian Ocean,” Kariuki said.

“This will also boost job creation especially in agribusiness, wholesale and retail, banking, real estate and construction sectors.”

Source: The Star

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.