Kenya shrugs off growing competition for Ethiopian cargo

A ship docks in Mombasa. Kenya is eyeing more Ethiopian goods to pass through its ports. PHOTO | FILE 

By KIARIE NJOROGE

The government has downplayed concerns that Ethiopia’s growing interest in the port of Berbera could affect a new gateway currently being constructed in Lamu.

Ethiopia wants to start handling a significant amount of cargo through the port which is in the capital of the semi-autonomous Somaliland, signalling more competition for Lamu.

Ethiopia relies almost entirely on the Port of Djibouti and is keen to secure an alternative route as its economy expands. Lapsset Corridor Development Authority Director General Silvester Kasuku on Tuesday said most of the regional ports are too small and that Lamu could handle bigger ships.

“The studies that we have undertaken indicate that there is a level to which Berbera Port remains in business and there is a level at which the Lamu Port also remains in business—and they complement each other,” he said.

“They each have what we call the effective demand corridor length and they have a meeting point beyond which each of them does not interfere with one another.”

Ethiopian cargo is a significant part of the development of the Lamu Port and failure to secure this could render the project less competitive.

“Five to 10 per cent of the country’s imports are planned to come through the port of Berbera, and we will be looking for proper ports for different areas of the country,” Workineh Gebeyehu, Ethiopia’s minister of Transport said earlier thsi year.

The Port of Djibouti is also being expanded at a cost of $9.5 billion to handle more traffic.

Mr Kasuku said hey were also looking at the expected growth in manufacturing in Africa to offer more logistical business. As factory wages rise in China, Africa is being seen as the next global manufacturing hub and it is expected that more multinationals will shift their operations to the continent.

“New ports like Lamu bring into play fresh port dynamics on the continent to handle transhipments and to handle large post-panamax ships.”

Other regional ports that will pose competition to Lamu include Mombasa Port, Dar es Salaam, the proposed Bagamoyo Port and Port Sudan.

Lamu Port is the anchor facility for the Lapsset project that seeks to create a logistical corridor from the port to South Sudan and Ethiopia.