With about six weeks left for Kenyans to go to the polls, the
private sector in neighbouring states are now beginning to look at the
Dar es Salaam port as an alternative route to import and export goods.
Kenya’s
main port of Mombasa, which according latest reports, registered 11 per
cent cargo growth in the first quarter of 2017, serves Uganda, Rwanda,
Burundi, South Sudan and DR Congo.
Although much
preferred by the business community, the abrasions of the post-election
violence of 2007/8 are still fresh because of its adverse effect on
regional economies.
Uganda’s private sector is not
taking chances saying Dar es Salaam Port should permanently resume its
use. Private Sector Foundation of Uganda Gideon Badagawa executive
director hopes the elections will be calm and peaceful, adding that
Kenyan leaders and voters must have learnt their lessons from the 2007
experiences.
“We have seen both Raila and Uhuru commit
to peaceful elections and calling on their supporters to avoid violence.
Of course better said than done! We, nevertheless, are hopeful that the
environment for business shall not be much distorted,” he said.
Mr
Badagawa added Uganda needs to have ‘a plan B’. “It might be a good
idea to begin opening up and using the route through Dar es Salaam,” he
said.
Kampala City Traders Association spokesperson Issa Sekitto said goods, during this period, should go through the Central corridor.
Kampala City Traders Association spokesperson Issa Sekitto said goods, during this period, should go through the Central corridor.
Uganda’s leading export commodity, coffee, is transited through Mombasa Port and many exporters saw their stocks pile in 2007.
This
time round, coffee exporters are not taking a wait-and-see attitude due
to concerns about potential violence during the polls.
Mr
Joseph Nkandu, the executive director of National Union of Coffee
Agribusiness and Farm Enterprises, a farmers organisation involved in
the production and export of coffee, said the 2007 election violence in
Kenya was a big lesson to Kenyans and the land locked countries who
export and import goods through Kenya including Uganda.
“Definitely
this becomes more than an individual company to handle but rather a
country strategy. All of us as exporters and government of Uganda we
must join hands for plan B Tanzania,” Mr Nkandu told Daily Monitor.
He
admitted that although Dar es Salaam, over 1,700 kilometres, comes with
added costs of more than 20 per cent, it is less than diversion costs
in case violence erupts.
Using the Mombasa Port costs
about Ushs5.4 million ($1,500) to Ushs6.4 million ($1,800) for a 20 feet
container. This is less than Tanzania’s Ushs9 million ($2,500) and more
including more time in delays.
Overdue compensation
Ten
years down the road, traders are still waiting for compensation for the
losses they incurred. The 2007/8 post-election violence saw Ugandans’
properties worth about Ushs144 billion ($40 million) destroyed.
“In
fact if we had capacity we would make a project of telling everybody
about this injustice,” Mr Sekitto said. Commenting on this, Mr Badagawa
said unlike the Uchumi case, Kenyan authorities have tended to be
adamant.
“We continue to push government of Uganda to
push Kenyan authorities to make this good. They promised but have not
effected. These issues have been advanced to the EAC,” Mr Badagawa said.
He
advised the Ugandan business community to take insurance policies for
compensation in case violence breaks out and affects their businesses.
Ten
years ago, the Dar es Salaam port which commanded more than 30 per cent
of Uganda’s share of cargo, lost this market because of several handles
the route had such as poor roads and insecurity.
However,
the Tanzanian government, through its ports authority, has embarked on a
strategy to expand the port and also eliminates all the barriers in
order to regain their regional market share.
Port expansion
Tanzania
signed a Ushs554.4 billion ($154 million) port expansion contract with a
Chinese firm as part of plans to transform it into the region’s
transport and trade hub.
In
the 2017/18 budget proposal, Tanzania Finance minister Philip Mpango
scrapped value added tax on transit goods from its main ports.
The move is intended to win back importers from landlocked countries who saw this as an additional cost to their business.
Under
the port upgrade contract, which is funded by a World Bank loan,
Tanzania is planning to build a roll on/roll off (ro-ro) terminal and to
deepen seven existing berths in order to accommodate larger container
ships.
In an interview with Daily Monitor,
Tanzania Ports Authority director general Deus Kakoko at the sidelines
of the 8th Central Corridor Inter-State Ministers Meeting in Kampala,
said: “What was lacking was the transport systems and this is being
addressed to reduce the delays.
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