Mombasa port still underutilised – experts

Cargo containers at Mombasa port in Kenya. Mombasa Port has recorded a container growth 14.3 per cent. Of this, 75 per cent of the transit traffic is destined for Uganda. Photo by Ismail Musa Ladu 

In Summary

Since 2015, transit traffic cleared through Mombasa port has witnessed a growth of 6.5 per cent per cent. But why hasn’t Mombasa Port transformed Uganda plus other regional economies tangibly, considering it is the main gateway to the sea for the Northern and Central Corridors?

By Ismail Musa Ladu

The importance of Mombasa Port to Uganda’s import and export trade cannot be underestimated.
On a normal day, you will find large vessels operated by top shipping lines loading and unloading cargo that is critical to Uganda’s economic development.

In an interview with economists, it became obvious that without Mombasa Port – the gateway to East African markets, import and export trade would be troublesome.

UGANDA BIGGEST CLIENT
According to the Kenya Ports Authority 2018 report, Uganda is the leading user of the Port of Mombasa in terms of transit cargo, covering about 82 per cent of all imports and exports.

Since 2015, transit traffic cleared through the port has witnessed a growth of 6.5 per cent per cent.

According to Trade Minister Amelia Anne Kyambadde, Mombasa Port has recorded a container growth 14.3 per cent. Of this, 75 per cent of the transit traffic is destined for the Ugandan market, making Uganda the second largest user of the Port after Kenya.

But why hasn’t Mombasa Port transformed Uganda plus other regional economies tangibly, considering it is the main gateway to the sea for the Northern and Central Corridor, covering the Uganda, Kenya, Rwanda, Burundi, Tanzania, South Sudan and even the Democratic Republic of Congo (DRC)?

Currently, whatever happens in Kenya has a direct impact on all East African countries, Uganda inclusive. This is so because Uganda like other regional countries save for Tanzania, are land locked, meaning they do not have a sea port.

Government of Kenya has since instituted some reforms and infrastructural developments at the Port of Mombasa. But all the regional countries, including Kenya, whose economic survival largely depends on the Mombasa Port, are still regarded as third world countries.

According to economists, a third world country is a developing nation that is characterised by poverty and a low standard of living for most of its population. The term ‘developing country’ is also a preferred term when referring to economically developing nations.

At the Third Trade and Business Facilitation Symposium, one of the biggest worries that emerged was the underutilisation of Mombasa Port in terms of the regional exports that go through the facility.

In his remarks, the Consul General, Uganda Consulate in Mombasa, Amb. Tayebwa Katureebe, remarked: “About 75 per cent of consignments that pass through Mombasa Port are imports. We must find a way of increasing our exports to make full use of the facility.”

He continued: “There is no country in the world that has developed with just imports alone. We must do better with this facility and we must understand the strategic importance of this port.”

As for Uganda’s Consul-General in Guangzhou, Amb. Solomon Rutega, there is lack of proper knowledge about export destinations, citing the Chinese market as one of the most lucrative export markets but hard to penetrate without proper research.

As a country and region, there is a disturbing trade imbalance with China. Whereas Chinese imports, mainly through Mombasa Port easily find their way into the domestic market, the same cannot be said of products from the region to China. Uganda is still grappling to secure just one per cent of the Chinese market yet Uganda’s market is 100 per cent flooded with Chinese goods.

To Amb. Rutega, research comes in handy. He said: “Chinese consumers are generally price sensitive. If you are an exporter looking to export to China, you must know this or else it will be difficult for you to compete there.”

He also advised evaluating partnerships and contracts with Chinese since each word has about four meanings in “Chinese” (Mandarin).

The Chinese, he said, are also keen on food safety standards and are easily attracted to quality packaging and branding.

All that put together, including marketing yourself well, could open export doors which in turn may result into a trade balance between the two.

Problem
The problem, however, is the consistency both in quality and quantity of supplies. And this, according to Uganda’s Ambassador to UAE Kibedi Zaake is one of the leading problem explaining underutilization of Mombasa Port, resulting to trade imbalances.

Already, he is organising a forum to further this discussion as well as sought out ways to cement remittances coming from UAE to Uganda as well as increase export to the gulf country.

Under the theme: “Enhancing Trade Facilitation along the Northern corridor,” Ms Kyambadde said the main Port connecting the hinterland to international markets, should go down in history as a place where recommitments to deal with existing and emerging challenges faced in the export and import trade were renewed.

She said: “In East Africa, logistics bottlenecks and inefficiencies are present at multiple stages in the supply chain including; loading, delivery and warehousing, packaging and waste management. Traffic congestion along key transport corridors, roadblocks and checkpoints push up time and costs of logistics which are passed onto the shippers and eventually borne by the consumers. The results of these inefficiencies are high logistical costs.”

Possible solutions
In his presentation, the senior director, trade environment at Trade Mark East Africa, Mr Alban Odhiambo, said information technology can create an infrastructure that facilitates exports in addition being vibrant, transparent and reliable. Already he revealed an ICT system that will document export processes of flowers to The Netherland has been created and is ready for experimentation. Plans are also underway to experiment with coffee in Uganda.

If this is done properly, Non-Tariff Barriers affecting export trade would be something of the past; thus, open up Mombasa Port for two way traffic—export and import.

Uganda Export Promotion Board’s senior export marketing executive Brenda Opus said commercial diplomacy is key just as provision of market information, packaging and all related details pertaining to exports.

Imports and exports
Inefficiencies in logistics
Quoting National Logistics Platform (NLP) statistic, she continued: “In Uganda, logistics inefficiencies in import and export of goods are estimated to cost $827 million (about Shs3.1 trillion) each year and logistics costs account for 18- to 20 per cent of the price of goods in Uganda.”

In his speech at the Symposium held in Mombasa, the Permanent Secretary, Ministry Of Foreign Affairs, Ambassador Patrick S. Mugoya, urged regional countries, Uganda inclusive, to use Mombasa Port for more regional exports.

But for that to happen, Uganda, he said, has taken a practical approach to the way business should be done.

He said: “In Uganda, we have had a paradigm shift in our approach to foreign policy. Whereas we believe that peace and security are important; we also hold the strong view that to sustain peace, there is need to create a nexus between peace, security and development.”

Other solutions
Mr Moses Ogwal, the director Private Sector Development, made a case for exports enablers such as affordable financing, tailor-made insurance and coordinated transport system fixed. With all that in place, he believes there will be no reason why private sector will not be lured into exporting, turning Mombasa Port into a busier export facility.

To improve exports, government, the East African Community and the Northern Corridor integration projects, plus support from development partners, such as TradeMark East Africa, E- Single Window was established.

This is aimed at facilitating trade through hastening export and import clearances. As a result, there has been reduction of clearance time from 11 days to five, real time notifications sent to clients at each stage of transaction processing and reduced time clearance for agencies using the E-Single Window System.

This is in addition to the e-trade Portal - a One Stop Portal for export, import and transit information.

There is also Electronic Cargo Tracking System, launched in 2014. It has so far enabled real-time monitoring of goods in transit to curb rampant diversion of transit goods.