East African port competition is heating up.
- Published By Dickens Omollo For The Statesman Digital
- 2 years ago
Tanzania, Somaliland, and Mozambique are investing heavily in expanding and rehabilitating existing ports, as well as building newer facilities, in an effort to become East Africa's preferred trade gateways.
According to GBS Africa, a UK-based consultancy firm, in its Africa Ports Report 2022, Kenya's Mombasa Port, the largest and busiest facility in East Africa, is experiencing lower investor activity as delays, congestion, and poor management impact operations.
The investments being made to upgrade port infrastructure throughout the region are increasing the vibrancy and diversity of East African trade routes, but they are also putting pressure on Mombasa Port to perform better.
According to the report, "the traditional dominance of the Port of Mombasa is being challenged by other regional facilities that are attracting more investment and are less resistant to reform, while entirely new deep-water seaports are being built to diversify regional trade and shipping routes."
Even Kenya's recently opened Lamu Port is expected to compete with Mombasa.
"If Mombasa does not attract new investment soon," said GBS Africa, "it will lose its ranking to the Chinese-operated Lamu port and other regional facilities."
According to the World Bank's global Container Port Performance Index (CPPI) 2021, the Port of Mombasa is ranked 293rd and Dar es Salaam is ranked 362nd out of 370, with the low rankings attributed to delays, congestion, and mismanagement.
The Port of Berbera in Somaliland is a regional upstart.
Following an agreement signed between the government of Somaliland and the Emirati multinational logistics company, DP World, the port has benefited from 442 million US dollars in investments since 2016.
When completed, the Port of Berbera will be able to handle up to 3 million twenty-foot equivalent units (TEU) per year, more than tripling the current capacity of regional heavyweight Djibouti, which is limited to one million TEU per year. Berbera is expected to handle 18.1 million tons of cargo by 2050.
A gas-fueled economic boom in Mozambique is generating new demand for shipping services. As a result, the five seaports of Maputo, Beira, Nacala, Quelimane, and Pemba are all expanding and being renovated.
Maputo, the country's largest port, set a new 21 percent growth record in 2021, handling 22.2 million tonnes of cargo, up from 18.3 million tonnes in 2020. Increased foreign investor activity has been attributed to the increase.
Meanwhile, Tanzania's Port of Dar es Salaam is stepping up its game, offering faster and more cost-effective trade and transportation solutions to address similar issues as Mombasa Port.
Dar es Salaam's port, which currently handles more than 10 million tonnes of cargo per year, will soon have increased capacity thanks to a $400 million US dollar expansion program.
According to the report, Dar es Salaam is increasingly becoming a top choice for land-linked countries such as the Democratic Republic of the Congo, Malawi, Uganda, Zambia, Rwanda, and Zimbabwe due to increased efficiencies.
The port is growing in importance as a regional transhipment hub for soft commodity exports such as tea, coffee, tobacco, oilseeds, cotton, sisal, and cashew nuts, as well as metals such as copper.
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