By Bird Story Agency
Saturday July 30, 2022
An aerial view of a section of the Port of Mombasa. Kevin Odit | Nation
What you need to know:
- Kenya’s Mombasa port, the largest and busiest in the region,
is facing tough competition from ports at Berbera in Somaliland, Dar es Salaam
in Tanzania and Maputo in Mozambique as the battle for trade along East
Africa’s “Swahili Coast” heats up.
Tanzania, Somaliland and Mozambique are investing heavily in
expanding and rehabilitating existing ports as they roll out newer facilities
in a race to become the most preferred trade gateways in East Africa.
Kenya’s Mombasa Port, on the other hand - the largest and busiest facility in East
Africa - is experiencing lower investor activity as delays, congestion and poor
management impact operations, according to GBS Africa, a UK-based consultancy
firm, in its Africa Ports Report 2022.
The investments being made to upgrade port infrastructure
elsewhere in the region are increasing the vibrancy and diversity of East
African trade routes, but also piling pressure on Mombasa Port to up its game.
“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
constructed to diversify regional trade and shipping routes,” according to the
Even Kenya’s recently commissioned Lamu Port is tipped to
give Mombasa a run for its money.
“If Mombasa does not soon attract fresh investment, it will
lose its ranking to Chinese-operated Lamu port and other regional facilities,”
said GBS Africa.
The World Bank’s global Container Port Performance Index
(CPPI) 2021, ranks the Port of Mombasa at position 293 and Dar es Salaam at
position 362, out of a total 370, with the low rankings linked to delays,
congestion and mismanagement of the facilities.
The regional upstart is the Port of Berbera, in Somaliland.
Since 2016, the port has benefitted from 442 million US
dollars in investments, following an agreement signed between the government of
Somaliland and Emirati multinational logistics company, DP World.
When complete, the Port of Berbera is expected to handle up
to 3 million twenty-foot equivalent units (TEU) annually, triple the current capacity of regional
heavyweight Djibouti, which has a capacity of one million TEU annually. By
2050, Berbera is projected to handle 18.1 million tons of cargo.
Ethiopia is among the strategic investors in the port and
has committed to developing infrastructure to build what is known as the
Berbera Corridor into a major regional trade gateway, thereby offering
land-linked Ethiopia with the option to diversify its supply lines away from
Djibouti’s congested port.
In 2021, Tigrayan rebels disrupted supply lines to Djibouti,
pushing the Ethiopian government to speed up the development of alternative
trade routes - with Berbera and Eritrea’s ports of Assab and Massawa emerging
as top options. A deal with Eritrea is yet to materialise. Djibouti currently
handles up to 95 percent of all of Ethiopia’s inbound trade, according to the report.
“The revamped port of Berbera now offers an alternative to
Djibouti as a gateway to lucrative trade routes through the Suez Canal,” read
the report in part.
The report describes Somaliland's port as a
"game-changer" for the Horn of Africa country that to date has hardly
been recognised on the international trade scene. By 2035, the report projects
the Port of Berbera to facilitate trade with a value equivalent to nearly 27
percent of Somaliland's GDP and to be responsible for 75 percent of its total
Djibouti and Somalia, as well as Somalia's other
semi-autonomous region of Puntland (with a port at Bosaso). have also signed up
investment partners from the United Kingdom and the United Arab Emirates to
breathe fresh life into their ports as the region emerges from civil strife.
Apart from the UAE’s DP World investments in the port of
Berbera in Somaliland, the firm is also linked with the development of the Port
of Bosaso in Puntland, while Turkey’s Albayrak is investing in Somalia's port
Tanzanian ports have also in the recent past mounted an
aggressive campaign to become gateways to Uganda, Burundi, the Democratic
Republic of Congo and Rwanda (previously all served by the Port of Mombasa)
through increased investment and new operations.
Last year, Tanzania began negotiating with China Merchant
Holdings (CMH) to build the 10 billion US dollar Bagamoyo port project, which
would see Tanzania open the largest port in East Africa, with a 20 million TEU
container capacity. However, the project has been hit by delays over
Environmental, Social, and Governance (ESG) concerns.
Meanwhile, Tanzania's Port of Dar es Salaam is also upping
its game, offering faster and more cost-effective trade and transport solutions
to address similar challenges to those facing Mombasa Port.
“Although it is smaller than Durban and Maputo, Dar es Salaam
is fast catching up on the market share of the Port of Mombasa for Indian Ocean
commerce and trade,” said GBS in the report.
Dar es Salaam's port, currently able to handle more than 10
million tonnes of cargo annually will soon have higher capacity thanks to an
ongoing expansion programme estimated to cost over 400 million US dollars.
The report says that thanks to increased efficiencies, Dar
es Salaam is increasingly becoming a top choice for land-linked countries like
the Democratic Republic of Congo, Malawi, Uganda, Zambia, Rwanda, and Zimbabwe.
The port is becoming a regional transhipment hub for soft
commodity exports, such as tea, coffee, tobacco, oilseeds, cotton, sisal, and
cashew nuts, as well as metals like copper.
In Mozambique, a gas-fuelled economic boom is creating fresh
demand for shipping services. As a result, the five seaports of Maputo, Beira,
Nacala, Quelimane, and Pemba are all undergoing expansion and rehabilitation.
In 2021, Maputo, the country’s largest port, posted a new
high growth record of 21 percent, handling 22.2 million tonnes of cargo, from
18.3 million tonnes in 2020. The increase has been credited to increased
foreign investor activities.
“Maputo port’s operations are managed by a highly successful
joint venture between the local government, and South African and UAE
companies,” said the report.
DP World’s involvement across major ports in the region is
heavily entrenched as it emerges as a key player, even though planned
investments have been in some quarters politicised and framed as