Business

Report: Kenya lags behind, yet to tap maritime potential

Tuesday, October 12th, 2021 00:00 | By
Ship in the ocean.

SHIPPING:  Kenya is lagging behind regional peers in tapping international shipping industry, performing at just 17  per cent of its potential compared to other African nations, a UN quarterly report shows. 

Liner Shipping Connectivity Index, which captures how well countries are connected to global shipping networks, has assigned Kenya 16 per cent connectivity compared to South Africa’s 39 per cent, Nigeria’s 22 per cent and 69 per cent for Morocco.

Tanzania’s shipping sector is operating at 15 per cent of its potential, according to the study.

The index shows that in the third quarter of 2021 Kenya scored 17.24 per cent compared to 17.16 per cent at the same period last year.

Transport sector

It is computed by the United Nations Conference on Trade and Development (UNCTAD) based on five components of the maritime transport sector.

The components are number of ships, their container-carrying capacity, maximum vessel size, number of services, and number of companies that deploy container ships in a country’s ports,” says the report.

Kenya’s performance has averaged at 17 per cent since 2015, showing minimal improvement over the years.

Port of Mombasa handled 9.54 million tonnes in the first quarter of the year 2021 compared to 8.62 million tonnes in a similar period last year, recording 10.7 per cent growth rate.

The port has immense potential since its hinterland reaches as far as Eastern Democratic Republic of Congo to South Sudan and Ethiopia.

Kenya is banking on the completion of the Lamu Port and the Lapsset corridor to help tap into the Ethiopia, South Sudan hinterland. 

The country’s connectivity index has been affected by its low productivity, meaning that shipping activities are skewed towards importation rather than exportation hence fewer shippings are originating their journeys from Mombasa.

Kenya’s ranking is also affected by very low to non-existent ship ownership. Which inturn reduces the volume of ships plying the local ports especially among African ports. 

The cost of shipping to Eastern Africa ports is also expensive due to the low volumes imported and distance from the exporting economies in Asia and Europe.

The leading countries in shipping connectivity include South Korea, Malaysia, Japan, United States, UK and others.

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