The Mutual Benefit of Streamlined Mombasa Port Operations and Uganda Import Trade

Being a landlocked country, Uganda depends on her regional neighbours, Kenya and Tanzania having coastlines to transact foreign trade. However, the Kenyan port of Mombasa stands out as the major hub for foreign trade and any trade policies enacted must focus on promotion and enhancement of the mutual benefits of the two countries. These policies need to progressively address the emerging challenges of modern business. The cost of handling cargo, the time spent on clearing, logistical hiccups at the port, storage and safety of cargo, transport and the statutory taxes and penalties.

The seamless operations and mechanisms to address any emerging challenges, whether at a policy or operational level is beneficial to both.

Uganda’s trade volume amounts to 83% of the cargo transited through Mombasa port to other East African member states. Traders have faced great challenges to clear their cargo due to logistical challenges arising from huge volumes of cargo to handle, failure to clear taxes and charges in time by importers, resulting in penalties and accumulated demurrage.

This has adversely affected free flow of trade. The mandatory requirement to deposit $3000 for a container transiting to Uganda is a bit prohibitive; this would be covered in the transit insurance policy rather than a direct payment.

Importers face a $40 daily charge, 15 days from the time their goods reach Mombasa, besides the shipment deposit fees. This money is usually forfeited when the cargo is not cleared in time irrespective of whether the delay was occasioned by the port authority or failure by the importer to pay the requisite taxes, charges or penalties. It would only be fair to handle each on a case by case basis. It is unfair to penalize an importer for the logistical failure by the port Authority. It is commonplace that traders wait for weeks to have cargo cleared even after paying the requisite dues, thus raising demurrage, quality assurance issues, safety of cargo etc.

The existence of non-tariff barriers like a big number of weigh bridges , roadblocks and checkpoints, time taken to clear goods, lack of effective dispute resolution mechanisms etc. All this affects the easy flow of inter-regional trade. Even with improved regional infrastructure, internet connectivity, digitalization of operations, manual operations still take a large swathe of time to execute cargo conveyance. This eats into the man-hours spent. Automation should be emphasized to enhance efficiency.

Under the Northern corridor integrated projects, partner States were supposed to undertake infrastructure  development projects in a coordinated mechanism, like the construction of the standard gauge railway one network area, cooperation in air services and power generation. Not all these have been fully implemented. SGR was supposed to terminate into an inland port, that would ease pressure of congestion at Mombasa port, but its operations are not fully realized.

The previous regime had shifted cargo handling to both Nairobi and Kisumu, but it proved a very unpopular decision among the Mombasa residents and leadership. It was depriving them of jobs and taxes. The new Kenyan government under Dr William Ruto reversed the policy on purely political grounds, given that the coastal region is an important power centre in the political matrix of Kenya. Under the new port Authority management led by Cpt William Ruto Afni, there are radical policy proposals aimed at improving port operations. The policy that promotes the use of railway more than road transport, call for increased rate of cargo clearance, creation of a single billing system and one stop shop centre and automation. He has also ignited a debate on privatization of the port operations. This has led to gitters among the operators, stating that the new ownership maybe profit oriented, ignoring the social fabric of the current beneficiaries.

An expanded surface area at Mombasa port would solve the problem of congestion.

Therefore, resources must be devoted to a program focused on widening the berth, handling and clearing area. Modern international trade involves huge ships, necessitating need to upgrade the port facilities. This calls for a rigorous and ambitious program to meet the new emerging challenges of partner states like Uganda that is doing massive importation of equipment for the oil and petroleum sector.

In conclusion Mombasa port, is challenged to plan for East African partner states, but not only for Kenya given that most of machinery and equipment required for infrastructure development and normal trade transits through Mombasa