Mombasa Port: New Problems

Exporters lose out as Mombasa port congestion intensifies in recent months

Afresh pile-up of cargo at the port of Mombasa is causing anxiety among exporters as delays in clearance put orders worth millions of dollars at stake. Traders said a flood of uncollected containers has jammed the facility, with slow clearance by Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) adding to their losses.

“The port is overwhelmed by imports. Some of the containers prepared for the export market four months back are still lying there,” said Peter Kimanga, chairman of the East African Tea Trade Association. As a result, buyers of Kenya’s tea in Pakistan were opting for orders from Sri Lanka, India and Bangladesh.

“This is the industry’s (tea) peak season yet local producers cannot benefit from high global prices because of slow clearance at the port,” Kimanga said of Kenya’s top foreign exchange earner which raked in more than Sh100 billion in 2012.

“The ships meant to dock at Mombasa port are forced to bypass the facility to dock at other ports due to clearance headache,” Kimanga said, adding that breakdown in electronic link between KRA and KPA was responsible for the delay.

“These agencies are not sincere when all they do is to blame others for their systems failure because their electronic system is operating at 40 per cent of expected capacity,” said Gilbert Langat, CEO of Kenya Shippers Council.

Officials of both the port and KRA have denied fault. “Our ICT system is managed centrally and every hitch is brought to our attention,” said Kennedy Onyonyi, in charge of marketing and communication at KRA.

KPA said that cargo owners are behind the delays, adding that it recently announced punitive measures will bring order at the facility.

The port delays highlight the soaring of imports (mainly oil and food items) which widened the country’s current account to 10 per cent of GPD last year – higher than Greece’s according to World Bank Group.
To ordinary citizens, the adverse impact of this gap between imports and exports hit the local market in October last year when shilling deteriorated to Sh107 against the dollar.

“Kenya’s export performance is poor due to a number of factors, including inefficiencies at the port of Mombasa, inadequate and expensive supply of energy,” the World Bank said in its 2011 end-year assessment.

KPA has threatened to levy punitive charges on cargo owners who fail to collect 10,000 containers within the stipulated 21 days period. Cargo owners who have piled up cleared containers will be surcharged $30 per day on every 20-foot container if it remains in the port days after the official deadline and $45 per day after 25 days.

The shippers council had asked KPA to publish the names of the owners of uncollected cargo if it was serious, but Langat says nothing came out of it.

“It is not fair to just complain and issue threats to faceless cargo owners when you have the power to seize and even auction unclaimed containers,” said Langat, adding that apart from a few connected individuals who have managed to turn the port into a temporary storage yard, the delay is mainly caused by KRA and KPA.

Apart from Kenya, Mombasa is a critical nerve centre for commerce in Africa, linking landlocked countries of Rwanda, Burundi, Uganda, DRC and Southern Sudan to the rest of the world.

This means that every second of delay quickly translates to a loss big enough to be felt across the entire Great Lakes region. Experts have pointed out that Mombasa port can only be efficient once there is a good network of roads and efficient railway transport that match the influx of imports and exports.