Congestion at Mombasa port, a key gateway not only for Kenya but for other East African countries,
remained an issue of concern throughout 2007. A survey carried out by the Kenya Ports Authority (KPA)
published in August showed that containers destined for Kenya itself and for neighbouring Uganda
contributed most to the congestion problem. Kenya-destination boxes were found to have an average
dwell-time in the port of 23 days. The port was found to contain a total of 15,641 containers, 3,027 more
than its official capacity of 12,614. Containers were stacked up to three high and there was an overflow
with a number stacked outside the terminal itself. The KPA team that carried out the survey said that
congestion could be reduced if there were more railway wagons and a more efficient off-take onto the
Kenya-Uganda railway. We are optimistic that KPA can continue its recovery from years of debt, underinvestment
and congestion. In our latest Kenya Freight Transport Report, BMI concludes that maritime
freight volume is set to accelerate further to expand by an annual average of 11.5% in the 2007-2011
forecast period.
Various factors support this prediction. We now expect average GDP growth of 6.1% a year over the next
five years, which will underpin demand for freight. International trade will grow at a higher 9.3% rate
over the same period. Kenya’s ports are of course an important conduit for freight transit to neighbouring
East African countries, and this too will boost demand. A further factor is the likely improvement of
hinterland transport links, particularly now that the combined concessioning of the Kenyan and Ugandan
railway companies to the Rift Valley Railways (RVR) consortium has been completed.
Prospects are also encouraging for recovery in wider freight business. Road freight will continue to be the
favoured mode of land transport. We are predicting that annual volume will grow by an average of 8.5%
in the 2007-2011 period. Rail freight, plagued by under-investment, has contracted, and it will take some
time after the completion of the concessioning process before any kind of strong recovery is likely. We
are forecasting average annual growth of 5.7% in tonnage. Air freight is likely to perform dynamically
with expected annual growth of 12.5%. In the overall Middle East and Africa (MEA) business
environment matrix, Kenya currently scores 36, an improvement on last year but still below the regional
average of 39.8. The country has below average scores in a number of categories including political and
economic risk and in its development and support of infrastructure. However, Kenya manages to score
close to the regional average in terms of its regulatory and competitive environments, largely because it
has made some progress in adopting air safety standards and has been forced to seek private sector
involvement in key transport sub-sectors, particularly air shipments.
For the 2007-2011 forecast period, we expect Kenya’s transport and communications sector to continue
outpacing the economy as a whole. It will achieve average annual growth of 6.6% in value terms, versus
6.1% for overall GDP. The total value of transport and communications GDP will rise to US$3.94bn in
nominal terms by 2011, representing 8.1% of Kenya’s GDP. The transport and communications sector
employed 94,000 people, or 5.0% of the labour force, last year. We see that figure rising to 104,000 by
2011, while remaining proportionately constant at 5% of the total.
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