Prioritisation of investment in Tanzania’s ports key to growth

The rise of Dar es Salaam as a key business hub in the East African economic bloc is now challenging Kenya’s dominance in ports business, as Tanzania now attracts more investments in shipping and logistics.

This is according to a new report, East African Ports Competition over Indian Ocean Trade Market Share, released recently by GBS Africa, an African-led advisory firm supporting flows of trade and investment in Africa, that looks at the future of trade across ports located in the Indian Ocean.

Tanzania, the survey reveals, has created a business environment in its Dar es Salaam port that is faster and more cost-effective compared to Kenya’s Mombasa port and is now expanding its operations to accommodate more cargo and customers.

“Landlocked countries such as the Democratic Republic of Congo (DRC), Malawi, Uganda, Zambia, Rwanda and Zimbabwe are increasingly choosing Dar es Salaam over Mombasa due to the latter’s congestion problems,” the study says.

It adds that the ongoing expansion plan will cost $421 million. Currently, the port handles more than 11 million tonnes of cargo annually of which  6 million tonnes is liquid bulk, 4 million tonnes is dry cargo and 1 million tonnes is containers.

Other ports are Tanga and Mtwara.

According to the 2020 Africa Port: Fast-tracking Transformation report, Africa’s rising ports are Lagos, Dar es Salaam, Mombasa and Cape Town. But for Dar es Salaam to give Mombasa a run for its money, it will have to work harder to meet Kenya’s cargo dwell-time of five days, the second best performing in Africa after Durban’s four days.  But enlarging the Dar port could move it closer to Mombasa’s cargo handling capacity of 63.5 million tonnes.

Contrary to recent media reports that DP World, the Dubai-based cargo logistics company handling most of the cargo in the Indian Ocean, has entered into port deals with Kenya, The Citizen has confirmed that the company has not signed any agreement nor started formal engagements with Kenyan authorities.  

The GBS report warns that if Kenya does not urgently find investors to diverse business in its Mombasa port, it could lose business to newer and improved ports that are becoming more attractive to shipping companies.

Managing partner of GBS Agnes Gitau notes that for the African continent to be fully integrated  and for the vision of the Africa Continental Free Trade Area (Afcfta) to be realized there is need to invest in Africa’s ports.

“This will facilitate ease of movement of goods and services. It is therefore important to have predictable policies to attract investments in this sector,” she said.