Is Privatization of East African Ports the Answer?

NEGOTIATIONS to have the ports of Mombasa and Dar-es-Salaam as regionally owned ports under the management of private players are in advanced stages.

This was disclosed by the Secretary General of East African Community Dr Richard Sezibera has revealed.

"I believe this move will create a competition bringing down further the cost of doing business in the region, which will in turn increase investment and economic growth," Sezibera said at the Secretary Generals Private sector CEO's forum in Kampala on Tuesday.

The move is geared towards enhancing the operation efficiency at the two ports which provide access to the sea to all the EAC member states and serves other neighbouring countries like South Sudan and Democratic Republic of Congo (DRC).

Early this year, Society for International Development (SID) made a survey on the two ports and come up with recommendation that the ports should be declared "East Africa hot zone" and given independence to ease their operation.

SID is an international network of individuals and organisations, founded in 1957 to promote social justice and foster democratic participation.

Based in Kenya, Mombasa Port is operated by Kenya Ports Authority which has always been criticised for the bureaucratic procedures and delays that hinder trade on the Northern Corridor.

The recent tour of the two ports by EAC ministers further confirmed that more trade barriers were still hampering business at Mombasa and Dar es Salaam.

However, the Mombasa port, according to traders, has more barriers, including the recent directive by Kenya Revenue Authority that all transit sugar and motor vehicle imports, whose capacity exceeds 2000cc, must pay a cash bond equivalent to the value of imported cargo or bank guarantee before leaving the port of Mombasa.

The bond which triggered protests has since been lifted.

Sezibera informed the CEOs that the Secretariat was following closely the issue of the introduction of cash bond at Mombasa Port and that the Government of Kenya had assured them that the current situation was not a government policy but just an administrative arrangement.

"We will continue working together with the Government of Kenya to remove this bond completely as we do for other Non Tariff Barriers (NTBs)," added Sezibera.

He urged the business community to get more involved with finding solutions to some of the bottlenecks of doing business in the region.

Fred Seka, a trader and vice chairman of Freight Forwarding and Clearing Association in Rwanda, welcomed the move to privatise the two ports.

"We always have problems of delays and bureaucracies at these two ports …I think it is a good move and we hope will facilitate us, once they are privately owned.

He said if privatised, the owners will be interested in proper performance and efficiency thus benefiting the traders.

However, last year, Kenyan Members of Parliament threatened to protest if the Mombasa port is privatised.

"We will oppose this plan and I intend to sponsor a motion in Parliament to show that we don't want to take the loss of jobs for more than 4,000 people lying down," Garsen MP, Danson Mungatana was quoted as saying.

SG's CEO Forum is hosted by the East African Community Secretariat in partnership with East African Business Council (EABC) and TradeMark East Africa (TMEA), based on shared objectives of fostering the interests of the business community in the integration process.

The forum is a platform bringing together CEOs of regional businesses within the EAC.

The main objective is to provide a platform for regular dialogue with the business community on how to improve the integration process for business and trade.


via The New Times

Is Privatization of East African Ports the Answer?

Negotiations are underway to have the regional ports of Mombasa and Dar-es-Salaam placed under the management of private players.