Kenya paid $15.6 billion in the five years of the review, followed by Zambia and Tanzania, which spent $11.2 billion and $10.5 billion respectively.
“If EAC states are to grow their economies, they cannot afford to keep paying this kind of money to foreign companies. Their economies are growing and imports are increasing at an average rate of seven per cent annually, so these figures will keep rising,” said Mr Mwige.
ISCOS — an initiative of Kenya, Uganda, Tanzania and Zambia — plays a key advisory role on maritime matters.
According to Kenya Ports Authority statistics, the volume of cargo passing through Mombasa Port is projected to grow at between five and 10 per cent this year, that is, 27.36 million tonnes compared with the 24.875 million tonnes handled in 2014. Container traffic at the port is projected to rise from 1.012 million twenty-foot equivalent unit (teu) containers last year to 1.3 million teu this year, a 28.8 per cent increase.
According to Shippers Council of East Africa executive officer Gilbert Lang’at, countries should empower such entities as the Kenya National Shipping Line (KNSL) to purchase empty containers so that they can become involved in the shipping business.
Once cargo has been delivered to its destination, empty containers are supposed to be returned to the shipping line within a free period of 14 days for local and up to 45 days for transit cargo, failing to which they attract a charge called demurrage.
Shipping lines charge these fees differently, ranging between $7 and $14 per day depending on the size of the container. Returning empty containers takes time while demurrage charges come as added costs to importers.
“The cost of buying a vessel might be quite prohibitive but to begin with, if the government buys containers for KNSL, they will be in business since it is the most important component of importing and exporting goods,” he said.
The Kenya Maritime Authority, in a proposal to revamp KNSL, suggests that cabotage laws that support reservation of cargo for national carriers should be implemented.
“Ongoing endeavours to make the port of Mombasa a hub will greatly benefit a national shipping line operating under a cabotage regime while there will be savings on foreign exchange arising from use of own vessels for international carriage of goods,” the report says.
Source: The East African