East African ports intensify competition for market share of Indian Ocean trade, a comprehensive report published by Gbs Africa.
GBS Africa, the leading African-led consultancy services firm supporting trade and investment flows to the African continent, has released a latest report on the intensifying East African port competition as the market share of Indian Ocean trade increases.
From the Horn of Africa on the strategic Red Sea to the bustling ports of Mozambique, East Africa’s ancient “Swahili coast” provides a logistical link between the massive population centers of Africa and other continents.
Foreign direct investment is driving the expansion and rehabilitation of existing seaports, while greenfield facilities are also being rolled out. Ports that avoid partnerships with experienced foreign investors risk losing out as competition for market share intensifies.
One of the flagship infrastructure projects identified by the government in Kenya Vision 2030 is the development of a new transport corridor linking a new modern port of Lamu to Garissa, Isiolo, Maralal, Lodwar and Lokichogio and branching off at Isiolo to Moyale on the border with Ethiopia and continuing to the border with South Sudan. The Lamu Port facilities, when completed, will result in the creation of significant employment opportunities which cover not only direct employment related to the operation of the port, but also indirect employment in all fields (agriculture, fishing, manufacturing, logistics, transport, trade, etc. ) No call for tenders has yet been launched for the management of this port.
Lamu Port has had the advantage of being the only port in the eastern part of Africa to serve as a transshipment port. Due to its depth, the port can accommodate the large container ship. Small vessels have now started calling at Lamu port for transshipment to other ports around the world. This has many advantages, mainly the proximity to the transshipment port. Thus, the containers move much faster. Second, they avoid time to get
at the port of Salalah in Oman. The Port of Salalah is the largest port in the Arabian Peninsula and most vessels in East Africa use this port for most inbound and outbound transhipments. This potentially put Salalah in direct competition with Lamu. However, Kenya needs to take a bolder step to market the port so that regular cargoes are directed to Lamu. The second and larger plan is the use of the port for cargoes bound for southern Ethiopia and South Sudan. The road will be fully utilized once roads and railways linking the two countries are developed. By Anthony Kariuki, GBS Africa
The East Africa Ports report provides insight into the competition for Indian Ocean trade market share and should be read by anyone interested in the challenges and opportunities in the region.
“For the continent to be fully integrated and for the vision of the Africa Free Continental trade agreement to be fully realized, we need to invest in the logistics sector in Africa, this will facilitate the movement of goods and services. It is therefore important to have policies to attract investment in this sector” says Agnes Gitau, Managing Partner, GBS Africa.
ABOUT GBS AFRICA
Founded in 2011, GBS Africa is an African-led, impact-driven consulting firm. We provide a combination of services to help businesses manage political and economic risks, successfully access the continent’s market, expand into Africa’s regional economic blocs, and resolve trade and investment disputes.
With 10 years of experience helping clients identify sustainable investment opportunities and aligning our investment advice with countries’ development priorities, GBS Africa is a leading preferred advisory firm with offices in the UK and Kenya.
Agnès Gitau Managing Partner
Email: [email protected]