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Kenya will increase its competitiveness by leasing key seaports to the private sector

According to the Kenya National Bureau of Statistics (KNBS), the volume of cargo handled by one of East Africa’s busiest seaports, Mombasa, would fall for the first time in five years in 2022, with local media pointing to increased competition from Tanzania’s Dar es Salaam.

Kenya has begun the process of leasing its major seaports in a bid to boost the competitiveness of its maritime sector and generate at least Ksh1.4 trillion ($10 billion) annually by 2030. 

The country is seeking private investors to take over the operation and management of five port facilities – Mombasa and Lamu Ports, Dongo Kundu Special Economic Zones, Kisumu Port and Shimoni Fishing Port – through a public-private partnership.

According to President William Ruto’s administration, the move will transform the country’s port facilities, which have been challenged by congestion and longer dwell times for cargo, into world-class ports. It also aims to make the Northern Corridor competitive and revitalize Kenya’s maritime industry.

These include Lamu Container Terminal berths 1-3, Lamu Special Economic Zone, Mombasa Port berths 11-14 and Mombasa Port Container Terminal 1. The projects are being implemented as part of KPA’s 25-year port master plan.

Kenya’s trade route is currently facing intense competition as landlocked Uganda, Burundi and Rwanda increasingly prefer to use ports of the neighboring Tanzania. In 2022, total cargo passing through Mombasa dropped to 33.74 million metric tonnes from 34.76 million tonnes in 2021.

In the latest global Container Port Performance Index (CPPI) released by the World Bank in May, the ports of Djibouti, Dar es Salaam and Berbera overtook Mombasa in terms of efficiency and performance based on the time a ship spends in port. 

The ranking placed Kenya’s leading international seaport, Mombasa, at 326th out of the 348 ports evaluated worldwide, behind other major East African ports. This is a dramatic drop from the 2021 ranking where Mombasa was ranked 296th.

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