Inter-port competition hots up

There is strong competition between the ports of Mombasa and Dar es Salaam to establish themselves as the regional East African trade hub – with Djibouti being added to the mix. Upgrades already under way or completed, as well as those in the pipeline, will reduce the logistics cost of doing business in the region, and boost prospects for growth in what is already Africa’s fastest-growing region. According to the annual African Development

Bank (AfDB) 2019 African Economic Outlook, economic growth in East Africa is expected to be around 5.9% in 2019 and 6.1% in 2020. Tanzania is investing heavily in port and landside infrastructure in order to make Dar es Salaam more competitive. In July 2017, president John Magufuli unveiled the Dar es Salaam Maritime Gateway Project (DSMGP), which aims to increase Dar es Salaam’s capacity from 13.8 million tons to 28 million tons of cargo a year,

and to reduce berth waiting times from 80 hours to 30. In June 2018, Tanzania also began construction on a US$10bn port in Bagamoyo, which will be the biggest East African port when completed. Uganda is building a new port on Bukasa island and rehabilitating the 11km road from Port Bell to Kampala as well as refurbishing 250 train wagons to transport goods through the Central Corridor. Kenya, in turn, is also investing in port and landside infrastructure in

order to retain its position as the primary regional gateway. It is building a new port at Lamu as the gateway for the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project. The first vessel is due to dock in November this year. It is also in the process of electrifying the 472 km railway line from Mombasa to Nairobi – a decision announced after Tanzania said it was investing $1.9 billion in an electrified rail project to compete with Kenya.

The Kenyan line is designed to carry  22 million tons of cargo a year, equivalent to 40% of Mombasa Port’s throughput. Ethiopia has, in the meantime, acquired stakes in Djibouti’s Port of Doraleh in the Gulf of Aden – which has raised questions around Lapsset. More than 90% of the goods Djibouti currently handles go to Ethiopia, which has invested US$3.4 billion to electrify the railway line running from the port to its capital, Addis Ababa.