Kenya Port Traffic Seen Growing in 2013 After Calm Election

By MarEx 2013-06-05 14:04:00

* Kenyan election jitters slowed business early this year

* Mombasa port the main gateway to east African economies

(Reuters) - Container traffic through Kenya's main Mombasa port declined in the first quarter of 2013 due to a slowdown in economic activity before the March presidential election, but a port official said business was seen growing overall this year.

The Indian Ocean port is a barometer of east African business, handling most imports such as fuel and consumer goods for Kenya, the region's biggest economy, and its landlocked neighbours as well as exports like tea and coffee.

Gichiri Ndua, the port's managing director, said container traffic was seen growing 6 percent this year on last, in spite of the 7.5 percent first quarter fall, with Kenya's economy seen expanding 6 percent this year after a peaceful election.

"Business is quickly getting back to normal and we expect to hit 22 million tonnes or over by the end of the year," Ndua told reporters. "We would have done more, even 23 million tonnes, were it not for the election anxiety."

Fears of a repeat - which did not transpire - of the ethnic bloodshed that followed a disputed election in 2007 led importers to seek alternative routes for their goods, for example through Tanzania, or put their orders on hold.

Ndua said dredging of the port's main channel had allowed bigger ships to dock at the port, which has suffered from under-investment and chronic congestion.

Kenya is building a $300 million second container terminal in Mombasa to handle increased trade within the region that is driven by growth in construction, vast infrastructure development and an emerging middle class.

Ndua said the new terminal was expected to be ready by 2016.

But the port risks losing out to other ports in the region. China plans to invest in major port construction projects in Tanzania and South Africa.

Kenya also plans to build a second port in Lamu, north of Mombasa, with a capacity of 23 million tonnes per year, though there are lingering questions over how the project will be financed.

Reporting by Joseph Akwiri; Editing by Richard Lough/Mark Heinrich