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High costs slow down control of EA cargo business

  • Written by Daily Monitor
  • Published under Industry news

Nairobi. The cost of engaging in cross-border trade has risen in Kenya to nearly double thecharges in Tanzania, putting a speed bump on the country’s bid to control East Africa’s logistics business.

It costs an average of 2,255 (about Shs6,122,325) for a firm based in Kenya to export a 40-foot container and KShs209, 150 (about Shs6,305,859) to import same cargo size, the World Bank’s Doing Business 2015 shows. 

The survey shows that Tanzania, the only other East African state with a seaport, charges just $1,090 (about Shs2,959,350) to facilitate export of a standard container and KShs143,735 (about Shs4,333,601 ) to import one.

“Tanzania has invested in port infrastructure. New cranes, a conveyor belt and anchorage tankers at the port of Dar es Salaam helped reduce berthing and unloading time as well as congestion,” notes the survey released last week.

It adds: “The reduction in the time required for port and terminal handling activities benefits not only traders in Tanzania but also those in the landlocked economies of Burundi and Rwanda that use the port.”

Kenya has been on an aggressive reforms drive to boost efficiency at its transport corridors and attract landlocked traders to Mombasa Port.

Under a recent pact signed with Uganda and Rwanda, Kenya has significantly reduced regulatory barriers and initiated a number of programmes to boost efficiency along the Mombasa-Malaba road. 

It now takes about five days to clear goods from the port of Mombasa to Malaba with transporters going through only two roadblocks and two weighbridges. 

In 2013, a trip from Mombasa to Kampala took 10 to 20 days.

Cost of logistics

The cost of logistics in Kenya and Tanzania account for a significant portion of costs incurred in landlocked states such as Uganda, Rwanda, Burundi and DR Congo. Among the landlocked states of East Africa, Rwanda is the most expensive state to engage in cross-border trade, with export costing $3245 (about Shs 8,810,175) and import at KShs444, 110 (about Shs13,389,889) per container.

Source: Daily Monitor

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