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Port Development in East Africa

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Author(s): Matthew Gore, Senior Associate, Holman Fenwick Willan, London, UK

East Africa has long been marginalised as a somewhat less significant part of the global container industry, with inadequate capital investment in infrastructure leading to the majority of cargo being transhipped over Red Sea or Middle East Gulf ports such as Jebel Ali, Salalah or the Indian Ocean Islands.

A recent rise in container activity suggests that East Africa may be shaking off its previous reputation however. A report published in January, 2016 by Dutch transport consultancy firm Dynamar indicated that cargo volumes moving to and from East Africa increased by a compound annual growth rate of 9% over the past five years. Economic growth projections suggest that this trend is only set to continue for the remainder of the decade; the IMF forecast GDP growth for Kenya, Mozambique and Tanzania to be around 8% per annum through to the end of 2020, whilst the aggregate population across the three countries is reported to increase by 29% to 133.4 million in the same period. Chinese exports to East Africa are also expected to increase by 91% by 2020.

INFRASTRUCTURE

Against this backdrop of strong economic performance, existing port facilities appear somewhat limited, with current capacity insufficient to serve not only their own countries, but also the vast hinterland of landlocked nations such as South Sudan, Uganda and Rwanda beyond them. The region therefore represents an attractive growth market for both terminal operators and major shipping lines alike. Of equal importance to the…


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