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Uganda threatens to boycott Port of Mombasa over transit cash bond

Discussion in 'International Forum' started by Ndoa, Sep 17, 2012.

  1. Ndoa

    Ndoa JF-Expert Member

    Sep 17, 2012
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    Ugandan importers are threatening to boycott the port of Mombasa in protest against a cash bond imposed by Kenya on goods in transit to Uganda.
    "We are opting for Dar es Salaam. We have asked our members to route their imports through Dar. It's a longer route; it's a more costly alternative; but it's what we will resort to since government's diplomacy does not seem to be making headway. This is the best way to send a message of protest against Kenya's policies. Besides, we have not forgotten what happened five years ago," said Kampala City Traders Association spokesman Issa Sekitto, referring to the losses suffered by Ugandan importers during the post- election violence in Kenya in 2007-08.

    Haya Bandari Bongo, Ulaji Huo!
  2. U

    Ubungoubungo JF-Expert Member

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    hapo sasa Tanzania tunatakiwa haraka sana tutengeneze reli ya kati ili usafirishaji wa mizigo kwa magari ya mizigo uondoke na reli iingie ili wapeleke mizigo yao uganda kwa nusu bei ya ile waliyokuwa wanatumia kwa malori. si wanasema route yake ni ndefu? na ni kwamba tu kuna reli toka mombasa hadi jinja ndo maana kutumia ile ya mombasa ni bei raisi kusafirisha mzigo kuliko ya dsm....mwakyembe chezesha akili, tafuta mwekezaji mzuri reli ya kati iimarike haraka, na bandari ya dsm imarisheni ulinzi na kuiboresha panapotakiwa....kwenye ulimwengu wa competition cha muhimu ni kumjali mteja na kuboresha huduma tu, wateja watakuja wenyewe...
  3. Root

    Root JF-Expert Member

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    tatizo la bandari yetu ni long processing ili mzigo utoke
  4. livefire

    livefire JF-Expert Member

    Sep 18, 2012
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    It will cost importers approximately $1,000
    more to transport a 40-foot container from
    Dar to Kampala, than the $3,800 they are
    paying from Mombasa to Kampala by road.

    that is one container, how many do Uganda consume daily/monthly/yearly? It doesnt make any economic sense, though the threat throws some spanner in the works, we understand why KRA/KPA are sitting pretty and not pertubed. With LAMU coming onstream, competitiveness will be between LAMU/MOMBASA PORTS. This will infact give room to proper modernisation of MOMBASA port since as things are, its almost impossible to halt operations to renovate her shape or bring new ideas to better her systems.
  5. Sijali

    Sijali JF-Expert Member

    Sep 18, 2012
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    Wala wasijaribu Tanzania. Tanzania haina mentality ya business, ila ya wizi tu.
    Kama kungekuwa na mtu mwenye akili Tanzania (miongoni mwa viongozi) Bandari ya Tanga ingekidhi vizuri mahitaji ya Uganda/Kusini ya Sudan na Tanzania wala isingehitajia ruzuku za mtu. Ila viongozi wetu fikra walizonazo ni omba-omba tu hawaoni utajiri mkubwa wanaoukalia.
    Kwa nini humpi Mchina, Mwirani, Mkorea bandari nzima ya Tanga kwa miaka 50 ijayo kama huna capital? Tatizo la viongozi hawa uchwara wanaona miaka 50 ni mingi na hawawezi kula hapo. Wanaendesha nchi kwa mahesabu ya mwaka huu na ujao tu. Hakuna long hard thinking.

    MWILI NYUMBA JF-Expert Member

    Sep 18, 2012
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    Mmh!Kwa bandari ya Dar es salaam hii ninayoifahamu mie duh! Labda lakini kwasababu sasa hivi yupo Mwakyembe.
  7. Kabaridi

    Kabaridi JF-Expert Member

    Sep 19, 2012
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    If I may ask How much will it cost Uganda via Tz, (4000$ as oppose to $3000 via Kenya). Mathematicaly not a smart move. There is a border levi of $500 Which is imposed on trucks on the TZ border when you compare to $18 levi on the kenyan border. What about fuel, govt bureaucracy, and other Expenses that may arise from road tolls. All this hassle in the name of defusing misunderstandings arising from bonds on cleared goods. Is the extra mile worth the expense of bleeding extra amounts from traders pockets?! Or is it the exposed oil Deal btn M7 and Raila that has forced KCTA to take such a decision?! Iam sorry KCTA is turning to be more political than association meant to talk for the UG transporters. The Ug authorities hold that the Kenyan election is the coming impediment to efficient transpotation of goods from MBSA to Kampala. I wonder how UG are going to operate without their budget feeling constrained from the numerous adjunct charges the Tanzanian port will impose on them during Transportation.
  8. chash

    chash JF-Expert Member

    Sep 19, 2012
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    Go! Dsm Port, the ball is in your court. Wapi Mh Mwakyembe? fanya mambo and may the best leader win for his port concerning this Lucrative Uganda business opportunity.
  9. Geza Ulole

    Geza Ulole JF-Expert Member

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    where do u get these figures? so far Dar port is the cheapest route in East Africa! And with ur cash bond, Mombasa port will even be more expensive!

    [h=2]Uganda: Should we opt for new routes to sea?[/h]By In2EastAfrica Reporter

    [​IMG][h=3]Should Ugandan importers and authorities resort to alternative routes to the sea and rely less on Mombasa?[/h]
    [​IMG]Mombasa port container terminal
    This is the question that popped up again this week when about 600 containers of sugar and 2,000 vehicles were held at Mombasa following a directive by the Kenya Revenue Authority (KRA) that transit goods coming to Uganda execute a cash bond equivalent to the tax value of the consignments that would be imposed on the same goods were they to be sold in Kenya.
    The August 29 directive caused a cargo movement paralysis and a stand-off, bringing back bad memories for Ugandan importers who use Mombasa-a port that still remains the shortest route for inland states that have no direct access to the sea.
    About 85% of Ugandan-bound international cargo passes through Mombasa, according to revenue statistics. Also, 47% of total Uganda Revenue Authority’s (URA) tax collections are from international trade or customs.
    In the 2011/12 financial year, Uganda collected about sh3 trillion from international trade, which means about sh2.6 trillion of tax revenue was collected from cargo coming through Mombasa. This financial year, the target is sh3.4 trillion, which means if this target is achieved, Uganda will collect taxes worth sh2.89 trillion from cargo passing through Mombasa.
    The above statistics indicate the significance of sea access to Uganda.
    The impact of this, according to the Private Sector Foundation boss, Gideon Badagawa, is that even government efforts like value addition and revenue collection will be hampered because import goods pass through ports.
    “It is in their best interest (Kenya). We are their biggest trading partner. But it is also in the interest of the Ugandan government that Ugandan businesses remain afloat because the impact is value addition and employment,” said Badagawa.
    URA said earlier this week that they were preparing for a high influx of goods, following the transit cash-bond impasse.
    This also exposes the need to quickly develop infrastructure as economies grow, according to analysts.
    “It is a policy issue with the Kenyan government. It has to be the government of Uganda to resolve it with that of Kenya,” Badagawa noted.
    With a GDP of $33.6b, Kenya remains East Africa’s largest economy, followed by Tanzania ($23.3b) then Uganda ($16.8b), while Rwanda ($6.6b) and Burundi ($2.3b) trail respectively.
    Because of this, the much stable Kenya politically finds it easy to play big brother and bully the smaller states, according to analysts.
    But the other smaller economies like Uganda, blighted by decades of war and political instability, have over the years clawed their way back into vibrant economies, posting some of the fastest growth rates globally for about two decades.
    This has come with some clear advantages that despite being landlocked, Uganda is now more viewed as land-linked because of its unique geographical position of serving or being the entry point of cargo accessing Rwanda, Burundi, eastern DRC and South Sudan.
    Then there is the question of the East African Community (EAC). The EAC has been courted as a global symbol of integration, considering the short period of time (10 years) it took to achieve some key milestones like the customs union and the common market.
    The European Union took almost 50 years to negotiate and conclude some of these phases.
    “Also, the European Union is no longer a model, following the Eurozone crisis tearing apart the European economic epicenter,” said an economist familiar with regional trade.
    But non trade barriers, especially avoidable ones like the state imposed Kenya transit bond, negate the integration process. Yet were the barriers, including overcoming the transport hitches, to be avoided, the economic benefits would be huge because currently, intra Africa trade or COMESA seems more viable in the wake of the economic recession in the Western world.
    Kenya did not use agreed platforms of solving such disputes, preferring to arbitrarily announce and begin executing the directive suddenly, halting business flow.
    Richard Kamajugo, the URA commissioner for customs, said the genesis of the problem was mainly the increased amount of Ugandan sugar finding its way onto the Kenya market and Kenya’s suspicion that Uganda does not have the capacity to suddenly produce extra sugar.
    “They think we have no capacity. We have invited them to come and visit the factories,” said Kamajugo. While the matter was resolved late Monday night, there is no guarantee that it will not re-occur.
    Unpredictable Mombasa
    Going by history, analysts believe Uganda and other inland states would be justified to explore Dar-es- Salaam and other central corridor routes.
    “It is legitimate (exploring other routes), no doubt about it. International trade of import and exports cannot be one way, unless it works both ways, you always have a discomfort,” said Kamajugo.
    There have been incidences, even under the customs union, where Kenya has blocked the entry of chicks from Uganda.

    The 2007 post-election violence also paralysed the inland states as inflow of petroleum products and the imports business greatly suffered.
    Kenya is headed for another election in a few months, and there is already anxiety among inland states.
    A few weeks ago, political unrests related to killing of a Muslim cleric also led to uprising disrupting flow.
    And now the 2012 transit cash bond that led to a two weeks stand-off brought back memories of the arbitrary and uneasy use of Mombasa.
    Improving Mombasa’s efficiencies by Kenya Ports Authority and KRA would benefit Kenya and the region ultimately.
    Alternative route, alternative solution
    The National Information Technology Authority-U (NITA-U), Uganda’s ICT regulator, is already opening up an alternative undersea fibre optic cable route through Mutukula, Tanzaniabecause of the frequent breakages of sea cables coming through Mombasa, which all illustrate the need for alternatives.
    But there is a more long-term solution. Building smaller inland ports is emerging as a great solution as efforts to establish a second access route to the sea via the lakeside ports of Bukasa in Uganda, and Musoma in Tanzania, connected by railway to Arusha in the Tanzanian interior and to the port of Tanga on the Indian Ocean indicate.
    The close to $2 billion railway line that will link Tanga harbour and the Lake Victoria side dock of port Bukasa in Kampala via Musoma port is seen as a big solution to Uganda’s never-ending import and export woes.
    Estimates show that the Mwambani-Musoma-Bukasa route would cost anywhere in the range of $3b, a figure that includes buying of vessels, refurbishing the short linkage railway lines and building the ports.
    If Bukasa in Kampala and Musoma in Tanzania are fully set up and connected, it would also open up a new line of economic activity in these areas, greatly reducing the turn around time and cost of moving goods from the coast to inland Uganda.
    These pieces of infrastructure will be a huge bonus to Uganda, as it adds to the new identity of a land-linked country, connecting Rwanda, Burundi, South Sudan and eastern DRC.
    Besides, the go-slow process of the Rift Valley Railways line set to link Mombasa to Kampala would push cargo handling by the cheap rail from 15% to 60%.
    Analysts believe Kenya is playing “big brother wanting to have it all” in an integrating East African Community, where there are already established mechanisms and platforms for resolving conflicts.
    Jones Kiteta, a director at Eusebia, a global shipping firm with offices at Mombasa, says the interruptions increase ultimate cost of doing business in the region, much higher in a region already blighted by high business costs.
    “It is like somebody telling you, do not come to my place.”
    By David Mugabe, The New Vision

    Uganda: Should we opt for new routes to sea? - In2EastAfrica - East African news, Headlines, Business, Tourism, Sports, Health, Entertainment, Education

  10. Geza Ulole

    Geza Ulole JF-Expert Member

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    [h=1]Traders seek options for sea routes[/h]
    WEDNESDAY, 15 AUGUST 2012 00:07

    Traders in the landlocked hinterland countries like Uganda are seeking alternative routes to the sea to mitigate transportation costs for their imports and exports.
    The move comes on the back of numerous complaints regarding the risks on transportation of imports and exports into and outside Uganda from the Transit Transport Corridors and ports of the East African Community (EAC) region.
    Such hazards include political risks, cargo pilferage, risks of delays due to congestion especially on the Northern Corridor route port of Mombasa. This has resulted in losses and increased the cost of doing business for the Uganda business community.
    Uganda's major access to international markets is through the port of Mombasa, on the northern corridor, a distance of about 1,200 km to Kampala, and through Dar es Salaam port on the Central Corridor, a distance of about 1,800 km. But with the Kenyan elections less than four months away, there are worries that the transit corridor through western Kenyan could be affected.
    Statistics from the ministry of Trade show that about 90% of Uganda's imports and exports transit through Mombasa, while 5% goes through Dar es Salaam and about 5% transit through Entebbe International airport. Stakeholders at a consultative meeting organized by the ministry of Trade Industry and Cooperatives (MITC) in Kampala on August 9 argued that, it was time Ugandan traders sought alternative transit routes where they can minimize costs.
    Kassim Omar, chairman of the Uganda Clearing and Forwarding Association (UCIFA), said the Ugandan business community needs to seize the Central Corridor opportunity and route their cargo by road through the port of Dar es Salaam. "With adequate port facilities, the port of Dar es Salaam offers the most viable and cost effective gateway to global trade. Cargo is handled efficiently to the satisfaction of customers," Omar said.
    For fair measure, the ministry of Energy has tried to do something to motivate trader to use the Tanzania route. To encourage the use of the southern route, the ministry of Energy last September recommended a tax rebate of Shs 150 (about $0.06) per litre on products imported through Tanzania. To this day, the Energy ministry says its counterpart, the ministry of Finance is yet to act on this recommendation.
    Omar said Dar es Salaam port has a target clearance time of 24hrs for transit goods. This, he said, is geared towards saving Ugandan shippers time and money. State Minister for Industry James Mutende said it takes 15 days before a ship is allocated a berth after docking at Mombasa, one week to discharge a ship, 18 days for a ship to be moved from the port to Container Freight Services (CFS) section.
    Recent findings indicate that goods take about 44 days to reach Kampala after arriving at Mombasa port, 14 days more than the recommended 30 days. Mutende said it takes two days for a truck to move from the CFS to Nairobi and another two days for the truck to move from Nairobi via Malaba to Kampala.
    "This can be a risk in itself. I would like to challenge you to look at all available measures to mitigate risks to Uganda exports and imports," Mutende said.
    The chairman Kampala City Traders Association (KACITA), Everest Kayondo, said that while Mombasa port was shorter; it had a lot of issues. He said during the 2007 Kenya elections a lot of cargo was damaged and has never been compensated.
    "Kenya is going for elections [later this year] but how ready are we to avoid such scenarios? We need to plan early otherwise we are in for big trouble," Kayondo cautioned.
    The MTIC Commissioner Internal Trade, Raymond Agaba, said the objective of the meeting was to consult and find ways of addressing challenges of Non Tariff Barriers (NTBs) along the transit routes.
    The Assistant Commissioner External Trade, Patrick Okilangole, said in order for traders to maximize profits, they have to minimize risks. "The whole concept is based on risks and opportunities," Okilangole said.
    The Observer - Traders seek options for sea routes
  11. Geza Ulole

    Geza Ulole JF-Expert Member

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    [h=1]Tanzania: Dar es Salaam Port Efficiency Improves[/h]Tagged: Business, East Africa, Infrastructure, Tanzania, Transport

    CONTAINER handling services at the Dar es Salaam port will improve further after key stakeholders enter into agreements that would allow operators to shift cargo that had overstayed to the Inland Container Depot (ICD).
    The Storage capacity of the Dar es Salaam port is about 11,500 containers which is 100 per cent density. But only 65 per cent has been the maximum storage capacity beyond which the port becomes congested.
    "Sometimes, the port has been handling containers at between 70 and 80 per cent of its storage capacity, but efficiency declined and caused delay of ships at the anchorage," remarked The Tanzania Shipping Agents Association (TASAA) Secretary, Mr Peter Kirigini.
    He said in Dar es Salaam at the signing ceremony on Wednesday that the agreement would empower the Tanzania Ports Authority (TPA) and the Tanzania International Container Terminal Services (TICTS) to remove containers which have overstayed to leave open space for the incoming and outgoing cargo.
    Mr Kirigini said the move will enhance efficiency and decongest the port while cutting costs which importers shoulder for delays due to lack of enough space for putting the containers. The charges for overstayed cargo for more that seven free days are between 20 and 40 US dollars for 20 and 40 feet containers respectively. But the charges may double for goods that have overstayed for more than 21 days. Free period goods on transit is 15 days.
    "This is a major step for effective and efficient container handling services at the port which will further bring solutions to the problem of decongestion," said Mr Ephraim Mgawe, the TPA Director General.
    Mr Mgawe said the move has further improved the agreement which was already in place that will see increased choices for importers to either use the port storage facility or the ICD.
    Some of the port stakeholders who signed the agreement include TPA, TICTS, TASAA, Tanzania Freight Forwarders Association (TAFFA) and ICD operators. The ICD operators Manager, Mr Ali Lilani, said apart from increased efficiency, the agreement would help cut unnecessary congestion of trucks at the port as most of the containers would be placed in the inland port.
    "The formalisation of the container handling operations to the ICD is a major milestone into making the port one of the most efficient in the East African Region," he remarked. Recent reports show that cargo clearance is more efficient due to computerisation of many processes, leaving little room for unprofessional acts like corruption.
    Likewise, the port has increased its market share in East Africa after handling 16 per cent more containerised cargo last year, thanks to road improvement, which saw a substantial reduction of Mombasa Port share. The port last year handled 475,000 twenty-foot equivalent units (TEUs) compared to 415,000TEUs of previous year.
    The Dar es Salaam Port Manager, Mr Cassian Ng'amilo, was recently quoted as saying the outstanding performance was due to increased container berths at the port as five ships are handled at a go. The port can now handle six containers ships at a go thus reducing congestions greatly.
    The improvement of roads to Burundi and Rwanda is one of the moves that led to better movement of cargo. Kenya Port Authority (KPA) recent data show that the Mombasa port handled 18.9 per cent less or 552,449 tonnes of cargo from Tanzania, Burundi, Rwanda and the DRC in the nine months to September last year. Tanzania: Dar es Salaam Port Efficiency Improves
  12. Geza Ulole

    Geza Ulole JF-Expert Member

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    Wednesday 01 August
    [h=3]East Africa: Dar es Salaam Port Launches One Stop Centre[/h]

    THE Dar es Salaam Port is a strategic entry and exit point for two major transit corridors in central east and southern Africa's land-locked countries. The port serves the central corridor running from Rwanda, Burundi, Uganda and Democratic Republic of Congo (DRC) that share its borders with Tanzania. The other is the southwest corridor running through Tanzania to Zambia and Malawi. It is also strategically placed to serve as a convenient freight linkage to the Middle East, Far East, Europe, Australia and the Americas.

    Despite Dar Port's comparative advantages to its nearest rivals in the region, the port has bidding constraints, the major one being congestion where cargos dwelling time stands at nine days. To overcome the said obstacle, Tanzania joined hands with the US, and last week opened One Stop Centre (OSC) at Dar es Salaam port, which was long waited and industrial players have described it as a good leap forward.

    The OSC is the government initiative as one approach to improve the country's doing business raking and competitiveness. Tanzania is ranked 127 on the World Bank's Doing Business 2012 report. The OSC that housed eleven government agencies and institutions, which in one or another integrated in clearing and forwarding various goods at the port, designed to cut down port dwelling and documentation time to five days from nine.

    The Minister for Investment and Empowerment, Dr Mary Nagu, said though the centre is operating manually it is still the greatest milestone on easing bidding constraints on doing business in the country. "I wish to underscore the rationale of one stop centre in our efforts to transform Tanzania into a regional logistic hub," Dr Nagu said, "with the view to stimulating regional trade."

    Dar port handles about 95 per cent of the Tanzania international trade, serving six neighbouring land-locked countries in SADC and EAC blocs. "Effective operationalisation of the one stop centre...will greatly improve Tanzania's score in the Trading Across Border Index," Dr Nagu, who is an economist, said. She added the OCS is currently a manual single window operation opted to rescue the situation as an immediate and temporary solution towards reaching the electronic operation. The minister said the Dar port OSC has paved the way for the opening of similar centres at all ports in the country and key border posts to facilitate trade within the region.

    The Tanzania Port Authority (TPA) Director General, Ephraim Mgawe, said the OSC is currently located at temporary building but will be shifted to its permanent base in a 35-storey building that is under construction adjacent to TRA's long room. "The contractor is already at the site," Mr Mgawe said adding "the construction of the tallest building in the city is expected to take three years at the cost of 100bn/-."

    The TPA DG said to establish the one stop centre, depending on the volume of business it handles, costs not less than 150m/-. The centre, according to the US Agency for International Development (USAID) Tanzania Mission Director Robert Cunnane, would cut short the travel time for clearing and forwarding agents to zero from current estimated 14 kilometres used to complete one clearance.

    "Éthe layout of the One Stop Centre...will allow Dar es Salam to become a truly modern port...we (US) believe that Tanzania has bright future as a leading exporter in East Africa," Mr Cunnane said. USAID partnered with TPA on designing of the centre and it contributed 50,000 US dollars for the information technology system, through its USAID/COMPETES -- the Competitiveness and Trade Expansion Programme.

    Chairman of the Container Freight Station ICDs Dry port Association of Tanzania (CIDAT) Mr Ashraf Khan said OSC would further improve supply chain at the port by increasing efficiency in clearing process. "This was supposed to come long time ago, like yesterday. But we are happy at long last it's operational," Mr Khan said. The Chairman told the 'Daily News' that CIDAT had proposed the formation of the centre during their Dar es Salaam Port Improving Committee as way of reducing congestion. He said even the dwell time reduction to nine days from 17 days of 2009 was the result of the Inland Container Depot (ICD) to support the port cargo movements.

    "It is possible to reduce the dwelling time to hours," Mr Khan, also a General Manager of Azam Inland Container Depot, said. The benefits of the OSC are many but among them are efficiency in processing cargo clearance of documents by reducing number of procedures, reducing physical movement, minimising bureaucracy, hence transparency, joint verification of cargo and harmonising of working hours.

    The OSC will enhance Trading Across Border Index, which measures the time and cost spent by businesses in cargo clearance at the Port and Border Posts. The centre will compliment the 24 hours operation of the Port of Dar and the ongoing exercise of reducing the permanent roadblocks across the highways -- with the objective of putting all cargo and vehicle inspectors at weighbridge.

    © 2012 AllAfrica
    East Africa: Dar es Salaam Port Launches One Stop Centre