The transshipment business, which involves the handling of cargo for other ports, is now an area of keen focus for many ports the world over. However, administrative bottlenecks created by the Kenya Revenue Authority (KRA) have stymied Kenya’s transshipment business even as the Mombasa and Lamu ports face increasing competition from the other regional ports that are modernizing their operations even as new ones emerge.

But the tide is set to change if the new Managing Director of Kenya Ports Authority (KPA) Captain William Ruto makes real his promise to confront the issues that have made it difficult for the port to tap into an emerging business line that has led to the growth of other successful ports.

Ruto has indicated that he will impress upon the KRA to simplify their procedures by adopting industry standards practiced elsewhere—such as at the Tangier Med port in Morocco, where 85 per cent of the cargo handled is for other ports, translating to 7.17 million Twenty-Foot Equivalent Units (TEUs).

In an ideal situation, according to the new MD, the KRA is only supposed to approve the ship manifests once the shipping lines lodges them online, which in not the case in Kenya where the KPA is required to physically handle the transshipment containers that are landed at the ports. According to global standards, however, shipping lines, are only required to give notification of the ships that will carry the transshipment containers from the ports to the final destination. Simplified procedures have seen ports such as Singapore and Salalah in Oman handle over 90 per cent of their cargo as transshipment.

The port of Mombasa handled 1.43 million TEUs in 2021 compared with 1.35 million TEUs handled in the same period in 2020, representing an increase of 75,986 TEUs or 5.6 per cent. However, the KPA’s transshipment traffic was at an abysmal level, recording only 220,489 TEUs in 2021, a slight increase compared to the 175,827 TEUs recorded in 2020.

Lamu Port has the potential to become the biggest competitor to Salalah Port in Oman and the Port of Durban in South Africa in the transshipment business. Mombasa is also better placed than Durban to handle transshipments from Europe, China, and Singapore, all major world exporting countries; smaller vessels can be used to move cargo from the port of Mombasa to others on the Southern African coast.

Lamu Port could attract transshipment cargo for Tanzania, Mombasa, Somalia, and the Indian Oceans Islands of Comoros, Madagascar, Seychelles, and South Africa.

Although the KPA has striven to market Mombasa as a transshipment hub, reforms to tap into the business have been painstakingly slow even though the increased infrastructure at the port of Mombasa—dredging of the channel, rehabilitation of the berths, and the construction of the second container terminal—has increased the potential of the Mombasa port to handle more transshipment cargo.

Over seven years ago, a joint task force of the KPA and the KRA created a working template to increase the transshipment volume after collecting views from all the stakeholders involved in this trade and recommended a major transformation that, once fully implemented, would have seen more shipping lines find Mombasa port attractive for transshipment cargo.

In 2015, the joint task force visited three ports in Europe, Asia, and Africa that were close to Mombasa in size—and which have recorded significant growth in transshipment—to gather guiding lessons for the Mombasa port transshipment initiative. The selected ports were Tangier Med in MorrocoMorocco, Colombo in Sri Lanka, and Malta’s Freeport.

According to the team’s report, one of the major factors for the success of these ports is the manner in which they have simplified the processing of transshipment cargo, a vital lesson that Kenya, which has been associated with lengthy processes, could embrace. When the team visited the three ports iIn 2015, the transshipment process in Malta took less than 24 hours to approve, Colombo and Tangier Med both took less than 12 hours, whereas at the port of Mombasa it took 8 to 10 days.

“The shipping business is a complex affair that rides on predictable trends,” said Captain Ruto, a member of the delegation.

In all the ports visited, the transshipment business has been simplified through the use of Electronic Data Interchange (EDI) for faster clearance and approvals. Shipping lines in the three ports are only required to lodge manifests with customs for approval whereas in Kenya nine steps are involved, causing delays, with the ships earmarked to deliver cargo departing without loading the containers.

“The shipping business is a complex affair that rides on predictable trends.”

Delaying a ship is very costly and the daily average additional vessel operating costs incurred by shipping lines can range between US$20,000 and US$35,000 depending on vessel size, a demonstration of how crucial it is for lines to save time in the shipping industry.

Kenya has made significant strides following the fact-finding mission to the three ports. Vessel processing at Mombasa port went paperless when the Single Maritime Window System went live in June 2021, allowing shipping lines to lodge documents online and thus significantly improving clearing and turnaround times.

KenTrade, which runs the online cargo clearing system, worked with the Kenya Maritime Authority (KMA) to implement the system that facilitates ship clearance procedures by providing a single online portal for the sharing of information on the arrival, stay and departure of ships between the shipping lines/agents and the approving government agencies involved.

Since 8 April 2019, it is a mandatory requirement for national governments to introduce electronic information exchange between ships and ports. The objective is to make cross-border trade simpler and the logistics chain more efficient for the over 10 billion tons of goods that are traded by sea annually across the globe.

The requirement is part of a package of amendments in the revised Annex to the International Maritime Organization’s Convention on Facilitation of International Maritime Traffic (FAL Convention) adopted in 2016. It is intended to reduce or eliminate the manual, decentralized, duplicated, and unnecessarily lengthy processes in the maritime sector, which are affecting ships’ turnaround times and increasing costs at the port of Mombasa.

The FAL Convention recommends the use of the “single window” concept whereby the agencies and authorities involved exchange data via a single point of contact.

Another advantage of Mombasa as a transshipment hub is its capacity to attract major shipping lines. There are over 20 shipping lines currently using the port at Mombasa, the majority of which handle containers.

But what should concern Kenya most is the growing competition that is coming with the development of other regional ports and the emergencemergencee of new ones. Tanzania is inching closer to realizing several plans and strategies that have been initiated over the years to enhance its potential as a maritime country.

There are over 20 shipping lines currently using the port at Mombasa, the majority of which handle containers.

The country has direct access to the Indian Ocean, with a long coastline of about 1,424km at the centre of the east coast of Africa. It has the potential to become the least-cost trade and logistics facilitation hub of the Great Lakes region.

There is the planned expansion and modernization of Dar es Salaam port under the Dar es Salaam Maritime Gateway Project (DMGP). The DMGP will increase Dar es Salaam port’s capacity from the current 15 million metric tonnes annually to 28 million tonnes.

The improvement of maritime hard infrastructure has gone hand in hand with the overhauling of the soft infrastructure. The Tanzanian government has already introduced electronic systems that have made cargo processing and clearing easier. These systems include the electronic single window, which has reduced paperwork and has also removed the need to physically visit multiple government agencies and regulatory bodies to lodge documents as all this can be done digitally through the Tanzania Customs Integrated System (Tancis).

In May 2016, global port mega-operator DP World agreed to develop Berbera Port in Somaliland and manage the facility for 30 years, a move that is set to make it the most modern port in the Horn of Africa. Ethiopia has acquired a 19 per cent stake in the project, the other partners being DP World, with a 51 per cent share, and Somaliland with a 30 per cent share. The total investment of the two-phased project will reach US$442 million. DP World will also create an economic free zone in the surrounding area, targeting a range of companies in sectors from logistics to manufacturing, and a road-based economic corridor connecting Berbera with Ethiopia.

Port Berbera is now the closest sea route to landlocked Ethiopia, a journey of 11 hours by road. It has opened the route needed for growth in the import and export of livestock and agricultural produce.

Djibouti has undertaken significant developments in all its ports. The Djibouti International Free Trade Zone (DIFTZ) was officially inaugurated in July 2018. The initial phase, a 240-hectare zone, is the result of a US$370 million investment and consists of three functional blocks located close to all of Djibouti’s major ports.

The project has also created major business opportunities for Djibouti and East Africa as the region’s export manufacturing and processing capacity is expanded in key sectors such as food, automotive parts, textiles and packaging.

The Djibouti ports of Doraleh Multipurpose, Ghoubet and Tadjourah have all been completed in recent years. Doraleh Port is particularly strategically located, connecting Asia, Africa, and Europe. It can handle two and six million tonnes of cargo a year at its bulk terminal and breakbulk terminal, respectively.

Port Berbera is now the closest sea route to landlocked Ethiopia, a journey of 11 hours by road.

Another key milestone for the Djibouti ports is the standard gauge railway (SGR). A 750-kilometer SGR line connecting Addis Ababa with the ports in Djibouti has been constructed, cutting a three-day journey down to 12 hours.

Djibouti has also received global attention due to its strategic location. Virtually, all of the sea trade between Asia and Europe passes through the Red Sea on its way to or from the Suez Canal. As a result, Gulf and Middle Eastern powers, China, the United States, and France have developed great interest in this route and the country today hosts 5 military bases.

Having made significant gains in automating cargo clearing procedures and also expanded the port of Mombasa by constructing a second container terminal and a new port in Lamu, there is great need for the KRA to work with the other industry players to simplify transhipment cargo procedures. The capacity of Lamu Port—which is ideal for transhipment cargo owing to its deeper channel that can receive bigger vessels—has been under-utilised. In spite of its strategic location as a transshipment hub, the port has received less than 20 vessels since the three berths were commissioned in May 2021.

Gone are the days when Melania Trump traveled to Africa in tropical colonial clothes, showing the complete lack of interest of the United States, led by her husband, in the continent. Since then, official American policy has changed significantly.

Africa is, once again, a continent disputed by the great powers. This dispute results from the new race for raw materials and markets, the search for influence in the world chess, namely African votes in the United Nations, and also the presentation of a social laboratory to show the world which recipe for prosperity works best. : the developmental authoritarian Asian or the liberal western.

All of this, in the context of the new competitive dispute with China, led the United States to once again focus its attention on Africa and place it at the forefront of its foreign policy priorities.

In recent months, American initiatives related to Africa and the trips of high dignitaries have been constant. Vice President Kamala Harris, Secretary of the Treasury Janet Yellen, First Lady Jill Biden, to mention just the most important recent trips (Harris, March 2023; Yellen, January 2023; Biden , February 2023). Only Joe Biden’s tour is missing to culminate this high-level political-diplomatic offensive.

However, the impression that remains from these trips is that, apart from beautiful speeches, splendid photographic opportunities and some circumstantial financial support, they add nothing to the resolution of African problems and, above all, they do not diminish the supposed Chinese influence, nor do they oppose it.

The problem is in the model adopted by the Americans. It is a model that is not very interactive and does not address African structural problems. Essentially, US leaders distribute smiles and marketing, warn of the Chinese danger, announce small foreign aid and refer the big questions to the International Monetary Fund (IMF), talking with greater or lesser intensity about good governance. Janet Yellen’s visit to Zambia was emblematic of this failure. When Hichilema was elected, he became a sort of poster boy for American good intentions.

However, what is certain is that Zambia has a serious foreign debt problem and has defaulted, finding itself in an endless labyrinth between China and the IMF, which ends up greatly harming the population. It is not enough to say that China is to blame and order the IMF to move forward, which in turn makes everything depend on agreements with China, which is waiting for the country to agree with the other creditors, getting into a tailspin – prolonged pong.

This kind of attitude will only lead to the US being criticized for talking but doing nothing.

The truth is that China’s entry into Africa from the 2000s onwards was not due to any historical relationship, practically irrelevant, but to a void, a void left by the West. Now, it is this void that persists, despite the new rhetoric and the countless initiatives, trips and forums held in the American capital or in Europe.

Africa does not need economists with their Harvard and MIT textbooks, which apply recipes from developed market economies unable to serve African populations and leading to their impoverishment. The manual to be applied must be the previous one, that of the very creation and structuring of economies and markets. Bringing consultants, economists, managers and people of intentions ashore doesn’t help – it only complicates things.

Obviously, to be successful, the North American perspective has to be different, resembling what was done in Europe after the Second World War (1939-1945). In other words, launching their money helicopters over Africa, while creating domestic markets on the continent.

Very simply put, the US will only compete with the Chinese in Africa if it replaces them, if it spends money. Arriving in Africa empty-handed or with promises of future private investment, which may or may not materialize, is no use.

Strictly speaking, if they really want to help Africa, the Americans should start by swapping the Chinese debt, that is, lending financial funds to African governments at lower interest rates and higher maturities, so that governments pay China. In this way it would certainly be possible to introduce competition into the African debt market and remove the monopoly from China.

In the same vein is the financial support for structural projects on the continent, from the massification of electricity and basic sanitation to digitization.

It is clear that the American people may disagree with this option and politicians may not want to embrace it, but the only realistic path is this and not another — this is how the US has gained influence in the past.

Furthermore, in addition to real capital, Africa needs specialists: not economists or consultants, which are in abundance, but professionals in essential areas, such as doctors, nurses, engineers, IT professionals, teachers, etc.

It is necessary to recover the initial spirit of the Peace Corps, idealized by President Kennedy, and massively send to Africa “men and women from the United States qualified for service abroad and available to serve, if necessary under difficult conditions, to help people in areas that help countries meet their needs” (Peace Corps Goals).

Finally, good governance should not focus on the constitutional apparatus, but on something simpler and more fundamental: public administration.

What is essential is to prepare public administrations in African countries to function efficiently and effectively, even if governments do not meet their objectives. Shifting the focus of good governance from the executive to the administration is a structuring element of any functioning society, overcoming disagreements and fears of political interference.

It is evident that only an investment of this type – in capital, in human resources and in qualified training – can allow the United States to leave a real mark of progress in Africa, following a counterpoint strategy to that of China. Otherwise, good intentions will be just that: good intentions without results.

Africa is the belle at a new international ball. Suitors from the East and West are in relentless pursuit, never mind her chequered past. Barely surviving European colonization and shortly thereafter tottering away from the destructive neo-liberal economic policies enforced through the IMF and the World Bank, Africa is no stranger to exploitative “partnerships”. Seemingly the eternal optimist, Africa’s latest expedition to the East has raised alarm bells. Those of us beholden to enormous Chinese loans wonder if she has jumped out of the frying pan into the debt fire.

In a departure from the rest of the region, Kenya’s incumbent government has violently swivelled its foreign policy back to the West. With the firm belief that “Kenya needs more friends”, President William Samoei Ruto is rapidly negotiating the US-Kenya Strategic Trade and Investment Partnership (STIP) which will take the place of the Africa Growth and Opportunity Act (Agoa).

The new trade pact reportedly aims to increase investment, promote sustainable and inclusive growth, benefit workers, consumers and businesses and support regional integration. The initial concept of the trade pact had a broad scope which included 11 pillars covering themes such as anti-corruption, good regulatory practices, protecting workers’ rights and supporting the participation of women and youth.

However, the second round of US-Kenya STIP negotiations held in April has whittled down the previous eleven pillars into five areas of “mutual interest”. The five new pillars are: economic prosperity, trade, and investment; defence cooperation; democracy, governance, and civilian security, multilateral and regional issues; and health. The noticeably slimmer STIP is perhaps a strategic nod towards the Chinese style of development investment, a departure from the usual conditional development assistance characteristic of the West. Fewer conditions on corruption, human rights, democracy and environmental protection, indicates a less normatively prescriptive approach to Africa going forward.

Evidencing as a kind of Foreign Direct Investments (FDI) standards “race to the bottom”, the West is working to counter global Chinese influence, garnered through heavy-duty Chinese investment in infrastructure projects which are collectively known as the “Belt and Road Initiative”. Leaning on its strengths, the US counter-offer to China’s modern take on the old Silk Road has taken on the flavour of a corporate takeover.  The US, seemingly less troubled with the “democratic quality” of its new business partner, has taken on a more transactional approach to trade with Kenya, accelerating trade talks and expecting “rapid progress” in the silent observation that the Government of Kenya is ranked 123rd out of a possible 180 in global corruption indices.

There has been extensive discussion on Kenya’s geo-strategic value as an entry point for foreign interests and investment in the region, and the counterbalance of the nature and extent of Kenya’s state capture, an inability to decisively deal with corruption. In the grim reality of Kenya as a syndicate of special interests that benefits from the corruption status quo and decides what is the public interest in a region with an imbedded anti-public interest culture,  who is getting the short end of the trade-deal stick and what it will cost the Kenyan public is a festering concern.

Substantive concerns 

The frenzied enthusiasm of government officials tasked with negotiating the STIP hides the strangled cries of civil society organizations protesting the opaque nature of the substance of the trade negotiations surrounding agriculture, digital trade and regulatory practice provisions. The most controversial of these has been agriculture.

The US government has been clear and unwavering in its intent to infuse “provisions intended to eliminate or reduce non-tariff barriers that can hamper market access for US agricultural products”. In recognition of one of the darker aspects of globalization, the agricultural component of STIP has raised hackles and pitchforks in response to the lifting of a ban on GMO foods and seeds in Kenya.

First, there is concern that smallholder farmers, who account for 78% of total agricultural produce in Kenya, will be unable to compete with the US agricultural corporations who have vast economies and efficiencies of scale. Corn, a competitor to Kenya’s staple maize crop, is likely to have a devastating effect on the local smallholder markets. As a result, smallholder farmers are likely to suffer a fall in farmgate prices, possibly exacerbating poverty.

Secondly, separate from the concerns that the US-produced genetically modified food that is now available to Kenyan consumers may be harmful to human and animal life, the lack of clarity whether GMO seeds are included in the bundle of agricultural products offered by the US government is causing more apprehension in civil and public spaces. GMO seeds have increasingly been packaged as the answer to the perennial drought and famine issues. Climate-related weather events, aggravated further by the inflationary pressures of COVID-19 and the war in Europe have piled on the pressure on food systems.

However, the GMO quick-fix to a local food systems problem might be an example of when foreign solutions add to local problems. It is clear that the push towards GMOs does not take into account other issues that may be limiting food systems such as the grand corruption that has sabotaged many attempts at food security In Kenya, the consistent leak in the policy bucket that dooms most policies and initiatives in the crucial agricultural sector to failure. A historical survey indicates there is no guarantee that a change in food policy will bring any significant benefit to the mwananchi.

The GMO quick-fix to a local food systems problem might be an example of when foreign solutions add to local problems.

In addition, while GMOs are presented as the answer to the food security problem, there is little discussion of the failure of GMO seeds in other small-scale contexts. The effects of GMO seed adoption on secondary agricultural input markets such as patented seeds, costly fertilizers and pesticides (sourced also from US multinationals) is enough to question if Kenya’s slice of the trade cake will even be fractionally worth it. Finally, the erosion of traditional food culture through the adoption of GMOs, which has kept modern lifestyle diseases such as obesity relatively at bay, feels conspicuously like a kind of American cultural imperialism—a costly one.

Thirdly and perhaps most disquieting, is the potential loss of national sovereignty that might result from the STIP. In an increasingly tumultuous global economy, in addition to the residual impact of COVID-19, and sustained and escalating global conflict, it might be increasingly difficult for Kenya to protect its domestic food supplies after the implementation of the FTA.  If American corn, for example, floods the Kenyan maize market, there is a strong farmgate price incentive for Kenyan small-scale farmers to change to more profitable crops, effectively allowing the monopoly of American corn. Subsequently, if there are fluctuations in the dollar, and American corn becomes more expensive, then Kenyan consumers are exposed to inflationary pressures and possibly shortages. Simply, American supply disruptions become our stability-threatening problems.

Process concerns 

it is important to point out that the removal of the GMO ban in Kenya was the necessary pre-requisite for the agricultural component of the STIP to be realized. However, how the ban was lifted augurs poorly for the people of Kenya and their democratic processes. In a cabinet meeting chaired by President Ruto, the executive revoked the ten-year ban on the importation and cultivation of GMO products.

The Constitution of Kenya 2010 requires that citizens be involved in decision-making processes at all levels of government as part of the conduct of public affairs, either directly or through freely chosen representatives. The executive decision to lift the GMO ban did not meet the constitutionally required threshold of meaningful public participation. If subordinate policies and their instruments must submit to the process of public participation, it is unclear why the decision to lift the GMO ban was exempt. Exhibiting a level of executive dominance that any champions of democracy should be uncomfortable with, the Ruto administration has shoved GMO Food down our collective throat without asking.

While GMOs are presented as the answer to the food security problem, there is little discussion of the failure of GMO seeds in other small-scale contexts.

I have previously discussed why the public interest in Kenya is often overrun by political and foreign interests and this is one manifestation of the same inherited pattern. Specifically, the biggest beneficiaries of the lifting of the ban are likely the corporations that are part of the American agricultural industrial complex. Those firms that produce GMO food products and seeds will now have a captive market through the STIP.

Known for their teleopathic pursuit of profit, is it wise to entrust our food supply to American multinational corporations? In the hyper-capitalist society that Is the United States where Big Pharma profits from medical emergencies, the military-industrial complex profits from war, I shudder to think how Big Agriculture will seek to maximize profits in Kenya and East Africa.

The ongoing FDI standards race to the bottom where Western countries re-define democratic values for the sake of trade access, the proliferating anti-public interest culture in Kenya and a distinctly totalitarian tilt to the Ruto administration are creating the perfect imperialist storm. The new scramble and partition of Africa is gaining momentum and food might be the final frontier.