State eyes freight profits by adopting cabotage law

A container being offloaded from a cargo ship at Lamu Port. [Omondi Onyango, Standard]

Kenya targets a stake in international freight rates for imports and exports by strengthening its local shipping industry, a State official has said.

Mining, Blue Economy and Maritime Cabinet Secretary Salim Mvurya said the country is rallying other Africa countries to embrace the use of domestic shipping and maritime services to reduce payment of most of the freight to international shipping lines.

State officials preparing for the Africa Maritime Cabotage and Blue Economy conference slated for November 8 to 10 in Mombasa also said in interviews that Kenya spends Sh600 billion on freight rates paid to foreign shipping lines annually in imports and exports costs which can be reduced with implementation of a cabotage policy.

They said the policy will protect and nurture the local shipping industry. The officials also believe the use of domestic shipping and maritime services will create employment for youth

Kenya is pushing for the use of domestic shipping and maritime services in a bid to stimulate industries and create employment opportunities for the youth.

The State officials said the strategy can help reduce dependency on foreign shipping lines and improve the balance of trade.

The officials said Kenya will save billions of shillings annually as cost of imports and exports if it transports its own cargo on local shipping lines.

Secretary for Shipping and Maritime Affairs Geofrey Kaituko said the continent was set to promote and regulate the use of domestic and maritime resources within African nations.

"By encouraging the use of domestic shipping and maritime services, we can stimulate local industries and create employment opportunities for the youth. Additionally, this strategy can help reduce dependency on foreign shipping lines, thereby improving the balance of trade," Kaituko said.

He was flanked by KMA acting director general John Omingo, Port Management Association of Eastern and Southern Africa (Pmaesa) secretary general Andre Ciseau and Intergovernment Standing Committee on Shipping (Iscos) secretary general Daniel Kiange.

Mr Omingo noted that Kenya could save up to Sh600 billion in the transportation of its imports and exports if it develops a vibrant domestic sea transport.

A ship docks at the Port of Lamu. [Robert Menza, Standard]

"Our maritime cabotage can start in shallow waters, then deep waters and later continental waters. We pay more than Sh600 billion to foreign shipping lines annually for our imports and exports," he noted.

Omingo said East Africa has been left behind in implementing maritime cabotage compared to West Africa and hence there is a lot to learn when representatives from 28 countries in the continent meet in Mombasa.

Colonel Ciseau said maritime cabotage could help in protecting maritime resources against poaching and other illegal activities.

Mr Kiange said it was time for Africa to invest in the carriage of its own cargo so as to benefit from international trade. "We can successfully implement maritime cabotage through close collaboration and having our own ships," he noted.

Kaituko said that Africa has coastlines stretching more than 38,000 kilometres, abundant natural resources and a rapidly growing population but this potential has been underutilised.

"International shipping lines have dominated maritime trade, often to the detriment of African nations. African maritime cabotage seeks to address this issue and harness the continent's maritime resources for its own development," he argued.

He observed that African maritime cabotage will play a crucial role in enhancing the security of African waters.

"By regulating and monitoring maritime activities, countries can better combat illegal activities like piracy, smuggling, and illegal fishing. These activities not only threaten national security but also hinder economic growth," he said.

He noted that by implementing effective cabotage regulations, African nations can ensure that their maritime boundaries are secure and well-patrolled.

He said the use of domestic shipping for regional trade will lead to more efficient and eco-friendly transportation.

"This not only reduces the carbon footprint but also contributes to preserving the delicate marine ecosystems along the African coasts," he noted.

He however said that the development of a robust maritime industry will require substantial investment in infrastructure, shipbuilding, training, and technology.

"Additionally, it demands transparent and efficient regulatory frameworks to ensure that cabotage rules are adhered to and enforced consistently," he added.