Traders have welcomed President William Ruto’s pledge to revert key port logistics services to the Mombasa port.
The move is seen as key to reviving the Coast economy and restoring jobs lost when the government issued a directive for cargo from the port to be transported by Standard Gauge Railway (SGR) in 2018 to Nairobi and Naivasha dry ports.
The directive was blamed for the collapse of container freight stations (CFSs) businesses, loss of cargo from road transporters and shifting of clearing and forwarding firms.
On Tuesday, September 13, Kenya National Chamber of Commerce and Industry (KNCCI) Mombasa chairman Mustafa Ramadhan said President Ruto’s move will restore the jobs lost in the clearing and forwarding sector, CFSs and road transport.
He said Mombasa’s economy was being driven by the port logistics businesses and the government directive had made it shrink.
“This is a good move for the economy of the Coast region. It will create jobs particularly in the clearing and forwarding sector and road transport. Currently, office spaces are empty in most of major buildings after businesses shifted,” he said.
National chairman of the Kenya International Freight and Warehousing Association (Kifwa) Roy Mwanthi said the government’s directive on the compulsory use of SGR had made it costly since cargo owners incurred additional US$300 (Sh30,000).
“The directive created a monopoly and as a result the railway service became costly. Some cargo used to be transported by rail to Nairobi and then returned to the Coast. The move also forced clearing and forwarding firms to shift from Mombasa. CFSs are almost closing down,” he argued.
Mwanthi said the government order paralysed auxiliary services such as petrol stations, spare parts outlets, hotels and even car wash.
He said the government established the railway development levy in 2012 where cargo passing through the seaports and airports were charged 2.5 per cent of the imports and wondered why the State forced a compulsory uptake of cargo by rail.
“The work of the government should be to create a conducive environment for businesses to thrive and not a monopoly. The railway development levy was enough to cater for the cost of the railway line,” he said.
Muslim for Human Rights (Muhuri) chairman and coordinator of the Okoa Mombasa movement Mr Khelef Khalifa said the President’s pledge to revert the port logistics services to Mombasa came as a pleasant surprise.
“We thought President Ruto would not revert the port services to Mombasa because he was in the same administration that gave the directive to force cargo to be carried to Nairobi by SGR. We are surprised and we are watching to see the actual return of the port services,” Khalifa said.
Khalifa said Muhuri and Okoa Mombasa movement which brings together several civil society groups opposed the forced use of the SGR freight services and wanted cargo owners to be allowed to choose the mode of transport.