New law to create more job opportunities in maritime

By James Anyanzwa

Maritime industry has the potential to create 50,000 new jobs annually, the Kenya Maritime Authority (KMA) has said.

Director-General Nancy Karigithu said following the enactment of the Merchant Shipping Act, KMA is working towards modernising operations within the industry to create a level playing field among stakeholders and empower local players.

"We expect that with healthy competition from local and foreign shipping lines, local jobs will be created especially from the lucrative auxiliary maritime service sector," said Karigithu in a statement yesterday.

The maritime industry accounts for more than 95 per cent of Kenya’s foreign trade and has the capacity to create more jobs if the logistics chain is shared competitively among players. Foreign shipping lines have expressed fears that the new Act, favours local and regional investors.

Market distortions

However, Karigithu said the Act will discourage monopolies and other unethical predatory practises and enhance local and foreign investment. She said competition will lead to the logistics chain being shared among players as opposed to a few companies controlling every stage of the chain. "The basis of the Act is to address market distortions in the supply of maritime transport services that has drastically reduced competition and hurt the economies of the region," said Karigithu. She said shipping lines are also offering auxiliary services, a fact that is giving them undue advantage over competitors in areas where the country has sufficient local capacity to invest and create jobs.

Industry thriving

"For domestic involvement in the sector and healthy competition, entry into the supply of international transportation should start with being accorded opportunities to invest into the less capital-intensive areas such as the auxiliary maritime services," she said. Karigithu said competition in these areas thrived until leading shipping lines ventured into them and began using their advantageous position to distort free competition. The most common means is discriminatory application of charges in ways that make it very difficult for non-ship operating competitors to survive. She said more players must be allowed to operate and free competition encouraged if Kenya’s maritime industry was to develop to world class standards.

"Maritime sector controls more than 95 per cent of international trade and it is very strategic that the Act provides for monitoring of practices that seriously distort market competition," said Karigithu.