Boston, MA -- (SBWire) -- 03/14/2013 --BMI believes the performance of the Kenyan economy on the one hand, and its ports and shipping sector on the other, are following an 'asymmetrical' pattern across 2012 and 2013. We see the economy accelerating, while port activity, measured by cargo throughput at Mombasa, appears to be slowing down. After estimated growth of 4.5% in 2012, we forecast Kenyan GDP to accelerate to 5.8% in 2013, on the back of stronger consumption and investment. We envisage growth in gross tonnage and box traffic at Mombasa, which enjoyed double-digit percentage expansion in 2012, reducing to single digits in 2013. The explanation, we believe, lies in the fact that 2012 was an exceptional year, when the easing of traditional capacity constraints and congestion problems at the port led to a release of 'repressed demand'. We anticipate that, in 2013, there will be a return to business as usual, which underlines the strong freight potential of the East African hinterland. It could be argued that the Kenyan authorities are not helping themselves, having introduced a tax on transit freight to Uganda, which could push shippers to take their business elsewhere in 2013 - to Dar es Salaam in Tanzania.
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However, we remain broadly upbeat about Kenya's ports and shipping sector, based on three main factors: reasonable economic growth in Kenya itself; a dynamic East African region (this is important because Mombasa acts as a trade gateway for many of Kenya's neighbouring countries); and finally, the continuing signs that the port's ongoing congestion problems are easing.
Headline Industry Data
- Port of Mombasa tonnage throughput forecast to grow 17.5% in 2012 and 4.5% in 2013 to reach 24.07mn tonnes at the end of the latter year. Growth to average 5.2% per annum between 2013 and 2017.
- Container throughput at the same port forecast to grow year-on-year (y-o-y) 22.2% in 2012 and 7.1% in 2013 to reach 1.008mn twenty-foot equivalent units (TEUs) by the end of the latter year. Box growth to average 7.7% per annum between 2013 and 2017.
- 2013 total trade set for y-o-y real growth of 6.0% and to average 6.8% per annum between 2013 and 2017.
Key Industry Trends
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