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Market Report, "Kenya Shipping Report Q3 2013", Published

New Transportation market report from Business Monitor International: "Kenya Shipping Report Q3 2013"


Boston, MA -- (SBWIRE) -- 09/12/2013 -- Post-Election Confidence Boost Kicks In

In the wake of the March presidential elections, the economic outlook for Kenya looks encouraging. The fact that the elections passed off without major violence or disruption - which had been widely feared - has provided a boost for business and investor confidence. Meanwhile, inflation is trending down, the currency is stable, and interest rates are falling. While export demand from Europe remains muted, the outlook for the country's nearby African trading partners is much more encouraging. We are now forecasting that GDP growth will pick up from 4.2% in 2012 to 5.7% in 2013. There are downside risks, such as the possible recurrence of dry weather that would hit the agricultural sector, and the persistence of ethnic divisions that, despite the peaceful elections, could still come to the fore again on a one- to two-year timescale. It is also possible that the creation of 47 new counties - part of President Uhuru Kenyatta's commitment to a more devolved system of governance - could generate a fiscal imbalance. However, if these downside risks do not materialise, our core forecast is that Kenya will settle down to a 6%+ trend growth rate, providing a solid base for shipping demand.

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BMI has a positive outlook for 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. Granted, there are significant threats to Mombasa's almost monopoly-like role in this part of Africa, but they exist on the long term.

Headline Industry Data

- Port of Mombasa tonnage throughput forecast to grow 4.3% in 2013 to reach 23.86mn tonnes. Growth to average 5.1% a year in the medium term to 2017.
- Container throughput at the same port forecast to grow 13.2% in 2013 to reach 1.02mn twenty-foot equivalent units (TEUs). Box growth to average 12.4% per annum to 2017.
- 2013 total trade set for year-on-year real growth of 6.0% and to average 6.8% per annum to 2017.

Key Industry Trends

First Quarter Box Traffic Falls At Mombasa: Container traffic at Mombasa declined by 7.5% in Q113 compared with the previous year. The fall was attributed to a downturn in economic activity prior to the Kenyan presidential election in March. Despite this, container traffic is expected to increase by 6% in 2013 compared with the previous year. Tonnage is predicted to total 22mn tonnes in 2013.

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