New Market Research Report: Kenya Freight Transport Report 2013

Boston, MA -- (SBWIRE) -- 03/19/2013 -- Kenya's freight transport sector holds considerable potential. As part of the EAC the country stands to benefit from transit trade between its major port of Mombasa and the landlocked hinterland countries of the bloc. However, Kenya's infrastructure continues to hamper this potential, as it is not currently up to the job - continued issues with congestion at Mombasa are evidence of this. This is slowly improving, however; a second container terminal is being constructed at Mombasa, the Lamu Port and transit corridor are under development and investment is being made in the East African road and rail networks.

Headline Industry Data

- 2013 Port of Mombasa tonnage throughput forecast to grow by 4.5%.
- 2013 air freight tonnage throughput predicted to rise by 8.5%.
- 2013 rail freight tonnage throughput forecast to increase 1.8%.
- 2013 total trade set for year-on-year (y-o-y) real-term growth of 6.0%.

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Key Industry Trends

Funding Shortages Hamper EAC Transport Development: Improvements to transport infrastructure in the East African region will be a major catalyst for the growth envisaged under the East African Community (EAC)'s common market, which was launched in 2010. It is estimated that US$20bn is needed to overhaul the main transport corridors. Ports and railways are at the forefront of regional integration processes, as well as being the subject of regional competition in regards to capturing the largest slice of trade between the coast and the heartland. However, in spite of various plans in the pipeline, implementation has been slow, having been affected by major funding shortages and planning delays.

East Africa Road-building Supports Economic Integration: Major transport infrastructure projects in Africa are gradually connecting the corners of the vast continent, with a recent memorandum of understanding (MoU) between Kenya and Ethiopia highlighting this trend. Furthermore, and yet again, China is taking advantage of the funding vacuum, further cementing its already dominant position.

Mombasa's Second Terminal Finally Gets Underway: BMI believes that the launch of the project to build a second container terminal at the Kenyan port of Mombasa will help the facility remain the premier maritime port in the East Africa region. A lack of sufficient capacity has seen the port struggle with congestion in recent years, losing business to its Tanzanian rival the Port of Dar es Salaam.

Key Risks To Outlook

The weather poses risks to our views on growth, inflation, the currency and the balance of payments position. Another season of inadequate rain would undoubtedly have negative ramifications for all of these. Another major risk stems from political stability. Although by no means our core scenario, we cannot rule out the possibility of a repeat of the unrest which followed the last election in 2007 at the vote scheduled for March 2013.

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