ndustry stakeholders are optimistic that revamping of the Bandari College into a maritime academy center of excellence and the Kenya National Shipping Lines (KNSL) will significantly impact on achievements in the Blue Economy (BE)- Kenya’s next economic growth frontier.
In recognition of the immense potential in BE, the government identified it as an emerging area of prosperity potential and added the sector as one of the key areas under the Economic Pillar of the Kenya Vision 2030’s Medium Term Plan (MTP) III that is running between 2018-2022.
Themed “Sustainably manage and develop the Blue Economy resources for enhanced socio-economic benefits to Kenyans”, MTP III recognizes the development and exploitation potential of the BE due to its enormous upstream and downstream linkages with other productive sectors in wealth and employment creation especially in food security, service industry and manufacturing.
Mr. Kenneth Mwige, the Vision 2030 Delivery Secretariat Director General told Freight Logisticsmagazine that countries such as Singapore, Japan and Philippines have created concrete maritime education and training institutions on which exploitation of BE is anchored as a key area in Gross Domestic Product (GDP) growth.
BE will create direct jobs in the shipping and fishing sectors whilst indirectly, creating jobs in ship building and repairs, port services, insurance, bunkering services and ship-related financial and legal services.
A well networked and supported BE sector will potentially promote growth in domestic tax revenues through increased employee income taxes, employee and employer social security contributions, corporate tax and VAT on employees’ consumption thereby immensely contributing towards the growth of Kenya’s economy. A developed BE cluster has a potential to increase productivity along the entire supply chain.
According to the Leading Marine Capitals report of 2019, the global race for attractiveness for doing business in the sector in the future will be won by countries able to attract investors in science and education, research and development, product and technology development and financial, legal companies seeking headquarters, and other sophisticated services.
Although the maritime industry in Kenya has continued to grow over the years, there are numerous challenges that the country must address to tap into its potential. These range from port congestion, slow infrastructural development; inadequate and/or aged equipment; inadequate ship and container repair facilities; slow technological development; lack of skilled human resources and insecurity.
Others include low participation of women and youth in the industry; the high cost of establishing BE-based enterprises, unavailability of opportunities for seaboard training due to limited Kenyan flag fleet and ship ownership to provide employment opportunities; and the high cost of sea-time training, among others.
Kenya Blue Economy training institutions need to develop adequate capacity to offer training as per the required standards.
“Compared to other African maritime nations, Kenya is still lagging behind in human resource capacity-building for the sector,” Mwige noted, adding that as currently constituted, there are no training institutions in the country offering specific training in specialized sector areas such as maritime law, search and rescue services, marine environmental services, offshore energy, offshore mining, underwater welding, marine welding, ship building naval architecture.
Many local shipyards suffer from high labour turnover with a loss of qualified manpower aggravated by the attractiveness of foreign labour markets that offer attractive salaries compared to what local workers receive as shipyard workers.
The discoveries of gas in the Lamu Basin indicates the existence of commercial quantities of hydro-carbon potential thus making Kenya an oil and gas producing nation in future.
Capacity building within this sector is therefore, a vital element in ensuring that the right knowledge, skills and competencies are acquired by Kenyans seeking to take up such opportunities in the oil and gas sector within Kenya Exclusive Economic Zones (EEZ) that offers a great potential for maritime sector and BE in general.
A key impediment in the development of the sector, Mwige noted, is limited access to financing. It should be noted that BE related ventures are capital-intensive in nature, hence, availability of timely and adequate finance, among other factors, is extremely critical.
“However, lack of maritime expertise and the sector’s inherent risk profile discourages most financial institutions from lending to the sector,” Mwige said.
To unlock bottlenecks in the sector, the Secretariat has been engaging implementing agencies through the Vision 2030 Delivery Board. Like all other Vision 2030 Flagship Projects, the Secretariat closely monitors and evaluates the progress of projects in the sector, according to Mwige.
Maritime transportation handles over 95 percent of Kenya’s international trade and the country pays more than US$ 3 billion annually, to foreign shipping lines and ships agents. This represents an opportunity to implement policies to retain a portion of these earnings and create employment.
With its strategic coastline that lies along major maritime trading routes connecting Africa to Europe, the Far East and the Americas, Kenya has the potential of turning into a huge economic powerhouse in the region if it fully exploits this natural resource.
Kenya’s water in the Indian Ocean covers a surface area of approximately 230,000 square kilometres and inland water surface of approximately 10,700 square kilometres. Kenya has a coastline of about 640 kilometres and a jurisdictional claim of an ocean that extends 350 nautical miles.
Kenya is central to the regional shipping industry and the Port of Mombasa has remained the largest and most strategic gateway to the Eastern and Central Africa region, serving a combined population of over three hundred (300) million, in a large number of countries in what is commonly referred to as the Northern Corridor.
International shipping and ports are key in linking the global supply chain, significant in accessing international markets and thus play an important role in driving national economies. The unexplored potential if fully developed would grow our GDP by Kshs. 430 Billion annually.
Kenya, like many countries in Africa, has not utilized her marine and aquatic space for socio-economic development. Western Indian Ocean has resources worth more than Sh2.2 trillion annual output with Kenya’s share of about 20 percent. Marine fishing sub-sector alone had an annual fish potential of 350,000 metric tonnes in 2013 worth Sh90 billion. However, the region only yielded a paltry 9,134 metric tons worth Sh2.3 billion.