The New Lamu Port: A Rebranding of the Coastal Bloc Economy.
With it’s opening scheduled this Thursday (20th May 2021), the ultra modern refurbished Lamu Port comes with extra economic surplus projections to the Coastal people. The advantages are open to investors, business people and the local community seeking employment.
It’s almost five years since the standard gauge railway operations commenced in Mombasa (first opened on 31st May 2017 ), a project that not only came with advantages but huge economic limitations that left the Coastal economy crumbling. The project closed the initial pathways of businesses, so many investors had to close down their silos and lead their commercial trucks to garages. Business for many at the coastal city of Mombasa went down and so was the purchasing power and the circulation of money which drastically went down. Unfortunately, the growth in the Region has gone down since the number of intermediaries had been cut by this project.
According to a report on “The Socio-economic Impact of the operationalization of the Mombasa-Nairobi Standard gauge railway on port city of Mombasa”, presented to the county government of Mombasa on August 2019, by Dr. Kennedy Ogollah (Team Leader-UoN), Dr. Kingsford Rucha (UoN), Dr. Joshua Aroni and Mr. Gichiri Ndua, the Mombasa economy had had the deepest pinch. This has been seen with the loss of jobs, low morale within the business community and proliferation of drugs amongst other youth social ills.
Mombasa had been considered for a long time a hub of economic sync in the Coastal region, however the report had earlier subjected the Standard Gauge Railway (SGR) operationalization and it’s subsequent pronouncement projected into a number of negative impact amongst them being, Road Truckers Collective Redundancies, Closure of Trucking Businesses, Impact on Warehousing Business, Roadside Businesses – Activity Contraction , Container Freight Stations Relocation/Closure , Job Losses (Loaders, Drivers, Mechanics, Shop/Hotel Attendants) increase in Crime Rate and Social Ills and also a drastic fall on the Mombasa County Revenue.
It should be noted that, over the years many businesses originated from Mombasa. Since independence the Coastal region has been considered the first of product reach. Most items arriving into the country in bulk must reach the Kenyan coast before being supplied to the rest of the country using truck drivers. These also had opened up many avenues where the Coastal community could benefit from the economy by being given a boost on their small businesses. The SGR killed it all. What options are there for the local business community?
According to a report published by the Business Daily, on September 15th, 2019, The government had lost more than Sh126 billion in revenue in one year from Mombasa County since the introduction of freight trains. The publication which had it’s background on the report submitted by the University of Nairobi to County government of Mombasa, demonstrated that
the coastal county is at it’s “economic decay point”, with Container Frieght Stations (CFSs), long-distance trucks and transport related businesses such as fuelling and service stations mostly affected.
By the end of 2019 more than 3, 000 employees working in CFSs, trucks and fuel stations had been laid off while more than 9,500 workers were being expected to be sent home if the directive is upheld. It’s could be a bizarre figure if the latest statistics are done after the the pandemic struck the country. Many local businesses had had to close and resort to buying local with an aim of supporting the fellow local businesses.
So many microfinances have had to face a huge toll of debt escapades who can’t afford paying back either on time or not at all. The economy has been going down to ruins time after time, year after year yet nothing has been done to bring it back the optimum standards it used to hold before. The SGR, came with huge expectations from the whole country on improving the economy through improving the ease of businesses, yet it was only digging a deep hole that had been there without a reliable fix.
The Lamu Port steps in as a growth destiny for the crawling Coastal bloc economy. It opens up more avenues for small and medium sized enterprises to kickstand their businesses without any difficulty. Many unemployed locals who had been rendered jobless by the SGR are eyeing at the new international port as the new job seeking avenue for their daily wages.
The port which will have the capacity to handle large vessels from international shipping lines that ply the Indian Ocean, the Mediterranean Sea, and the Red Sea will become Kenya’s second commercial seaport that will facilitate the transportation of bulk cargo to landlocked South Sudan and Ethiopia besides stimulating the growth of the local manufacturing sector.
Speaking to the Xinhua news, the acting managing director of the Kenya Ports Authority (KPA), Rashid Salim assured the Coastal region many benefits than limitations with the Lamu Port opening. He said that state agencies were working on modalities of rolling out fiscal incentives to international shipping lines keen on utilizing the Lamu port. This will open more additional advantages to the CFS, SMEs and other investors in jumping.
As the government plans to connect the SGR from Mombasa depot to Lamu, it should also consider the economic bargain of the Coastal economy. The Lamu Port has had it’s new basket to contribute in the country’s gross domestic product. This cannot be achieved to maximum if the businesses are designed in one array of pool in collection like in what had been done to Mombasa. The government needs to balance the market by giving some blank zones where the SGR cannot be lynching the economy, only for the benefit of the Coastal region.
However, there is need to include new strategies of rebranding the Coastal economy so that it can fit the new phase. Clear economic stratification policies need to be laid down by the county governments belonging to the Coastal region. The pool of economic basket should benefit the local market. It should consider the lowest entrepreneur and also be able to guarantee an upward projection of the economic development in the Region. Regarding means concrete strategies, clear guidance on operationalization of the Lamu Port that would not loss to loss of money in the economy.
The Transport sector is the highest contributor to the County’s GDP at 23 percent, then followed by manufacturing, real estate, and construction contributing 16, 12, and 10 percent respectively. In total the four sector contribute a 60 percent the GDP at county level. Following a study to establish the impact of SGR on the Port City of Mombasa, the findings indicate a significant impact both at macro and micro level. At last there is need to have a strategic Execution Team, that monitors with a view to always act preemptively and to come up with subsequent assessments to support implementation.
Compiled in Mombasa, Kenya.