Inadequate investment in infrastructure at the port of Dar es Salaam in Tanzania is undermining global and regional export competitiveness, according to a report by TradeMark East Africa (TMEA).
According to the report, the cost of shipping to Tanzania is 25 per cent higher than rates to competing ports in Southern Africa due to the port’s inefficiencies caused by inadequate investment in infrastructure.
“Inefficiency and delays also increase inventory cost for high value commodities, deterring private investment, while excessive import dwell time and slow clearing and forwarding procedures,” the report states.
Dar es Salaam port is a key link in the transport supply chain in East Africa and handles over nine million tonnes of cargo annually. In container trade, the port has been registering a 12 per cent growth per annum since 2000.
To improve port efficiency, TradeMark East Africa has committed US$21.3 million to the Tanzania Port Authority (TPA). “TMEA will also assist the TPA to design and implement strategies for the changing nature of trade.”
TMEA has also managed to sign financing agreement with the TPA and the Development Bank if Southern Africa (DBSA) to fund two feasibility studies for deepening and strengthening berths and modernising cargo handling facilities.
“Through an initial contribution of US$300,000, TMEA has leveraged US$750,000 of DBSA grants to fund feasibility work on berths.”
After the work, increased revenues are expected in the general cargo terminal as well as a decrease in container import dwell time and an improvement in ship work rates with turn-around times also expected.
High Transport Costs
The report also indicates that high transport costs in the East African Region are affecting its international trade competitiveness.
“The time taken to cross borders, particularly for vehicles bound for landlocked countries, together with infrastructural delays, makes the situation worse,” the report said.
One-stop border posts are being established in Kenya, Rwanda, Uganda, Tanzania and Burundi.
Thirty percent reduction in clearance times for passengers and transit goods at border crossing is expected after TMEA maps the border crossing process.