This order by Kenyan President William Ruto to revert cargo clearing services to the port of Mombasa could upset China and Uganda.
China and Uganda are the port’s biggest clients, and the order could trigger anxiety among major players who depend on it.
The order, issued as President Ruto took office, is set to have far-reaching ramifications.
The key question is what China’s reaction will be, given that Kenya must still meet its end of the bargain on the standard gauge railway (SGR) cargo operation numbers and debt repayments.
But more importantly, will be whether port operations’ efficiency that has currently seen goods reach Uganda in a record four days after being offloaded at the Mombasa port will continue. The shortened time was due to the seamless systems that directly fed the SGR, and onwards to the Nairobi Inland Container depot and the Naivasha dry port.
Kenya’s move also comes as neighbour Tanzania steps up its efforts to connect the Dar es Salaam port with other East African countries through the Central Corridor.
Speaking on Tuesday in his first address to the nation after his swearing-in as the fifth president of Kenya, President Ruto defended his move to undo the policy of his predecessor Uhuru Kenyatta.
He said his actions were aimed at restoring thousands of jobs that had been lost in the logistics sector in Mombasa when former president Kenyatta issued an order for all cargo coming through the port of Mombasa to be hauled by the SGR, and cleared at either Nairobi or the Naivasha Inland Container Depot (ICD).
“This afternoon, I will be issuing instructions for clearance of all goods and other attendant operational issues to revert to the port of Mombasa.
This restores thousands of jobs in the city of Mombasa,” said President Ruto on Tuesday.
But even as cargo operations are ordered back to Mombasa, the question now is how Kenya will repay the SGR loan considering that the repayments will more than double in the financial year starting this July, when there will be increased payment of principal sums to the Exim Bank of China for the project.
