Capture of Kismayo to boost growth in maritime sector

According to Kenya Maritime Authority C.E.O. Nancy Karigithu, capture of Kismayo will reduce insurance premium and consequently lower freight charges.

MOMBASA (Xinhua) — Kenya said on Thursday successful capture of the Somali port of Kismayo by Africa Union soldiers and allied forces will significantly boost the growth of maritime industry in Africa.

Transport Minister Amos Kimunya said the liberation of Kismayo by Kenyan contingent in the UN-backed Africa Union forces had put an end to piracy off the coast of Somalia that had posed a major threat to regional trade, forcing cost of freight to go up.

“With the eventual liberation of port of Kismayo by the joint forces we know that we have tackled piracy at source,” Kimunya told the inaugural African Maritime Authorities meeting which is being attended by the CEOs from over 30 countries in Mombasa.

The minister announced that more shipping lines are expected to use the port of Mombasa and in return expand regional trade in Kenya, Uganda, Burundi and Congo, with the diffused threat of piracy.

“We decided to sort-out the problem of piracy at the source and Kenya Defence Forces (KDF) moved into Somalia last year and teamed up with allied forces, and we are now on our way to stabilize Somalia,” he added.

The drop in piracy incidents is however a relief to shipping companies using the Indian Ocean that have been target of pirates often paying heavy ransom to secure release of their vehicles and the crew.

Shipping companies had been forced to hire private security companies to enhance the security of their vehicles, a fact that however has increased the cost of doing business.

Consumers in eastern and central Africa region had before Kenya’s cross border incursion into Somalia also been affected by the piracy as the cost of insurance went up because of highlighted risks, forcing importers to transfer the high insurance cost consumers.

Kimunya said piracy cases have reduced tremendously since Kenya deployed its troops to Somali.

The African maritime industry, along the Indian Ocean has been greatly affected by piracy that has raised the costs of shipping as insurance companies and private ship security companies increased their premiums to mitigate the risks.

The three-day conference is expected to formulate a master plan for rolling out measures for fast tracking the revised Maritime Transport Charter adopted by the 15th ordinary session of the assembly held in Kampala Uganda in 2010.

The minister said the cases of piracy had deprived the region of additional income from cruise shipping due to high transit costs as result of piracy cases.

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Article courtesy of Coastweek.