Kenya Shipping Report Q1 2014 - New Report Available

From: Fast Market Research, Inc.
Published: Mon Jan 20 2014

Strong Fundamentals Lift 2014 GDP Growth To 6.1%

While the violent attack on the Westgate Mall in Nairobi in September 2013 was a reminder of the potentially high political risk in the region, our outlook for the Kenyan economy remains very positive. That event aside, we are predicting that a combination of relative political stability, rising investment, and Kenya's status as the commercial hub of a fast-growing region will underpin strong GDP growth. BMI is now projecting 6.1% GDP growth in 2014 followed by 6.2% in 2015. In our view Kenya's capital, Nairobi, and key port, Mombasa, remain well-placed as the commercial centre of an East African Community (EAC) enjoying a resource boom and 7%-plus annual growth rates.

At home, growth will be led by strong household consumption (rising as more Kenyans join the ranks of the middle classes and despite continuing income inequalities), comparative price stability, and robust investment. Public spending will also rise, particularly since the introduction of reforms in 2010 which require the creation of a new level of government - 47 county-level administrations with a wide variety of responsibilities for agriculture, transport, and health services. Net exports will, for the moment, be something of a drag on Kenyan growth, although we note the beginnings of a move to diversify from raw or semi-processed agricultural goods in the direction of manufacturing, including automobile and motorcycle assembly.

Full Report Details at

We have a positive outlook for Kenya's ports and shipping sector based on three main factors: reasonable economic growth in Kenya itself; a dynamic East African region (this is important because Mombasa acts as a trade gateway for many of Kenya's neighbouring countries); and finally, continuing signs that Mombasa port's ongoing congestion problems are easing. Granted, there are significant threats to Mombasa's almost monopoly-like role in this part of Africa, but they exist in the long term.

Headline Industry Data

* Port of Mombasa tonnage throughput forecast to grow 5.2% in 2014 to reach 24.511mn tonnes. Growth to average 5.3% a year in the medium term to 2018.
* Container throughput at the same port forecast to grow 11.9% in 2014 to reach 1.141mn twenty-foot equivalent units (TEUs). Box growth to average 12.0% per annum to 2018.
* 2014 total trade set for y-o-y real growth of 5.6% (marginally down on 5.8% in 2013) and to average 6.6% per annum to 2018.

Key Industry Trends

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