Dar-es-Salaam port managers court Ugandan businesses

Cargo figures in the Dar es Salaam port to most of its hinterland markets has grown in recent years, but Tanzanian ports chiefs are uneasy about the share of transit traffic destined to Uganda, which has stagnated at two percent, despite the port’s multimillion-dollar investment to compete with Kenya’s Mombasa.

According to the Private Sector Foundation Uganda (PSFU), Mombasa still accounts for 80 percent of Uganda’s cargo, as the Central Corridor continues to grapple with infrastructure challenges, high transport costs and slower clearance at the port.

Under the $421 million Dar es Salaam Maritime Gateway Project (DMGP) – implemented since 2017 – Tanzania Ports Authority (TPA) invested to upgrade the facility, to widen and deepen the port’s berths and entrance channels to enable post-panamax size vessels to call at the port.

The authority also invested in a new roll-on, roll-off vessel terminal, among many other service facilities all meant to enhance the port’s overall performance, leading to container traffic to grow at an average rate of 12 percent per annum, and transit traffic at an average rate of 23.5 percent per annum since 2020.

These growth numbers saw the World Bank last year rank the Dar port above its main regional competitor, Mombasa, in port efficiency ranking.

The ranking, however, has not translated into increased traffic to Uganda, as the Dar-Mwanza-Port Bell leg of the Central Corridor has failed to break the dominance of Mombasa by giving significant competition to take a share of traffic that would be bound for the hinterland via the Northern Corridor.

These issues came to the fore at a recent workshop in Kampala that TPA held under the theme “Facilitating an Efficient Logistics System Through the Central Corridor” to court Ugandan businesses to switch to Dar.

Juma S Kijavara, TPA deputy director-general, conceded that Dar currently handles only two percent of Ugandan cargo traffic, blaming it on inefficiencies on the corridor, like the road-user fee, and inadequate capacity on rail and inland waterways.

“TPA strongly believes that the success of the Central Corridor and the ultimate increase in cargo throughput that is destined to Uganda as a transit market can only be realised when all the relevant stakeholders, both in Tanzania and Uganda, work together in unison,” Mr Kijavara said.

Available data shows that since 2020, the Democratic Republic of Congo has dominated the transit traffic volumes on the Central Corridor’s Dar-Kigoma route, accounting for 42 percent of the total transit traffic, followed by Zambia with 23 percent.

Other users of the corridor are Rwanda (19 percent), Malawi (seven percent) and Burundi (six percent).

But Tanzania is laying the red carpet for Ugandan businesses, offering incentives, including 30-days free storage for all imports and a dedicated goods-shed at the port which can be used as a consolidation and deconsolidation centre any time.

Although this contrasts well with Mombasa port, which offers only 15 days free storage, Ugandan traders cite other factors that lower the Central Corridor’s ranking relative to the Northern Corridor, including the route’s cost effectiveness, robust transport infrastructure, ease of getting port and truck passes, and cargo clearance within the port of Dar es Salaam.

Julius Byaruhanga, director of policy and business development at the Private Sector Foundation Uganda (PSFU), told the TPA chiefs that Dar is second-best when Ugandan business community weighs its cost-effectiveness and efficiency against Mombasa.

For instance, Ugandans transporting cargo to Kampala spend about $4,500 to transport a container from Dar for 4.5 days, compared with $3,000 from Mombasa for three days. Mombasa also clears cargo within one day, while Dar averages two days for cargo clearance.

“As a result, 80 percent of Uganda’s cargo passes through the Port of Mombasa, versus 20 percent of cargo coming through the Port of Dar es Salaam,” Dr Byaruhanga said. “

We propose that Ugandan cargo at the port of Dar es Salaam be transported by railway to Mwanza port, since it takes only eight hours to Uganda, and this will make the use of the Port of Dar er Salaam cost and time-effective, and hence a port of preference by the Uganda business community.”

The TPA chiefs said Uganda can be serviced through a multimodal system, either rail–to–lake– or road–to–lake networks from the Port of Dar es Salaam to Port Bell and Jinja through Mwanza on Lake Victoria, thus optimising an efficient multimodal transport.

Waiswa Bageya, Uganda’s Permanent Secretary in the Ministry of Works and Transport, said this plan dovetails with the country’s tri-modal port at Bukasa for cargo, connecting to Musoma and Mwanza in Tanzania, and Kisumu in Kenya. Phase one of the project is set to be completed this year, he said.

But the ministry is also seeking private partnerships to build a new ship to replace MV Kabalega, re-develop and upgrade Port Bell and Jinja piers, establish search and rescue centres on inland water bodies, re-survey Lake Victoria and install aids-to-navigation.

The Tanzania government is also considering entering Public-Private Partnership with the Uganda business community to develop inland container depots closer to the Uganda border, as part of the measures to address infrastructure challenges to serve this “strategic transit market” TPA officials said.