A tug-boat directing a cargo vessel to a berth at Mombasa Port. PHOTO/FILE
By ANDREW MWANGURA
Kenya’s maritime potential stays largely untapped, regardless of the nation’s appreciable strategic benefits and entry to key worldwide delivery routes.
With solely 25 service provider vessels registered below the Kenyan flag in 2020—out of 1,849 ship visits to Kenyan ports that yr—it’s clear that Kenya is lacking out on a big alternative for financial progress and regional management in maritime affairs.
At present, round 28 service provider ships owned by Mombasa-based firms are registered below overseas flags of comfort, whereas one other 11 bulk carriers are equally flagged overseas.
This widespread observe ends in a direct monetary loss to Kenya—an estimated Sh 1.2 billion yearly in tonnage charges alone. These charges, if retained, may very well be reinvested into enhancing the nation’s maritime infrastructure, coaching its workforce, and bolstering its worldwide standing.
This difficulty highlights a crucial problem: the dearth of a aggressive home registry that draws vessel house owners to register below the Kenyan flag. Whereas world open registries corresponding to Panama, Liberia, and the Marshall Islands dominate, Kenya stays relegated to the periphery of this extremely profitable sector.
The worldwide service provider fleet presently contains over 100,000 vessels, with complete deadweight tonnage exceeding 2.1 billion tonnes. Kenya’s exclusion from this community means it forgoes vital alternatives for each financial progress and regulatory affect.
Moreover, specialised sectors throughout the maritime business current distinctive alternatives for progress, together with offshore oil and fuel fleets, offshore provide vessels (OSVs), and the cruise business.
With East Africa’s offshore vitality exploration on the rise, Kenya has the potential to grow to be a horny registry for Floating Manufacturing Storage and Offloading (FPSO) items—of which there are roughly 175 worldwide.
Equally, the worldwide OSV fleet, which helps offshore vitality manufacturing, numbers over 3,000 items. Establishing a aggressive registry for these specialised sectors would place Kenya as a maritime hub within the area, offering each business advantages and employment alternatives.
The cruise business, regardless of latest setbacks, continues to develop globally. With an estimated 270 ocean-going vessels, this sector may additionally profit from a Kenyan registry providing aggressive charges and a powerful popularity for security and sustainability.
The creation of an Worldwide Open Ship Registry (IOSR) would mark a transformative shift in Kenya’s maritime coverage. Such a registry wouldn’t solely generate speedy income but in addition function a catalyst for long-term improvement, positioning Kenya as a regional maritime chief.
Past monetary features, an IOSR would stimulate job creation, strengthen maritime governance, and improve Kenya’s standing in worldwide maritime our bodies.
Nevertheless, to make this imaginative and prescient a actuality, Kenya should handle a number of key challenges. First, it wants to supply extra aggressive monetary incentives. Transport tax havens and tax holidays may very well be launched to make registering below the Kenyan flag financially engaging.
With present traits exhibiting a desire for overseas flags, it’s crucial to create a local weather the place Kenyan registration turns into a rational financial alternative. Second, Kenya should undertake artistic financing fashions to assist the capital-intensive nature of the delivery business.
Establishing a devoted Cabotage Vessels Financing Fund, alongside public-private partnerships utilizing pension funds, may assist promote native possession of delivery belongings and mitigate the excessive prices of entry into the sector.
A cruise ship at Mombasa Port. PHOTO/FILE
Third, the nation’s regulatory frameworks, such because the Service provider Transport Act, should be up to date to accommodate trendy maritime wants. The legal guidelines governing cabotage—vessel operations inside nationwide waters—ought to defend home pursuits whereas additionally encouraging world participation.
A aggressive ship registry requires excess of a easy administrative overhaul. It necessitates a complete suite of fiscal incentives designed to draw each home and worldwide shipowners.
For instance, registration price rebates for early adopters would encourage delivery firms to make the swap to the Kenyan flag. Moreover, administrative value reductions and gas rebates would assist alleviate the operational burden on delivery firms, making Kenya a extra engaging vacation spot for world fleets.
A Tonnage Tax regime, akin to these in maritime powerhouses such because the UK, Greece, and Singapore, would offer fiscal certainty. This tax system, which taxes ships based mostly on their web tonnage slightly than earnings, provides predictability and stability—qualities that attraction to delivery companies searching for dependable fiscal environments.
Equally crucial to the success of a Kenyan ship registry is the event of a talented workforce. Establishing a Kenyan Service provider Navy Coaching Board (MNTB) could be a pivotal step in making a complete system for maritime training and coaching.
This board would be sure that maritime programs align with worldwide requirements, that cadetship programmes are created in partnership with delivery firms, and that seafarer certification complies with the Worldwide Conference on Requirements of Coaching, Certification and Watchkeeping (STCW).
Moreover, subsidies for cadetship coaching and seafarer tax exemptions may incentivise each firms and people to spend money on growing native expertise. This is able to not solely strengthen Kenya’s maritime workforce but in addition make the Kenyan flag extra engaging by guaranteeing the provision of skilled, competent seafarers.
The implementation of an Worldwide Open Ship Registry in Kenya would provoke a virtuous cycle. Registration charges may fund important infrastructure and coaching programmes, whereas a stronger regulatory framework would improve security, environmental compliance, and Kenya’s skill to affect worldwide maritime insurance policies.
As well as, with higher native possession, Kenyan stakeholders may gain advantage from the long-term financial returns of a flourishing maritime sector.
In flip, Kenya would acquire a extra influential voice in world maritime boards, permitting the nation to form insurance policies that mirror its personal nationwide pursuits and regional aspirations.
Kenya stands at a pivotal second in its maritime historical past. With the potential to seize misplaced tonnage charges and considerably enhance its maritime profile, Kenya should act decisively to ascertain a aggressive and sustainable maritime registry.
By implementing sound fiscal insurance policies, updating authorized frameworks, investing in human assets, and creating strategic incentives, the nation can place itself as Africa’s main maritime hub.
The time to behave is now. Kenya’s maritime future is filled with untapped potential—by seizing the chance to ascertain an Worldwide Open Ship Registry, the nation can rework its maritime sector right into a key pillar of its financial and regional management.
