Kenya defends new Shipping Act

October 11, 2009

, MOMBASA, Kenya, Oct 11- The recently enacted Merchant Shipping Act of 2009 will not lock out the participation of foreigners in the maritime industry.

Transport Minister Chirau Ali Mwakwere said fears among a section of shipping lines that the new Act will prohibit direct foreign investment are unfounded as the law now creates a level playing ground for both foreign and local investors.

"It is regrettable that some of the stakeholders misinterpreted this new Act as one that has been enacted to restrict foreign direct investment in the maritime transport sector. This is not so. On the contrary, the government through my ministry encourages collaboration between local and foreign firms," he assured during the opening of a regional meeting on the establishment of consultation machinery in the sector.

He said that the legislation addresses the issue of vertical integration of the chain where a few dominate the sector by applying pricing practices that limit the entry of new participants and asked all stakeholders to support in order to boost trade in the region.

Its operationalisation will spur economic growth given that 95 per cent of international trade is maritime based, he added.

The new law will, among other things reduce the cost of maritime transport and ease business in Kenya’s shipping industry and the region in general.

"This will go a long way in making the country’s exports more competitive in foreign markets while imports will become more affordable to the common people," he said.

At the same time, Mr Mwakwere said the government had mandated the Kenya Maritime Authority (KMA) to monitor efficiencies and competitiveness of a whole transport logistics supply chain that are required in the industry.

In her address to the stakeholders, KMA Director General Nancy Karigithu said the country’s maritime industry is headed for major streamlining with the implementation of the Act.

The separation of the auxiliary shipping services such as ship ownership and clearing and forwarding, ship registration among others will also encourage competition and create more employment opportunities among Kenyans.

"The main purpose of the Act is to create a comprehensive and modern legal regime for merchant shipping in Kenya. It will open the potential in the industry, drastically bringing down the cost of doing business and creating a lot of jobs for Kenyans," said Ms Karigithu.

She says by opening up maritime education Kenyans at both skilled and semi-skilled levels will now have a chance to get jobs in the international shipping, and thus the ability to plough back foreign exchange reserves into the economy in form of salaries.

The new legislation is also expected to address maritime safety, security and marine pollution prevention as well as the preservation of the marine environment.

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