BMI's Executive Summary

[TOP]

The Sector At A Glance

Key Insights On The Freight Transport Sector Of Kenya

Despite a congestion problem caused by the temporary suspension of underwriting by local insurance companies, prospects for Mombasa port, run by the Kenya Ports Authority (KPA), remain good. KPA chief executive Abdallah Mwaruwa has attributed gains to strong growth in regional economies and improvements in service delivery since the introduction of new port equipment and better operational planning. He has said that the KPA is determined to improve its performance in line with the contract signed with the government in which it was expected to handle 13.7mn tonnes in 2006 and earn KES3.7bn (US$50mn) in profits. In fact, we are optimistic that KPA can continue its recovery from years of debt, under-investment and congestion. In our latest Kenya Freight Transport Report, BMI concludes that maritime freight volume is set to accelerate further to expand by an annual average of 8.1% in the 2007-2011 forecast period.

Various factors support this prediction. We now expect average GDP growth of 4.3% a year over the next five years, which will underpin demand for freight. International trade will grow at a higher 9.4% rate over the same period. Kenya’s ports are of course an important conduit for freight transit to neighbouring East African countries, and this too will boost demand. A further factor is the likely improvement of hinterland transport links, particularly now that the combined concessioning of the Kenyan and Ugandan railway companies to the Rift Valley Railways (RVR) consortium has been completed.

Prospects are also encouraging for recovery in wider freight business. Road freight will continue to be the favoured mode of land transport. We are predicting that annual volume will grow by an average of 5.9% in the 2007-2011 period. Rail freight, plagued by under-investment, has contracted, and it will take some time after the completion of the concessioning process before any kind of strong recovery is likely. We are forecasting average annual growth of 4.0% in tonnage. Air freight is likely to perform dynamically with expected annual growth of 13.7%. In the overall Middle East and Africa (MEA) business environment matrix, Kenya currently ranks second from the bottom, just above Egypt. Kenya records below average scores in a number of categories including political and economic risk and in its development and support of infrastructure. However, Kenya manages to score close to the regional average in terms of its regulatory and competitive environments, largely because it has made some progress in adopting air safety standards and has been forced to seek private sector involvement in key transport sub-sectors, particularly air shipments.

For the 2007-2011 forecast period, we expect Kenya’s transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 4.8% in value terms, versus 4.3% for overall GDP. The total value of transport and communications GDP will rise to US$3.19bn in nominal terms by 2011, representing 8.1% of Kenya’s GDP. The transport and communications sector employed 94,000 people, or 5.0% of the labour force, last year. We see that figure rising to 104,000 by 2011, while remaining proportionately constant at 5% of the total.

Contents

[TOP]

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Industry SWOT

Chapter 3 - Business Environment Overview

Regional Overview

Table: Middle East And Africa Countries Freight Business Environment Ranking

Country Overview

Politics – Long-Term Risk

Economics Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Chapter 4 - Industry Trends And Developments

Road

Rail

Air

Sea

Pipelines

Chapter 5 - Industry Forecast Scenario

Macroeconomic Environment

Table: Kenya: Macroeconomic Forecasts

Chapter 6 - Country Snapshot: Kenya Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education And Healthcare

Table: Education By % Of Relevant Age Groups

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Consumption And Stratification

Chapter 7 - Industry Forecast

Table: Freight Transport Indicators

Table: Freight Carried By Volume

Chapter 8 - Trade Environment

Table: Total Value Of Imports (US$mn)

Table: Value Of Exports By Category (US$mn)

Table: Top Export Destinations (US$mn)

Table: Export Trade (% y-o-y)

Table: Top Import Sources

Table: Import Trade (% y-o-y)

Chapter 9 - Market Overview

Multimodal

Infrastructure

Competitive Landscape: Multimodal

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Company Profiles

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Competitive Landscape: Pipelines

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Freight Transport Reports: Sample of Companies Ranked

[TOP]

Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Freight Transport Sources

[TOP]

BMI's Middle Eastern & African Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: