The Kenya Maritime Authority (KMA) is working on a paper that will propose expansion of incentives to encourage investment in shipbuilding, repair and ownership.
In the new proposals, KMA also intends to implement incentives that would allow the country to share a portion of the billions of dollars paid by importers and exporters to international shipping companies for their cargo.
Kenya will be looking to tap on the international fleet traffic of which the country currently accounts for less than 0.1 percent of the world total fleet, which is dominated by Greece (18 percent of merchant ownership), Japan and China (11 percent), Singapore (7 percent), and Hong Kong (5 percent).
Speaking during the 6th Association of African Maritime Association (AAMA) in Mombasa , KMA acting director general John Omingo said the authority will work with Kenya Revenue Authority on exempting builders from paying taxes.
“That started last year and it is improving the situation for the ship builders. When you do that you also encourage the local ship building and repair companies to be able to pick up and be competitive in terms of attracting the order for the ships that they are building,” said Omingo.
Despite some Kenyans owning ships, the vessels are registered and flagged in others countries, a factor that has been blamed on Kenya’s taxation regime which has stifled investments in the sector.
Currently, local ship builders and repair firms are exempted from paying taxes on spare parts imported in the country, a move that has improved local shipping building capacity.
“When you own a ship you can train your people to onboard your ships. You can create employment for your people and you can also share part of the money that is being paid for carrying cargo," Omingo noted.
Kenya is currently spending about Sh500 billion annually on import-export cargo, which goes to global shipping lines.
"We need to create a framework that allows our people to share that money,” said Omingo.
With billions invested in building a new port in Lamu as well as moderniSation of Mombasa port, Kenya could also earn billions from shipping and increase traffic along the two ports.
This is by adopting the cabotage laws in collaboration with other countries with the coming of the African Continental Free Trade Area (AfCFTA).
