For strange reasons, the Kenya Kwanza government has been silent on the place of the “Blue Economy” in its economic revival agenda. Even its manifesto says nothing about the industry, although it has, in the last decade, been touted by many industry players as the next economic growth frontier. Kenya has ocean resources spread over an area of 245,000 km², or 42 per cent of its total land area, which makes the country a maritime state.
Although wrongly viewed by many as a capital-intensive industry— of the type which, because of the poor state of Kenya’s economy, Ruto promised to shun unless they were of immense benefit—there are quick gains to be made that aptly fit into the bottom-up economic model that endeared him to those Kenyans who voted for his ticket.
There has been consistent policy neglect of the maritime sector since independence. Even Kenya’s first independence economic blueprint, African Socialism and its Application to Planning in Kenya – 1965, lacked a place for the maritime industry in the country’s economic growth agenda.
Kenya has ocean resources spread over an area of 245,000 km², or 42 per cent of its total land area, which makes the country a maritime state.
Although Uhuru Kenyatta’s administration attempted to give the Blue Economy direction, it has not gone as far as he might have desired. The full potential of the industry was brought home to senior government officials, Uhuru Kenyatta included, in 2015 when the Kenya Maritime Authority (KMA), the industry regulator, took the first ever National Maritime Conference to Nairobi; they realized what a sleeping giant the Blue Economy was.
However, the Blue Economy has failed to turn around Kenya’s economy over the last decade, one of the main reasons being the failure to create a competent workforce that can work with foreign firms to drive the industry. There is a serious gap in personnel training, with the few professionals in the industry having been trained outside the country at prohibitive cost. This is because of a lack of sound policies.
A stakeholders’ forum that convened on 7 October 2021 in Nairobi under the auspices of the Intergovernmental Standing Committee on Shipping (ISCOS)—a regional maritime organisation—to address the challenges in Maritime Education and Training (MET), returned a harsh verdict of a sector in dire need of reforms. This is not just a Kenyan problem but also a regional one.
Industry stakeholders from ISCOS member states—Kenya, Uganda, Tanzania and Zambia—noted the lack of qualified training staff and maritime professionals such as maritime lawyers, marine construction personnel, and shipping and logistics personnel. Inadequate and expensive training facilities, tools and equipment were also cited as a huge challenge that was derailing the industry’s progress.
Funding for the industry is low and collaboration and coordination, which would create new synergies amongst MET institutions in the region, are also lacking, the stakeholders noted. The industry also suffers from a lack of knowledge about the vast employment opportunities in the maritime industry while the high cost of maritime training and skills development is prohibitive, requiring practical training facilities such as simulators that are too expensive to be acquired by individual institutions.
The region also faces high costs in developing maritime curricula and lacks harmonized maritime curricula that meet international standards. Moreover, there exists no Memorandum of Understanding or Memorandum of Cooperation between neighbouring countries. The lack of definitive continuous professional development and capacity building opportunities for trainers and lecturers affects the quality of training.
The growth of MET in Kenya has been painstakingly slow. It started in 2004 when the government of Kenya established the KMA by presidential order to oversee the transfer of responsibilities in shipping matters from the Kenya Ports Authority (KPA) to an autonomous state corporation to oversee training, security and safety of the sea as well as to commercialize the industry.
In 2009, after a long struggle with parliament—which lacked knowledge of maritime and shipping affairs that would enable it to enact a law to oversee the industry—the Merchant Shipping Act was finally adopted.
One of the greatest headaches for KMA has been training to replace an aging workforce and equip the industry with emerging trends. Although the maritime industry in Kenya has ballooned over the years, MET has not grown at a commensurate rate and there is a danger of a future shortage of personnel. Therefore, in order to exploit the ocean economy, which Kenya has identified as critically crucial, increasing the country’s human capacity is a prerequisite.
The country has made some strides that the Ruto regime should build on for the immediate and future needs of the maritime industry. In collaboration with other institutions, the KMA has developed a national curriculum for maritime training for seafarers and land-based maritime transport service providers.
The agency has also worked with the Kenya Institute of Curriculum Development, the Technical and Vocational Education and Training Authority (TVETA) and the Ministry of Education, Science and Technology to develop Certificate and Diploma Curricula on Maritime Transport Logistics.
The Jomo Kenyatta University of Agriculture and Technology (JKUAT) is offering a logistics and supply chain degree programme, while Moi University is offering a maritime management degree programme.
Having developed the programme in collaboration with other stakeholders, JKUAT is now offering a marine engineering degree course while the Technical University of Mombasa (TUM) and Bandari Maritime Academy (BMA) are offering diploma programmes on the same.
Underscoring how much the blue economy had become a priority for Kenya, the government hosted the first ever global Sustainable Blue Economy conference in November 2018 with support from Japan and Canada. Some 18,000 delegates drawn from all over the world took part.
Participants made voluntary financial commitments amounting to US$172.2 million for various aspects of the Blue Economy, as well as several non-monetary commitments in areas such as partnerships and capacity building. These, however, did not materialize due to capacity constraints and a poor policy background.
There exists a clear policy gap on who should steer the growth of the Blue Economy. In January 2017, the president appointed the Chief of Defence Forces, Samson Mwathethe, to chair a Blue Economy Implementation Committee. The Kenya Gazette notice said that the eight-member team was mandated to coordinate and oversee the implementation of the prioritized programmes in the industry and was to submit monthly reports. However, not much came out of that committee which was, moreover, expected to develop an Integrated Maritime Transport Policy to galvanize and harmonize an industry that is currently overseen by 22 agencies with duplicating and conflicting roles.
The management of the Blue Economy is spread out over three government departments with no simplified mechanisms of collaboration despite the great interdependence among the players in the maritime industry. Executive order No. 1 of May 2020 placed the KPA and the Kenya Ferry Services (KFS) under the transport department.
The Department of Shipping and Maritime Affairs oversees the KMA, BMA and the Kenya National Shipping Line (KNSL), while the state department for fisheries is in charge of the Kenya Marine and Fisheries Research Institute (KEMFRI) and the Kenya Fisheries Advisory Council.
Without a harmonized approach, the country has failed to exploit sea-based resources, which are worth a huge fortune. In 2018, the then Agriculture Cabinet Secretary Mwangi Kiunjuri said Kenya was losing over KSh440 billion annually by failing to fully exploit the blue economy.
The Western Indian Ocean has resources worth more than KSh2.2 trillion in annual outputs, with Kenya’s share being about 20 per cent of this. The marine fishing sub-sector alone had an annual fish potential of 350,000 metric tonnes worth KSh90 billion in 2013. However, the region only yielded a paltry 9,134 metric tonnes worth KSh2.3 billion.
Infrastructural limitations and inappropriate fishing craft and gear and the lack of properly trained seafarers who can venture into the deep sea have hindered the optimal exploitation of marine fishing.
The International Convention on Standards of Training, Certification and Watchkeeping for Fishing Vessel Personnel, 1995 (STCW-F 1995) came into force on 29 September 2012 and sets certification and minimum training requirements for the crews of seagoing fishing vessels of 24 metres in length and above.
In 2018, the then Agriculture Cabinet Secretary, Mwangi Kiunjuri, said Kenya was losing over Sh440 billion annually by failing to fully exploit the blue economy.
For maritime training institutes worldwide, the International Maritime Organisation (IMO) has developed a series of model courses that provide suggested syllabi, course timetables and learning objectives to assist the instructors to develop training programmes to meet the STCW Convention standards for seafarers.
Out of the over 30 courses offered in maritime training—as recommended by IMO—BMA, the leading maritime institute in Kenya, could only offer 6 by 2021. In addition, BMA suffers a shortage of training personnel and lacks shipboard training opportunities because seafarer training in Kenya is in its infancy, which has caused delays in the completion of training courses since shipboard training is compulsory in order for one to be certified.
An integral part of the sea training programmes is to ensure that students gain practical knowledge through actual work experience. One has to learn by doing while at sea and in port.
Lack of capacity to venture into the high seas and lack of fishing gear has, therefore, abandoned deep sea waters to Distant Water Fishing Nations (DWFN) which mainly fish tuna species. Kenya lies within the rich tuna belt of the West Indian Ocean, where 25 per cent of the world’s tuna is caught. Foreign fishing fleets can operate in Kenya’s Exclusive Economic Zone (EEZ) under the provisions of regional and international agreements and the National Oceans and Fisheries Policy.
Seafaring to supply a growing global demand is another opportunity a well-prepared Kenya could exploit. We can learn from the Philippines which by 2016 had over 37 maritime academies, 20 maritime training centres and 17 crew manning agencies, enabling it to supply 20 per cent of the world’s seafarers.
In a deal President Ruto’s administration has threatened to recall, KNSL has partnered with the Mediterranean Shipping Company (MSC) of Italy, in what it described as a government-to-government arrangement that would see the government retain the majority shareholding (51 per cent) at KNSL to turn it into a major national carrier and offer seafarers jobs.
The deal was also supposed to allow the MSC to run the second container terminal (CT2) at the port of Mombasa, which is causing jitters in the Ruto administration since he said it was not competitively awarded, with the shipping line required to hire 2,000 seafarers every year for the next five years to work in its cruise ships. MSC is the only shipping line that is in both the cargo and the cruise business.
Seafaring to supply growing global demands is another opportunity a well-prepared Kenya could exploit.
The KNSL and MSC deal was supposed to help Kenya gain entry into ship ownership. Transport charges paid out to shipping lines calling at Mombasa port are estimated at about KSh304 billion annually.
Neighbouring Ethiopia, a landlocked country, has already acquired several ships. The country has decreed that all cargo bought by the government must be shipped using these vessels. Liberia—which ranks number one based on the number of ships on its register, coming second to Panama on revenues earned—is a successful example that Kenya could emulate.
The National Treasury issued a directive to enforce Section 20 of the Insurance Act in 2017. This section requires the compulsory purchase of Marine Cargo Insurance (MCI) from local underwriters. However, importing cargo on Cost Insurance Freight (CIF)—as we largely do, due to a lack of proper coordination between various agencies—has made enforcing this requirement an immense challenge. Kenya currently repatriates over KSh20 billion in premiums to foreign underwriters. Claims of undercutting have also rocked the MCI insurance business as a record number of players has entered the segment, with the Insurance Regulatory Authority (IRA) cautioning that the rates are not sustainable.