Mombasa County’s government recently launched its ambitious urban development plan, Mombasa Vision 2035, to boost infrastructure, industry and investment in the county and transform it into a major regional commercial hub. County Governor Hassan Ali Joho explains Mombasa’s transformation under way, its advantages for businesses, and the sectors that are ripe for investment now.
How has the devolution since 2013 transformed Kenya and brought services, resources and power closer to the people of Mombasa?
Kenya’s decentralization is among the most rapid and ambitious devolution processes going on in the world, and it was demand driven in order to achieve higher economic growth. Elections in March 2013 marked the official launch of decentralization, as 47 new county governors and county assemblies were elected and began the challenging work of setting up new institutions, as well as a new national senate representing each county.
The referendum, which was held in 2010, showcased to us that these communities were looking for new opportunities, and the best way to achieve this was to change the governance structure by bringing power closer to the people. Of course we have had our own challenges since 2013; we had to build local capacity and a new governance system, but even then we saw people and local governments taking more pride and pushing the boundaries to achieve new heights.
One of the pivotal benefits in that was the fact that we could move decisions that were made in Nairobi and localize them, making implementation more efficient. This paradigm shift was a game changer for Mombasa; it lifted many restrictions and provided an opportunity to do more in terms of service delivery, efficiency, and even creation of opportunities. This meant we could directly encourage and communicate with investors, promote a destination, create support infrastructure for growth, and make regulatory improvements for the business climate and ease of doing business.
As Mombasa County, we have focused ourselves on ensuring that we anchor legislation locally that moves in tandem with the new constitutional order and the demands of the people. Mombasa has over the period seen tremendous contributions made in terms of what needs to be done through the new governance structure.
What makes Mombasa a hub for the EAC and how are you evolving to compete?
Mombasa, with its strategic location between South Africa and the Gulf of Aden, is uniquely positioned as a transportation and industrial hub for East and Central Africa. In comparison to our neighbors, we are already an established logistics hub connecting Kenya and East Africa to the rest of the world. We have the largest port in the region; it has the capacity to handle over 20 million tons and 1 million containers per annum.
Mombasa Port over the years has experienced unprecedented growth, with shipping activity rising by 11% in the first half of 2015 as the vessel wait times fell. The rapid volume growth came as the port continues with a wide-ranging expansion that includes dredging, new container terminals, and a rail yard.
For us the focus now is to see how best we can deal with diversifying our economy as a county. We boast a population of over 1.2 million people, making it the second largest city in Kenya, and a huge population corridor. We have an extensive labor force with 96% functional literacy rate, which the county is trying to utilize in order to become a manufacturing center for the region.
How is the county, along with the national government, providing hard infrastructure to create a more conducive environment for businesses?
Mombasa Port’s infrastructure development over the years has had a positive impact on the county’s infrastructure, however the Kenyan government and its international partners, such the UK, Japan and China, are demonstrating their confidence in Mombasa’s strategic position with ambitious infrastructure projects under way to ensure effective transportation routes between Mombasa and its neighboring regions.
A 50km stretch of the Mombasa-Nairobi highway is being upgraded to a six-lane dual carriageway to remove the bottleneck from the port and Mombasa’s industrial areas. A bypass is under construction that will take traffic from Nairobi highway and Moi International Airport to Dongo Kundu SEZ on the southern mainland, cutting out the need to travel through the busy city center. Completion is expected in 2018.
The multibillion-dollar construction of the standard gauge railway, which will run from Mombasa via Nairobi to Kampala and onto Rwanda, is ongoing. Completion is expected in 2017, when freight time to Nairobi will be eight hours and passenger transport four hours.
Moi International Airport has two terminals, scheduled flights to Addis Ababa and Istanbul, and charter flights to Germany, the UK, Italy, as well as multiple daily flights to Nairobi and other domestic destinations. The access road to the airport is also being upgraded to a dual carriageway.
The county government in April has introduced its Mombasa Vision 2035 (MV 2035), where the core pillars are to develop infrastructure, special economic zones, the redevelopment and renewal of the county’s real estate in order to create affordable and sustainable housing for our growing population, construct modern sporting facilities, further enhance the education system, and rehabilitate our healthcare system. MV 2035 will serve as the framework to propel Mombasa as a leader in the region.
Could you please discuss the key investment opportunities available that local and international companies can be part of?
Mombasa County has recently introduced the Mombasa Invest agency in order to facilitate foreign and local investors with vital information and ongoing business development support. The agency has set certain priorities outside the tourism sector to flourish manufacturing, industrialization and the infrastructure of the county.
A key sector that is attracting investors in Mombasa County is the real estate and construction sector. There is great demand for better housing as the middle class rises. We already boast a well-developed construction sector: around 40 reputable contractors, eight technical training institutes offering courses relevant to the sector and the National Construction Authority and National Housing Corporation offices. Recent iconic construction investments in Mombasa have included the state-of-the-art English Point Marina and The Shaza Beach Resort.
Another lucrative investment sector is industrial fisheries, where Kenya boasts 640km of coastline; around 25% of the $2-3 billion global tuna catch is caught in this area. A catalytic investment is needed, including a fish sorting plant and a 15,000 metric ton cold-storage facility, in order to create a transformative fisheries value chain which will include fish processing and canning, fertilizers and animal feeds.
Mombasa is ideal for apparel manufacturing due to its proximity to the port. The sector in Mombasa dates back to the early 1990s; it is now home to around 60% of Kenya’s apparel manufacturers. Since 2010, exports have grown at a rate of 17% per annum. Kenya is now one of the largest apparel exporters under the Africa Growth and Opportunity Act (AGOA), which has recently been extended for an additional 10 years.
Lastly, Mombasa County is constantly working to expand its incentives offer for local and international markets, we have the largest concentration of export processing zones in Kenya and home to the Coast Region EPZ Authority, which is working on Kenya’s first 3,277-acre special economic zone.
With new infrastructure in place and new connectivity, it makes more sense to establish your business in Mombasa, in comparison to the rest of country. With an improved ease of accessibility and a new improved port, we can serve the rest of the world.
Bearing in mind Mombasa is going through a transformation and diversification of its economy, tourism still remains a key pillar for the county. How is the County Government making Mombasa appealing for international travelers?
Mombasa is the bedrock of the Kenyan tourism industry, with a high annual influx of domestic and foreign tourists. Over the past years, the numbers have declined due to certain travel advisories; however, over the course of 2015 we managed to turn the tide through increasing security and ensuring the safety of our visitors.
There are strategic factors that will play a key role in ensuring the growth of the tourism sector in Mombasa County. Conference tourism, marine-based tourism, hotel investment and eco-tourism are some of the options that we are working on deploying. In early 2016, we have opened the only one of its kind marina between Cape Town in South Africa and Cairo in Egypt – the English Point. It is a major endorsement of the recovery strategy of the country’s tourism and hospitality industry, which heralds good tidings for the sector.
Mombasa Port was recently voted Africa’s Leading Cruise Port 2015 at the World Travel Awards (WTA) and also nominated for the 2015 World Leading Cruise Port award. We see this sector gaining strong popularity, with more cruise ships arriving. Only in December we had six cruise ships arriving in Mombasa with more than 3,000 tourists and crew. According to the shipping schedule prepared by the Kenya Ports Authority, we expect the good fortune to continue during 2016.