Source: The East African
By Githua Kihara and Gitonga Marete (email the author)
The Merchant Shipping Act 2009 which was assented to by Kenya’s President Mwai Kibaki last month is expected to open the maritime industry to local and regional investors.
It marks a significant turning point in the numerous past attempts to streamline regulation of Kenya’s maritime transport sector.
The Act is intended to create a comprehensive and modern legal regime for merchant shipping in Kenya by replacing the outdated Merchant Shipping Act, 1967.
Kenya has been operating under the 1967 law which does not reflect major transformations in the industry globally, and which had locked out potential investors.
The Kenya Maritine Authority Director General Nancy Karigithu told The EastAfrican that the new law opened opportunities for investment in water transport, as the legislation recognises procedures for creating mortgages on vessels.
This means that entrepreneurs can now access funds from banks and other financial institutions to buy floating assets as processes for ensuring that the loans and the assets are secured are guaranteed.
The Act is a welcome initiative lauded by many industry players, as it provides for appropriate legislation to address maritime safety, security and training.
It also covers marine pollution prevention and the preservation of the marine environment; auxiliary shipping services; piracy and armed robbery that have become serious threats against ships in waters off the Coast of Somalia.
“It is of significance that provisions have been made in the Act to address competitiveness and efficiency of service delivery in the maritime sector, an area that has been a major problem to both local traders and consumers as well as the economies of the region that rely on the port of Mombasa,” said Ms Karigithu.
“Lack of modern laws has long caused problems for banks and business people who could not access such financing due to the lacuna in law and also lack of regulation in the industry for safety standards,” said Ms Karigithu.
A watercraft census and baseline survey carried out by the Kenya Maritine Authority last year revealed that there were 19,050 vessels operating in both coastal and inland waters of Kenya most of which are not registered and are therefore not controlled, leaving them to be misused by unscrupulous individuals.
Inefficiencies of trade facilitators may now be identified under the new law and in such a climate, pricing of transport should be rationalised to the benefit of the economies of the region.
It marks a significant turning point in the numerous past attempts to streamline regulation of Kenya’s maritime transport sector.
The Act is intended to create a comprehensive and modern legal regime for merchant shipping in Kenya by replacing the outdated Merchant Shipping Act, 1967.
Kenya has been operating under the 1967 law which does not reflect major transformations in the industry globally, and which had locked out potential investors.
The Kenya Maritine Authority Director General Nancy Karigithu told The EastAfrican that the new law opened opportunities for investment in water transport, as the legislation recognises procedures for creating mortgages on vessels.
This means that entrepreneurs can now access funds from banks and other financial institutions to buy floating assets as processes for ensuring that the loans and the assets are secured are guaranteed.
The Act is a welcome initiative lauded by many industry players, as it provides for appropriate legislation to address maritime safety, security and training.
It also covers marine pollution prevention and the preservation of the marine environment; auxiliary shipping services; piracy and armed robbery that have become serious threats against ships in waters off the Coast of Somalia.
“It is of significance that provisions have been made in the Act to address competitiveness and efficiency of service delivery in the maritime sector, an area that has been a major problem to both local traders and consumers as well as the economies of the region that rely on the port of Mombasa,” said Ms Karigithu.
“Lack of modern laws has long caused problems for banks and business people who could not access such financing due to the lacuna in law and also lack of regulation in the industry for safety standards,” said Ms Karigithu.
A watercraft census and baseline survey carried out by the Kenya Maritine Authority last year revealed that there were 19,050 vessels operating in both coastal and inland waters of Kenya most of which are not registered and are therefore not controlled, leaving them to be misused by unscrupulous individuals.
Inefficiencies of trade facilitators may now be identified under the new law and in such a climate, pricing of transport should be rationalised to the benefit of the economies of the region.
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