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South Sudan looks at Djibouti as an alternative to the Mombasa port

South Sudan authorities have reported to have bought 12,000 square meters of land in the Doraleh port area in Djibouti for the construction of a logistics facility to handle import and export goods in an effort to find an alternative to the port of Mombasa. The land was initially procured by the South Sudanese Ministry of Petroleum for the purpose of exporting the country’s crude oil, but the country intends now to use it for storage of imported goods destined to its territory. However, the main challenges is the road connectivity, as there are no roads suitable to trade that currently connect the countries through Ethiopia.

As a landlocked country, South Sudan relies on seaports located in its coastal neighbors for channeling its import trade (the country imports almost everything from abroad, while its exports are extremely low, despite its enormous agriculture potential, as South Sudan holds among of the richest agriculture areas in Africa with fertile soils and abundant water supplies). Mombasa port is the main route for all consignments destined to South Sudan, accounting for 9.9 percent of transit volumes handled by this port (corresponding to about 1.1 million tonnes of cargo handled annually), so representing the second port's client after Uganda (83 percent). Once arrived to Mombasa, cargo is mainly transported to  Juba by using the Northern Corridor, transiting through the border posts of Malaba and Nimule in Uganda.

The announcement by South Sudan comes just a few days after Kenya issued a directive for all inbound cargo to be cleared in Mombasa. However, rumours about the intention of South Sudan to increase the use of the Djibouti port circulated on East African press already at the beginning of July. Although the Presidential decision has been positively welcomed by the business community in the coastal city of Mombasa as a solution aimed at putting a brake to the closure of warehouses and Container Freight Stations (CFS) in Mombasa as well as to the hemorrhage of clearing and forwarding services to Nairobi and Naivasha caused by the previous presidential order establishing a mandatory transfer of cargo through the Standard Gauge Railway (SGR) to Nairobi, it will probably increase delays (and costs) for cargo destined to South Sudan and Uganda. The reason is that such cargo will not benefit anymore from a deferral of customs clearance at the Naivasha dry port, as clearing procedures will need to be carried out at the port of Mombasa, where clearing time is notoriously longer because of congestion.

Similarly to ports, dry ports, also known as Inland Container Depots (ICDs) or as Container Freight Stations (CFSs), are multimodal facilities where goods can be loaded or unloaded from trucks and/or trains, and shipped to other destinations via other means of transport. Their main aim is to decongest seaports by shifting customs, logistics services and cargo handling activities (e.g. clearing, storage, consolidation, stripping and stuffing of containers) to inland terminals that can be located both into the territory of the same State where the seaport is established (that normally serve the hinterland and its landlocked neighbors) or in an adjacent country. Once cargo is discharged at the seaports, it is shipped to the dry port under a customs bond in suspension of customs duties and other taxes, that are collected directly at the dry port once the cargo arrives.

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