Kenya's Mombasa port traffic up 10 pct in 2012

* Port seen as indicator of economic activity in east Africa

* Kenya's landlocked neighbours dependent on east Africa's biggest port

* Work taking place on new $300 mln terminal to boost capacity

By Joseph Akwiri

NAIROBI, Jan 29 (Reuters) - Container traffic through Kenya's biggest port grew by 9.9 percent in 2012, boosted by an expansion programme, the port's management said on Tuesday.

The Indian Ocean port of Mombasa is also a bellwether for economic activity in east Africa as it handles imports such as fuel and consumer goods for Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia and exports of tea and coffee from the region.

However, fears of disruption during Kenya's presidential elections in March may hurt traffic over coming months as east African businesses seek alternative routes for their goods, port officials said.

"There is growing anxiety for the assurance of a smooth flow of business along the northern corridor during and after elections in Kenya," Gichiri Ndua, Kenya Ports Authority (KPA) managing director told journalists in Mombasa.

In the aftermath of Kenya's 2007 poll, ethnic violence across the country paralysed cargo transport and some landlocked east African states found themselves short on oil and other key provisions.

Ndua said some clients were rerouting goods through Tanzania's Dar es Salaam port, hoping to avoid what happen in 2008 when tons of cargo disappeared in transit during the post-election violence period. Much of it was lost to looting.

"We cannot foretell what this year will be like because that is depended on many factors especially the elections. If we do it peacefully, then we should expect a further increase of cargo throughout to over 10 percent by the end of this year," he added.

Kenya is building a $300 million second container terminal at Mombasa to handle increased trade within the region, driven by a sharp growth in construction, vast infrastructure development and an emerging middle class.

Although the new terminal is not officially open, dredging work to allow bigger vessels to dock at Mombasa port has been completed. A new deep-water berth had also become operational in 2012, boosting traffic.

The port handled 21.92 million tons of cargo in the 12 months to the end of December 2012, up from 19.95 million tons handled during the same period in 2011.

Imports made up 85.5 percent of all traffic volume, "reflecting a huge imbalance of trade", Ndua said. Total imports grew by 10.6 percent, posting 18.73 million tons in 2012 from 16.9 million tons in 2011.

Exports, which included tea, increased by 9.2 percent, to 3.04 million tons in 2012 from 2.79 million tons in 2011. Container traffic went up by 17.2 percent to 903,443 twenty-foot equivalent units (TEUs) in 2012, up from 770,804 TEUs handled in 2011.

Landlocked Uganda remains the most frequent destination of goods arriving in Mombasa, Ndua said, taking up 73.1 per cent share of the total transit traffic from the port.

The east Africa nation also plans to construct a second port in Lamu, north of Mombasa, with a capacity of 23 million tonnes per year. (Editing By Drazen Jorgic, Ron Askew)