Transport

SGR could help East Africa achieve free trade dreams

SGR

Building of standard gauge rail bridge piers at man-eaters section in Tsavo. PHOTO | FILE

Imagine waking up to find the six East African countries have fully integrated their markets.

A trader is able to move goods freely and a fully implemented common market protocol guarantees right of establishment in any of the member states. Sounds like a dreamland utopia already?

Now imagine the integrated market is being served by three world class seaports — one in Mombasa, another one in Dar es Salaam and the region’s newest and largest one in Lamu.

Since you’ll be waking up in Kenya at the end of the dream, let the old Mombasa port be the harbour of your interest.

Having become a world-class facility, goods are being cleared fast. There is neither congestion nor threat by any agency to auction uncollected goods.

For Kenya, the most advanced of the integrating states, ease of input flow into the region imply that local manufacturers are able to produce and export world-class goods as well. And so it has markets across the globe!

But our dream is a local one. So Uganda remains top market for Kenya’s exports and investment capital. There is 1,300km standard gauge railway (SGR) connecting Mombasa port to Kampala.

Business people are free to move at speeds of up to 120km per hour to any of the destinations served by the upgraded track.

A single currency in circulation ensures traders do not have to stop at Busia or Malaba border points just to exchange money.

The bloc already has a common revenue agency that collects customs taxes at region’s entry points only. And since national agencies trust each other, there is absolutely no need to recheck goods and people already cleared in Kenya.

The dream becomes sweeter as all the slow-paced trucks — known to congest and destroy our roads — are replaced by fast-moving cargo trains that cover the whole distance in just 16 hours.

Elsewhere, the region’s combined economy — now estimated at Sh14.7 trillion ($147.4 billion) — has tripled and continues to grow at seven per cent annually.

Finally, the cost of production has fallen sharply in all the landlocked states thanks to port and border efficiencies.

Well, that must have been the dream that Kenya’s Daniel arap Moi, Tanzania’s Ali Hassan Mwinyi and Uganda’s Yoweri Museveni shared when they first met in 1993 to discuss efforts to revive East Africa’s stalled economic integration.

The reality 23 years later is something else. The market integration bit is only 40 per cent complete. Most of the free-market protocols remain unimplemented.

No single regional agency has been formed to collect customs revenues or manage regional facilities such as railway, airways and harbours.

At the current state of integration, a properly functioning railway system is key to unlocking the region’s production bottlenecks.

Yet all that Kenya and Uganda have done over the years is to recruit a joint concessionaire to run the old railway line that the British built more than 100 years ago. The two states continued to flip-flop in efforts to upgrade the old tracks.

This year alone, Uganda has given conflicting signals as to whether it really intends to connect its economy to Kenya’s seaports.

As our cover story indicates, however, all is not lost. The two countries have secretly agreed to extend the Mombasa Nairobi SGR to Kampala.

Going by several experts’ accounts, the SGR can only give bloc maximum economic dividends if it runs full length from Mombasa through to Kampala, Kigali and Bujumbura.