SGR success will be gauged on growth of rural economies

Kenya is keen to strengthen its trade links with the economies around East and Central Africa.

As an economy yearning to emerge, it has not shown sustainable economic growth that will enhance the progress in reducing poverty by increasing incomes - in particular for low income groups in both rural and urban areas - strengthening social welfare, and improving the economic environment.

Trading needs to expand, financial markets need more integration and majorly, advancements in communication and transportation systems must be upgraded.

As the backbone of international trade, logistics encompasses freight transportation, warehousing, border clearance, payment systems etc.

Despite these functions being majorly performed by private service providers for private traders and owners, logistics has an obligatory role in public policies of national governments, regional and international organisations.

Building infrastructure, developing a regulatory regime for transport services and designing and implementing efficient customs clearance procedures are all areas where governments play an important role.

The standard gauge railway (SGR) is already snaking its way along the northern transport corridor that ends in Rwanda via Uganda, from Kenya’s port of Mombasa. Its tentacles will tangent into South Sudan and Democratic Republic of Congo.

This will strengthen both Kenya’s strategic geo-political positioning and its gateway functionality. So what does this magnitude of infrastructural development mean to the rural folk where it will traverse? Will they be able to do any better business, if at all start any?

Seldom has any governor or member of county assembly, whose county is on the SGR-route talked about how his people should benefit from the railway.

It is time for the rural and urban folk alike to hear talks about functional regionalism - an integrated system of relations, particularly around transportation nodes, etc.

READ: Posta taps SGR to cut cost of ferrying parcels

A regionalism of freight distribution will facilitate the integration of gateways, corridors, hinterlands, regulations, governance, value chains and labour. A gateway like Mombasa (or Lamu) should embody the essential structure between regional and global transport systems.

Significant logistical clusters with growth of terminal infrastructures e.g. freight distribution centres, rail terminals etc. is what county governments should be planning for at this point in time.

The regionalisation of the ports of Mombasa and Lamu for example, will accentuate the rise of new relations between port terminals and their hinterlands with creation of inland ports (Kisumu, Mwanza etc.) and distribution services to the agricultural and horticultural hinterlands of rural Kenya.

It is through such maritime-land interfaces that functional regionalism is shaped, via the growth of terminal infrastructures that reach out to the rural folk who need it most.

The county governments need to enhance logistics environment that will spark the growth of logistics and industrial clusters along the transport corridors in their rural areas. This will see trans-loading activities and load-centres sprouting along nodes.

The additional trans-loading costs will be compensated through consolidation of inland loads, with the effect of anchoring an added value function at the gateways etc. Ultimately, a lot of time will be saved with improved delivery speeds and overall reduced costs.

Jack Bwana is Trade, Logistics & Supply Chain Consultant.