Trade facilitation infrastructure set to redefine northern Uganda prospects.

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Graphical Impression of the Gulu Logistics Hub masterplan. The project will be completed in next 3 years.

Nicholas Kalungi.

The havoc that the over two decades-long Joseph Kony-led Lord Resistance Army (LRA) war left in northern Uganda was massive.

To some, it is one that has had permanent scars on the region and it will for a long time be remembered as the worst thing to have ever happened to that part of the country and Uganda as a whole.

According to a report by The Guardian, the rebel outfit, at its peak, displaced nearly two million people in areas within and around northern Uganda.

“By 2007, the conflict had seen more than 10,000 people massacred, while twice that number of children [had] been abducted by LRA and forced to work as soldiers, porters and sex slaves,” the report says.

However, around 2005-6 normalcy had started to return after the Uganda People’s Defence Forces (UPDF) flashed the stubborn and now scampering LRA outfit out of the region into the jungles of DR Congo, Central African Republic and parts of South Sudan.

To date, the rebel outfit is still holed up in the jungles far away from our borders and security agencies have indicated it has been greatly weakened with no capacity to mount another insurgency or conduct raids within Uganda.

An internet map showing the northern region of Uganda – highlighted in red.

Therefore, this has given northern Uganda the space to pick up the ruins with key sectors such as health, transport, education and tourism showing a fair share of growth.

Beyond this, small and medium businesses have built back to become profitable. Safe cross border trade has also returned.

Even more interesting, the return of peace has boosted trade with South Sudan; the second biggest destination of Uganda’s exports in the East African region. According to statistics from the central bank, Uganda in the 2017/18 financial year alone exported goods worth USD 311.34 million to South Sudan compared to USD 14.54 million of imports from the same country.

However, notwithstanding the positive strides, the northern region which is an engine of the northern trade corridor, serving as links to South Sudan and parts of eastern DR Congo, has remained undeveloped.

The northern trade corridor directly serves six countries – Kenya, Uganda, Rwanda, South Sudan, Burundi and parts of DR Congo, with 3 of them bordering the northern region thus underscoring it as an importance trade hub. Therefore, one would imagine what it would deliver if there are incentives to make trade better.

Map showing the complete northern trade corridor.

The good news is that this underdevelopment might become a thing for the past if all the ‘set in motion’ trade facilitation projects and other initiatives for this region are completed.

It is expected that before the end of 2022, northern Uganda will have an efficient 24 hours open one-stop-border-post (OSBP) linking Uganda to South Sudan. The region will also have a new and effective metre gauge railway and a modern logistics hub facility.

All these projects are to be developed from a pool of resources raised by the government of Uganda, Trademark East Africa, the United Kingdom’s Department for International Development (DFID) and European Union (EU).

In essence, the three pivotal projects mean northern Uganda and the country at large will not be the same in terms of development.

Elegu/Nimule One Stop Border Post (OSBP).

As part of the East African region’s sustained efforts to facilitate trade, over 10 OSBPs have been constructed across East Africa since 2013 with funding from national governments, and the United Kingdom’s DFID through TradeMark East Africa.

An OSBP is a border facility that consolidates border control functions in a shared space for two countries bordering each other thus enabling faster entry and exit of people and cargo.

The latest beneficiaries of this OSBP program are the local community, traders and tourists plying the Elegu/Nimule route.

Construction of the Elegu-Nimule OSBP is underway. The Ugandan side (Elegu) is ready and will be handed over to Uganda Revenue Authority – URA this month.

“As the main gateway into South Sudan from the port of Mombasa, the Elegu-Nimule border post is of strategic importance to the East African region. The border is extremely slow, and Nimule takes an average of four days to process imports,” notes a report from the TradeMark East Africa website.

The statement which also highlights the costs such delays impose on traders, seeks to show why it is important to construct such as facility at Elegu/Nimule.

“These delays can be attributed to inadequate border infrastructure, insufficient quality and quantity of technical equipment, poor border design, and complicated procedures based on centralized control, and multiple border organisations working in isolation,” the report further says.

Different surveys conducted since the OSBP concept was rolled out in the region indicate that the average border crossing time for cargo trucks and travellers has at select borders reduced by between 30 and 90 per cent, significantly prevented harassment of cross border traders by officials and reduced corruption at the borders.

Therefore, it is expected that on completion and consequent commissioning, the Elegu/Nimule OSBP will contribute to the ‘ease of doing business in the region’ by delivering similar benefits like the other OSBPs are doing at other entry and exit points.

Ms Damali Ssali, the Ag. Country Director TradeMark East Africa, Uganda addressing the media at a recent press briefing.

In a recent interview, Ms Damali Ssali, the Ag. Country Director TradeMark East Africa, Uganda confirmed that the Elegu border (Uganda side of the OSBP) was complete with a technical handover slated for 15th November 2018 while works in Nimule (South Sudan side of the OSBP) had stalled following recurrence of pockets of instability in the area.

“Elegu border construction has been completed. The building will be handed over to the Uganda Revenue Authority which is the lead agency at the border in November.  For Nimule, due to the crisis is South Sudan, construction of the refugee reception area is underway. When peace returns in South Sudan, and funding is available, the Nimule border will be fully constructed,” Ms Ssali noted.

Tororo-Gulu Railway.

On October 17, 2018, the EU accepted to finance the rehabilitation of the over 400kms Tororo-Gulu metre gauge railway.

The works are expected to start before the end of this year and will be completed before or by 2022.

The railway line has been out of service since 1993 due to neglect and the prolonged LRA war in northern Uganda.

As part of this commitment, the EU has agreed to disburse a grant of EUR 21.5 million (about UGX 93 billion) from the European Development Fund (EDF) while the Government of Uganda will contribute counterpart funding equivalent to EUR 13.1 million  (about UGX 60 billion)  towards the rehabilitation of this key transport infrastructure in the region.

European Union Team Leader Ambassador Attilio Pacific and Minister of Finance – Hon Matia Kasaija exchange files after signing the Tororo-Gulu Railway Revival Grant.

“We are proud to support the Government of Uganda’s decision to revitalise this crucial economic link,” EU Head of Delegation to Uganda, HE Ambassador Attilio Pacifici said, noting that this project was part of the many actions taken by the European Union to support northern Uganda.

Such actions include the recently launched EURs 150 million Development Initiative for Northern Uganda (DINU) as well as the provision of humanitarian assistance to refugees and support to the host communities.

Honourable Matia Kasaija, the Finance minister noted that the Tororo-Gulu metre gauge railway rehabilitation project is important for trade facilitation for Uganda and “will open up northern Uganda, parts of DR Congo and South Sudan in terms of freight.”

During its days of service, the Tororo-Gulu railway line was a crucial economic facility along the East African Northern Trade Corridor linking the port of Mombasa and eastern Uganda to northern Uganda, as well as to South Sudan and DR Congo. It is expected that it will serve the same purpose or much more once it is completed.

Furthermore, the planned revamp of the Tororo-Gulu railway is timely considering that the realisation of Uganda’s Standard Gauge Railway (SGR) dream may take longer than earlier anticipated. This sad reality comes at the back of China’s delayed approval of finances for the construction of the Kenya Kisumu to Malaba SGR line which is a must if Uganda is to make any progress.

The unfortunate development was revealed by Hon Matia Kasaija who recently told Daily Monitor, a local newspaper that government has ‘put on hold’ the SGR venture and has instead turned attention to revamping the old metre-gauge railway network until unresolved issues with Kenya and China have been concluded.

“It is apparent the SGR is going to take us a lot of time to complete. First, we have to wait for Kenya to reach at the Malaba [border] point then we can start,” Mr Kasaija noted.

But in a quick rejoinder, Hon Monica Azuba Ntege, the minister of works and transport noted that reports appearing in a cross section of the media alleging that Uganda had abandoned the SGR project were false and unfounded.

Hon Azuba noted that Uganda was firmly committed to the project and had already awarded a consultancy and construction tender for the same. She added that the country was now making steps towards signing a loan agreement with Exim Bank of China before rolling out the project.

Minister of Works & Transport, Hon Monica Azuba Ntege monitoring SGR alignment in Malaba where Uganda & Kenya SGR will interchange.

“Some 90 per cent of cargo comes to Uganda by road and this has really increased our road maintenance costs which we know shall come down drastically once the SGR is in place therefore we cannot afford to abandon the project,” Hon Azuba said as quoted by Daily Nation, a Kenyan newspaper.

But as it stands, the realization of either one or both projects works well for country.

Gulu Logistics Hub.

Jointly funded by EU, Government of Uganda and DFID through TradeMark East Africa to a tune of USD 8.8 million; works on the over the 22-acres Gulu Logistics facility are scheduled to start in January 2019 and will be completed by 2021.

On completion, this freight and logistics facility will have a spacious container yard, container freight station (CFS), container cleaning and repair station, a vehicle holding section, an access road connecting the hub to the main road and an administration complex.

Photo impression of the proposed Gulu Logistics Hub.

The Gulu Logistics hub will also have a railway sub-station; directly connected to the Tororo-Gulu metre gauge line, which will receive and dispatch in and outbound trains in addition to having sufficient space for loading and unloading wagons.

Important to note, since the end of the war in northern Uganda and the return of relative stability in South Sudan and eastern DR Congo, Uganda has been playing a vital role as a distribution hub for the two areas.

A team from TradeMark East Africa standing next to where the Gulu Logistics Hub will be connected to the Tororo-Gulu Railway. This will enable trains to directly access the logistics hub for loading and offloading purposes.

According to a World Bank study – Uganda Diagnostic Trade Integration Study – importers in South Sudan and DRC keep supplies in bonded facilities in Kampala before bringing them into either country as and when needed.

However, with the assurances of shorter lead times, Uganda has seen transit volumes grow, which has led to the emergence of a distribution industry especially in Jinja and Kampala.

Nonetheless, the over dependence on Kampala and Jinja distribution hubs which sit some 334kms and 388kms away from Gulu respectively and sometimes opting for goods moving from as far as Mombasa Port directly to northern Uganda, South Sudan or eastern DR Congo, continues to have its own shortfalls.

Key among these is supply shortage and scarcity caused by delayed deliveries and accidents occasioned by fatigued cargo drivers.

Therefore, the construction and consequent ‘operationalisation’ of the Gulu Logistics Hub is expected to address these issues that continue to hamper the seamless distribution of cargo in northern Uganda, South Sudan, and parts of DR Congo.

While addressing delegates at the September 2018 Global Logistics Convention in Kampala at Sheraton Hotel, Mr Adrian Green, the Head of Growth and Economic Management at UKAid, described the logistics sector as the fuel that drives economic growth and committed on behalf of development partners to continue supporting it.

Adrian Green, Head of Growth and Economic Management at UKAid

“Sustainable development is directly linked to how the logistics sector facilitates trade. Perhaps for too long, development partners have over looked this and focussed on rural development and ignored that we need to focus as well on logistics and transportation. As development partners, we recognise the critical importance of this sector and would like to help address the key challenges it faces,” Adrian Green said.

To employ Hundreds and benefit Millions.

At the construction stage, these projects are expected to employee at-least 5000 people including over 80 per cent local residents while after completion they will directly and indirectly benefit millions.

Uganda’s 2014 population census showed that the northern region had about 7.2 million people. South Sudan has a population of about 15.6 million people while Eastern DR Congo has more than 5 million people.

Gulu Logistics Hub (GLH) implementing partners after a successful site visit & community engagements on 25th September, 2018.

According to Ms Damali Ssali, the infrastructure projects that are being implemented in northern Uganda will further cement Uganda’s status as a distribution hub owing to its natural geographical location.

“Uganda’s economic development is premised on increased exports and job creation. Northern Uganda is a gateway to Uganda’s export and re-exports to markets in South Sudan, DRC, Central African Republic and North Western Kenya. Therefore opening up this trade route with key trade facilitation infrastructure does not only catalyst the creation of jobs (through exports if products manufactured and/or cultivated in northern Uganda) but also re-exports.”

DINO makes the projections even more interesting.

The implementation of these projects gels well with the over 150 million EURs ‘Development Initiative for Northern Uganda’ (DINU); a government of Uganda integrated programme that is being implemented in over 33 districts of Acholi, Karamoja, Lango, Teso and West Nile for a duration of six years (2017-2023).

Supervised by the Office of the Prime Minister (OPM), DINU is financed by Government of Uganda (11.954 million EURs), EU (132.8 million EURs), DFID (2.67 Mio EUR), the Federal Republic of Germany (1.8 million EURs), UNCDF (0.352 million EURs) and UNICEF (1.056 million EURs).

To the people of northern Uganda, these developments are a welcome relief that will partly heal decades of suffering and perceived neglect.

“The future looks bright for us. We have been told that much of the funding for these projects has already been secured. We are optimistic that after the dark days, our region is picking up and many of us will get employed. We can only wait and see,” Carol Adokorach, a resident of Gulu district said.

Further, expectations are high at all levels that these projects combined will not only improve the efficiency of Uganda’s trade but also attract more foreign direct investment (FDI).

It remains to be seen how much an impact these projects will have on communities in this region. However, for now, northern Uganda can toss to greater times ahead.