Faced with growing transport challenges including over usage of trade routes by heavy trucks, limited transport alternatives and impassable roads occasioned by heavy rains and floods; Uganda’s economy is ‘at a crossroads.’
Uganda’s only option is to adopt a multi-modal transport system that allows all the four transport modes to operate, supplementing each other.
This recommendation is contained in a recent Cost Effective Rail Freight Logistics report released at the end of last week at Sheraton Hotel, Kampala.
Funded by TradeMark East Africa and Ministry of Works and Transport, this Rail and Logistics report was developed by CRISIL Risk and Infrastructure Solutions Ltd, India, together with Africa Economic and Social Development Consultants, Kenya.
Being a land-linked country in east Africa, Uganda is significantly dependent on regional transportation systems for international trade. The transportation system in the region comprises two major transport corridors: Northern corridor – connecting Uganda to the port of Mombasa in Kenya and Central corridor – connecting Uganda to the port of Dar es Salaam in Tanzania
Currently, international trade in Uganda is served primarily by the Northern Economic Corridor. Although it is also connected to the international markets through the Central Corridor, linking it to the Port of Dar es Salaam in Tanzania, majority of its exports and imports (~96%) takes place through the Northern Corridor.
Speaking at the release of this report, Diana Karimba, the National Logistics Platform Coordinator noted that while Uganda is a land locked country, it is also blessed to be at the heart of the great lakes region, putting it at the center of trade within the East African region.
“Uganda offers the cheapest labour and power in the region. However, our cost of transport and logistics is still very high compared to our coastal partner states. This is partly because of the poor infrastructure, connectivity and policy environment,” Diana Karimba noted, adding;
“The vision of transforming Uganda into the regional Distribution Hub is achievable and the Ministry of works commissioning a team to undertake a Cost effective rail freight logistics study is a step towards the right direction. We would like Uganda to be the home of the biggest freight logistics companies in the world. With the signing of the AfCFTA, the time is now to position ourselves.”
Even so, Sandra Kirenga, the Programs Manager at TradeMark East Africa, Uganda noted that the report comes at a time when Uganda is dealing with a situation of moving cargo from rail to road and to rail again which will increase time and costs involved.
“The B3 road is not a major transit route and there will be congestion. The key message here is for Uganda to push for expansion of the B3 road and seek exemption that transit cargo does not have to use the SGR.” Sandra Kirenga said.
She added: “We at TradeMark EA are willing to support both the Government and Private Sector to undertake more efforts aimed at improving the sector. I thank Ministry of Works and Transport for leading this exercise and establishing a steering committee to guide the process.”
Over the past few years, there have been multiple developments on both the Northern and Central Corridors to strengthen infrastructure and connectivity. Various projects are being planned and implemented on both corridors, with the development of standard gauge railways (SGR) being one of the major advances. Notably, the SGR section between Mombasa and Nairobi is currently operational and is being further planned to be extended to Uganda via Naivasha and Kisumu.
On Uganda’s side, there are plans to rehabilitate Meter Gauge Railways (MGR) sections and upgrade to SGR, aiming to provide the region a homogenous, high capacity, and efficient railway infrastructure.
On the Central Corridor, too, multiple projects are under implementation to remove the infrastructure bottlenecks and enhance its competitiveness for trade. Among the major projects, the development of SGR between Dar es Salaam and Mwanza Port on Lake Victoria is considered to be an inflexion point, which, along with the development of the state-of-the-art intermodal port Bukasa port in Uganda, is expected to enhance competitiveness of this corridor for trade.
On behalf of government, RoseMary Tibiwa – Commissioner Transport Services and Infrastructure at the Ministry of Works and Transport noted that it is government’s policy to develop and provide efficient and effective transport services and infrastructure to spur the economy.
“In the past, water transport was very effective. How do we revive it to move back to the levels it was at in the past? We can’t have any economic development without a sustainable and effective transport system. The Ministry of Works plans to develop modern and cost effective / efficient rail freight corridors in Uganda.” Commissioner Tibiwa explained.
With the report containing strong and clear recommendations, it remains to be seen how soon Uganda will adopt and implement it.