Ugandan President Yoweri Museveni, in a white hat, on a tour of the
Mombasa port. He is flanked by Kenya’s Transport CS James Macharia and
Mombasa governor Hassan Ali Joho at berth number 20 on March 28, 2019.
PHOTO | LABAN WALLOGA | NMG
Kenya and Uganda raised the stakes in East Africa’s
infrastructure development race after Nairobi offered Kampala land to
construct a dry port in Naivasha, 100km west of Nairobi, where the
second phase of Kenya’s standard gauge railway line terminates.
Kenyan
President Uhuru Kenyatta made the offer in Mombasa on Thursday during a
meeting with Uganda’s Yoweri Museveni who was on a three-day tour of
the country.
“We have agreed that we shall make land
available in Naivasha for Uganda to develop a dry port for its cargo,”
President Kenyatta announced, adding that the railway will have reached
Naivasha by August.
Besides giving impetus to the joint
railway project, the land deal is seen as President Kenyatta’s effort
meant to lock Uganda into the project, whose fate appeared uncertain in
the wake of Kampala’s recent dalliance with Tanzania.
In
2017, President Museveni upset East Africa’s balance of economic power
when he abandoned an earlier agreed plan to jointly build an oil
pipeline with Kenya in favour of one through Tanzania.
A
recent diplomatic spat between Uganda and Rwanda that has since seen
the two landlocked states close their common border appeared to make
things even worse for Kenya.
Rwandan President Paul Kagame visited Dar es Salaam last month
in the heat of the diplomatic spat with Kampala, a move that was seen as
a firming up of diplomatic ties and to ultimately deepen Rwanda’s use
of Tanzania as its main route to and from the sea. That would leave
Kenya’s Mombasa port as the big loser.
Diplomatic cold
President
Kagame and Tanzania’s John Magufuli also discussed the ongoing
construction of Tanzania’s standard gauge railway to the border with
Rwanda — a project they agreed to speed up and whose completion would
amount to Kigali’s total liberation from its current dependence on
Uganda for trans-shipment of goods.
With Kenya’s own
railway project seemingly halted in Naivasha, 250km away from the
lakeside city of Kisumu and the border with Uganda, these moves appeared
to leave Nairobi in the regional diplomatic cold.
It
would be disastrous for Kenya if President Magufuli once again staged a
diplomatic coup and got Uganda to sign up for Tanzania’s railway.
President
Kenyatta having suffered his biggest diplomatic humiliation since
taking office in the hands of Presidents Museveni and Magufuli in the
pipeline deal, did not wait for things to roll on this time round. He
launched a whistle-stop shuttle diplomacy that saw him visit Kigali and
Kampala in one day, a move that was seen as one to not only defuse the
tension between the two neighbours but also secure Kenya’s economic
interests.
Keen observers of the East African
Community political landscape termed the February and March diplomatic
developments in the four capitals as the game of check-mating that has
become the modus operandi of member states since Uganda, Kenya and
Rwanda came together in what was dubbed the “Coalition of the Willing”
that gave birth to a number of joint infrastructure projects, including
the plan to build a standard gauge railway from the Kenyan port of
Mombasa through Uganda into Rwanda.
Private interests?
Kenya’s
recent offer of land to Uganda in Naivasha — whose details were not
immediately available — however set social media ablaze with questions
as to whether it was a government-to-government deal or a state project
underlain with private interests.
President Kenyatta’s
family owns large tracts of land in Naivasha and the Kenyan government
has previously announced plans to establish an inland port and an
industrial park there, and some critics now argue that the land deal may
have partly been driven by private interests.
Locking
in Uganda to the railway deal is however key to shoring up cargo volumes
on the new line and increasing the viability of the project for its
Chinese financiers.
Uganda remains the biggest market
for Kenyan goods while the port of Mombasa serves as the region’s main
gateway, handling transit cargo for landlocked states such as Rwanda,
South Sudan and eastern Democratic Republic of Congo.
Kenya
is at an advanced stage of negotiations with China for the financing of
the Naivasha-Kisumu phase of the railway that is estimated to cost
Ksh360 billion ($3.6 billion). The line will then be extended to Malaba
on the border where Uganda is expected to pick up onward construction to
Kampala.
Work on this last phase of the line has
lately been shrouded in uncertainty, after Beijing demanded that Kenya
and Uganda seek joint funding for the Kisumu to Kampala segment.
A
planned joint trip to Beijing by officials of both governments did not
happen last year, amid talk that Kampala had changed direction and was
looking north to South Sudan.
Uganda’s Finance Minister
Matia Kasaija said they had suspended the standard gauge railway
project and would instead work on revamping the old metre gauge network.
“It is apparent the SGR is going to take us a lot of
time to complete. We have to wait for Kenya to reach the Malaba border
point then we can start,” Mr Kasaija said.
Cargo chain
This seems to have changed with President Museveni’s visit this week.
“We
have reiterated our commitment to moving all cargo by railway and
reduce the cost of transport for Uganda,” said President Kenyatta.
For
Kenya, locking in Uganda to the Northern Corridor project guarantees
return on investment and the generation of money to repay the Chinese
loans.
The proposed Naivasha dry port will therefore
give Uganda a bigger stake in the cargo chain as a major transit point
to hinterland states such as Rwanda, Burundi, DR Congo and South Sudan,
and put the project in a better position to compete with Tanzania’s
Central Corridor.
Last year, Uganda imported 7.4
million tonnes of cargo through Mombasa, translating into 82.1 per cent
of the transit cargo to the region. This was an increase from the 6.2
million tonnes in 2017.
Kenya’s Transport Cabinet
Secretary James Macharia said more than 25 per cent of the 30 million
tonnes of cargo throughput at the port of Mombasa was destined for
Uganda.
In 2018, the Mombasa port recorded an increase
in the transit haulage to Uganda, Rwanda, DR Cong and Burundi, to 9.6
million tonnes, from 8.6 million the previous year. Out of this, Rwanda
had 230,774 tonnes; DR Congo had 470,968 tonnes, and Burundi 22,233
tonnes.
These three countries will be important to Uganda as it plans the construction of its new line.
Improvements
in the efficiency at the Mombasa port translate into more Ugandan
imports, and Kenya’s additional investments in both the petroleum
pipeline and the Kisumu Jetty are of direct interest to Uganda.
“We
are developing a new oil terminal across the channel, which will berth
four ships at the same time, each with a capacity of 100,000 tonnes.
This terminal will also have a common user gas manfold,” said Kenya
Ports Authority managing director Daniel Manduku.
Nairobi
is already in talks with a private firm to develop the Kisumu port and
has already begun the dredging works and water hyacinth removal.
“We
are utilising Lake Victoria for transportation thereby reducing the
cost of moving fuel to Uganda and increasing potential for trade between
the two countries,” Dr Manduku said.
Agreement over beef, chicken and sugar exports
Kenya
and Uganda agreed to resolve most of the trade barriers that have
persisted over the past two years, with beef and sugar topping the list.
“I
am glad that our Kenyan counterparts have agreed to let Uganda increase
its sugar exports from 36,000 tonnes to 90,000 tonnes annually,”
President Museveni said. “It is also important that Uganda will resume
its poultry exports to Kenya within a week from now.”
Uganda
also sorted out the restrictive paper work requirements for its dairy
products, about which its traders have complained over the past three
years.
The agreement signed in Mombasa saw Kenya
commit to reduce the bottlenecks at the border, which should see a rise
in Ugandan agricultural exports to Kenya.
Nairobi will
resume issuance of importation permits for dairy products from Uganda,
which it stopped in February. Kenya’s biggest win was the lifting of the
ban on meat exports to Kampala, and tile exports to the country.
The two countries agreed to conduct a joint verification of the tiles quality by mid-April, before Kenya opens its borders.
By Allan Olingo, Ahmed Mohammed and Samuel Baya.
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