The Construction of Mbale-Tirinyi road generated a lot of excitement among the masses in late 1990s. This brand new tarmac road would provide a direct and faster route to Mbale bypassing the longer and busier, Jinja – Tororo – Mbale route.

This road was envisaged to solve the problem of transporting foodstuffs and other commodities from the eastern part of Uganda to markets in the central part. However, some of the locals found a different use for the beautiful tarmac road, drying cassava.

This has continued to date. This sad fact is one of the many activities happening on the many new multi-billion road infrastructure investments across the country.

There is barely any meaningful economic boom coming out of some of the roads, remember that have been built on borrowed funds and tax payers’ money. Why is this so? Analysts believe the regions need to be supported in commercial agriculture to realize the benefits of such infrastructure. This may take some time though.

It is predicted that the same could happen to Standard Gauge Railway (SGR) arguably, the country’s major infrastructure project since independence. The US $3.2 billion project will be funded with loan from Chinese Exim bank. Part of the funding is from the infrastructure levy of 1.5% on all imported goods.

Analysts believe, the project may turn out to benefit more of Kenya and the Kenyan manufacturing sector which is said to be advanced than any of the other East African Countries (EAC). Could this be the reason why Tanzania is dragging her feet on the SGR?

There is a section of Ugandans who think, Uganda should have delayed SGR ‘‘otherwise, we have borrowed heavily yet we may have little to export. On the other hand, imports will continue to flood the market. The SGR when completed is set to bring a number of advantages, for example, transmittal time will be one day from Mombasa to Kampala. This will cut down on per diem costs, theft of goods during transit, pilferage, storage costs and not forgetting reduced heavy track traffic on the roads, which means less traffic jams and less road wear and tear.

Flagging off the Preliminary Works for SGR project at Tororo Railway Station on 26th June 2015, Rt: Hon Dr. Ruhakana Rugunda, the Prime Minister of Uganda noted: “This project will boost the exploitation of abundant resources, reduce cost of doing business, increase regional connectivity, foster industrialization, employment and enhance regional integration.”

With a developed manufacturing sector, Kenya, the region’s super economy stands to gain more than any other East African Countries. For this reason, some analysts believe, this railway should be called: Kenya railway.

The first railway from Mombasa to Uganda was called Ugandan Railway because it was specifically built by British to tap into Uganda’s resources particularly Cooper in Kilembe.

A close look at stations where the SGR passes through reveals not much is currently done there to promote economic activities.

On Eastern route major stations on eastern route will include: Kampala City, Kampala East, Jinja, and Tororo. Minor stations will include: Nagongera. Budumba, Busembatia, Iganga, Magamaga, Bulamagi and Lugazi.

On Northern Route, major stations will include; Mbale, Soroti, Lira, and Gulu. Minor stations will include; Magodes, Manafwa, Kachumbala, Bukedea, Kumi, Mukura, Okunguro, Achua, Aloi, Otwal, Patiri, Bwobo, Aparange, Lolim.

Uganda’s competitive advantage is in Agriculture and Tourism. Analysts say Uganda should have first built internal capacity: Train farmers, increase volumes of production, add value on produce before thinking about the SGR. Then we would have a lot to export (both in quantity and quality). The country would then benefit more from SGR.

The proponents of the project say it will have very many benefits among others:

It would benefit the country to have this infrastructure system in place before the economic boom that is predicted in about 5-10 years. This argument is based on a common finance term “one dollar today is more valuable than 5 dollars in future”. Plan ahead for good times by having the systems in place. As expectant mothers go through the rigorous process of shopping for their unborn babies necessities to give them a comfortable start to their life on earth.

The SGR project will have each freight train have a payload capacity of 216(20ft) containers and will travel at maximum speed of 100kph, the railway capacity will be more than 10 trains simultaneously and 40 trains per day, transit time will be one day from Mombasa to Kampala. Sounds goods but it would make more meaning if we were exporting more than imports. In current state, the reverse is true.

Statistics from Bank of Uganda reveal Uganda’s imports stand at US $ 507.50m (Ugx. 1.6 trillion) away from her exports at US $ 225.32m (Ugx. 702 billion). And that tells the story, almost nothing to export through SGR.

Never mind that much of the funds to be used on SGR construction are borrowed and will be paid with interest. With almost nothing to export, it means the country will have to use resources from elsewhere to pay up the loan-perhaps money from Oil.

Unfortunately, global oil prices have been in a free-fall. It means we will have to sale more to pay loans. Well let’s pray that Greece crisis is far from us.

South Sudan crisis

South Sudan crisis revealed much of Uganda’s trading partners, major exports and competitive advantage.Before the crisis in South Sudan, The country was her biggest trading partner with annual export of over $350 million (2013 figures from ministry of Trade), up from $ 630m in 2010.

From this trade, Uganda used to earn an estimated $ 28.4million and close to $ 900,000 per day. Major exports were mainly fresh or raw agricultural produce. Are we going to export the same items on SGR? Have we added value to these crops? These questions need answers.

According to analysts, Uganda should have instead looked towards improving roads not necessarily tarmac to our major trading partners DRC, South Sudan, Rwanda etc.
How Matooke become high demand crop

The history of how Matooke became a high demand crop in Uganda tells story of how SGR should have been handled. When former President Idi Amin expelled Asians, Ugandans starting living in Kampala. This created demand for local food away from foreign food that was consumed by expelled Asians. Because of demand for food in cities, Ugandans in villages started growing on large scale. This then created demand for Taata Lorries to ferry Matooke to Kampala. These Lorries have since disappeared.

In the same way, analysts say, government should have built internal capacity including boosting agriculture and adding value to the produce. In current state, Uganda will have less to export inspite of SGR.

It’s unfortunate, when you move up-country, land is being sub divided into small plots of 50 by 100 plots while others are planting ecalypaluts tress-with serious effects on soil fertility. Sources say, Britannia, one of manufacturers of soft drink imports Passion fruit from Rwanda, since they can’t find them in Uganda.

Global perspective

Netherlands, a first world country, is good example. More than 33% of her roads are marram but well paved. However, what they did was to organize farmers in villages and today agriculture in booming.

From Netherlands, we notice its not about tarmacking road. Statistics reveal, it costs more than $800m to construct one kilometre of tarmac road in Uganda. For example, the 124km stretch from Mbarara to Katuna, cost Euros 117m. Translating to about Euro 950,000 per kilometer.

If you construct more than 300km and nothing comes out of this massive expenditure, does it make economic sense? Roads Like Masaka-Mbarara, Kampala-Jinja, Entebbe are busy because there are economic activities going on these areas. How about Katosi road? Analysts say instead money should be invested in areas with high economic activities so that bring in more money. Such areas like Kampala.

Kampala needs more funding

Kampala in its current ‘disorganized’ state is still the country’s number one revenue earner. Much of the tax comes from Kampala. Analysts say, if we invested more money in improving and reorganizing Kampala: buying off slums, put up new structures, building drainage, improving on roads, Kampala and entire economy would get boast.

Already Kampala and its suburbs have seen improvements after changes by KCCA. But what would happen if we invested more in Kampala and KCCA?

Source: Big eye.Ug

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.