Railways are being built on a scale not seen since the early years of European colonial rule, with the focus overwhelmingly in East Africa. The biggest change to Kenyan logistics since independence was due to take place just days after African Business went to press, with the completion of the new standard gauge railway (SGR). The line has been mainly built with funding from China’s Export-Import Bank, with China Road and Bridge Construction acting as the engineering, procurement and construction contractor. It will run from the Port of Mombasa as far as Nairobi and is expected to be extended as far west as Kampala and then on to Kigali. Nairobi hopes that the completion of the line will see more cargo switched from road to rail. In order to ensure that this happens, it has stipulated that at least 40% of all cargo travelling between Nairobi and Mombasa should be taken by rail to Nairobi Inland Container Depot (ICD) for clearance. The ICD’s annual handling capacity is already being increased from 180,000 TEU – or standard sized containers – a year, to 450,000 TEU, in order to cope with demand. Construction starts in Tanzania The new line will greatly improve cargo transport between much of landlocked Eastern Africa and the Port of Mombasa. Given their rivalry, it was no surprise that the Tanzanian government responded by pushing ahead with the construction of its own new railway to Rwanda. In April, a joint venture of Turkey’s Yapi Merkezi and Portugal’s Mota-Engil...

Tanzania’s Government signed a $154 million (Sh15.8 billion) contract on Saturday with the State-run China Harbour Engineering Company (CHEC) to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub. The Port of Dar es Salaam, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of the Democratic Republic of Congo. The latest move is expected to increase competition for port users in the region with Kenya that last year launched the second container terminal that was credited with increasing cargo traffic by 2.4 per cent. The terminal has the capacity to handle 550,000 containers annually, which is expected to increase the capacity of the Mombasa port by over 50 per cent. In Tanzania under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes currently. “Deepening and strengthening of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being...

The Uganda government, which plans to start construction of a multi-billion dollar rail project to Kenya, has to wait until its neighbour agrees to extend the railway line to the border at Malaba for the financier to avail the funds, according to the Standard Gauge Railway Project Coordinator, Kasingye Kyamugambi. Kyamugambi told journalists in Kampala on June 02 that China’s Import –Export Bank is willing to fund the US$2.3bn (Shs 8.13 trillion) rail project upon receipt of assurance that Kenya will extend the track from Kisumu to Malaba. “Uganda applied for the loan about 18 months ago. We have been negotiating and made all the necessary requirements. The only issue remaining is us and Kenya to have a date of completing the railway line and the funds are availed,” he said. He said the only condition yet to be met as spelled out by the financier is to ensure that once the construction of Naivasha-Kisumu rail is ongoing, Kenya will also start working on the Kisumu-Malaba route. This is to ensure that the new rail snakes through Kenya to the neighbouring states in the region and thus generate revenues for recovery of the loan, which will be paid in 20 years, with a five-year grace period. “The two countries are now engaged in negotiation with the bank to agree on the exact month that the Kisumu-Malaba-Kampala railway route will be completed. The heads of state are working on this and we hope the project will commence soon like in September,”...

The government has hired a newly influential US lobbying firm partly in order to help Kenya block a threat to the sizable trade benefits it receives through the Agoa programme, Kenya’s embassy in Washington said on Friday. More than 66,000 jobs in Kenya are in “imminent danger and threat of being lost” due to a move by a US trade association to have all the East African Community member-states barred from continued participation in the African Growth and Opportunity Act, the embassy warned. Kenya last year exported Sh35.2 billion worth of textiles and apparel to the US duty-free under Agoa’s preferential trade terms, up from Sh22.3 billion in 2012, official data show. Kenya benefits from Agoa far more than do the three other major EAC countries: Rwanda, Tanzania and Uganda. The Secondary Materials and Recycled Textiles association (Smart), which represents US-based used-clothing companies, urged a US government trade agency in May to review the EAC states’ eligibility for Agoa. Smart took that action in response to the EAC’s decision in February to phase out imports of second-hand clothing by 2019. “The ban directly contradicts requirements that Agoa beneficiaries work towards eliminating “barriers to United States trade and investment and promote ‘economic policies to reduce poverty,” Smart director Jackie King has said. The used-clothing industry generates thousands of jobs in East Africa that will be lost if the ban takes effect, Smart warned. The Sonoran Policy Group (SPG), the Washington lobbying firm recently retained by Kenya, “will be crucial” to efforts...

Intra-African trade has seen a resurgence as a topic of conversation, featuring prominently at the recent World Economic Forum (WEF) on Africa, and in news reports, as African leaders seek a solution to slow growth, inequality and unemployment across the continent. In the Agenda 2063, The Africa We Want, the African Union (AU) has set a target to increase intra-African trade from 12% in 2013 to approximately, 50% by 2045. This is to be mainly facilitated through the Continental Free Trade Area (CFTA) – a single African market for goods and services, due to be established this year. According to the UN Economic Commission for Africa (UNECA), the CFTA could increase intra-African trade by US$35bn, or 52% above the baseline, by 2022. The intra-regional trade goal of Agenda 2063 also extends to infrastructure, which the agenda says will include high speed rail systems – with a pan-African high-speed train network including all major cities and capitals of Africa – roads, sea and air transport and shipping lines. According to the United Nations Development Programme (UNDP), Africa’s intra-regional trade grew annually at a rate of 13%, up from $30bn to $178bn between 2000 and 2014. Collaboration between government and business is the key to the success of the CFTA and Agenda 2063’s trade goals. This is because co-operation and collaboration across the private, public and social sectors could be a powerful force for transformative change and growth. With shifting dynamics in the global economy, Africa has a unique opportunity to break...

The East African Community has developed an ambitious industrialisation policy to promote the manufacturing sector, which is expected to account for 25 per cent of the regional GDP — up from 10 per cent — by 2032. Anchored in value addition and product diversification, the policy shift is expected to ease the dependence on agriculture and increase the value of manufactured exports to at least 40 per cent, up from the current eight per cent. “The EAC industrialisation strategy and its action plan must guide all our policy actions and deliver results,” said Rwandan Prime Minister Anastase Makuza, during the Second East African Manufacturing Business Summit in Kigali. Over the period, 2006 remains the best performing year, when manufacturing sector growth peaked of 8.2 per cent before crumbling to a low of 1.4 per cent in 2012 and recovering in 2015 to 5.7 per cent. In 2016, its growth shrank to 4.7 per cent. Competition Of note is that while the growth of manufacturing in the EAC is higher than the sub-Sahara Africa average of 4.3 per cent, it is significantly lower than that of the West African economic bloc that stands at 8.7 per cent and Ethiopia whose sector is expanding at a rate of 9.6 per cent. “The growth of the EAC manufacturing sector is not sufficient to create structural transformation or to reach ambitious industrialisation targets,” said Ruth Pollak, research and industrial policy advisor at the United Nations Industrial Development Organisation. Ms Pollak added that although the...

The East African Community has developed an ambitious industrialisation policy to promote the manufacturing sector, which is expected to account for 25 per cent of the regional GDP — up from 10 per cent — by 2032. Anchored in value addition and product diversification, the policy shift is expected to ease the dependence on agriculture and increase the value of manufactured exports to at least 40 per cent, up from the current eight per cent. “The EAC industrialisation strategy and its action plan must guide all our policy actions and deliver results,” said Rwandan Prime Minister Anastase Makuza, during the Second East African Manufacturing Business Summit in Kigali. Over the period, 2006 remains the best performing year, when manufacturing sector growth peaked of 8.2 per cent before crumbling to a low of 1.4 per cent in 2012 and recovering in 2015 to 5.7 per cent. In 2016, its growth shrank to 4.7 per cent. Competition Of note is that while the growth of manufacturing in the EAC is higher than the sub-Sahara Africa average of 4.3 per cent, it is significantly lower than that of the West African economic bloc that stands at 8.7 per cent and Ethiopia whose sector is expanding at a rate of 9.6 per cent. “The growth of the EAC manufacturing sector is not sufficient to create structural transformation or to reach ambitious industrialisation targets,” said Ruth Pollak, research and industrial policy advisor at the United Nations Industrial Development Organisation. Ms Pollak added that although the...

The government is expected to increase spending to 32.945tri/- from the current 29.5tri/-, to finance implementation of flagship infrastructural projects aimed at enabling Tanzania to make optimal use of its strategic position as a transport hub in the region. The 2017/18 budget is aimed at financing the second year of the ambitious Five- Year Development Plan II (2016/17 - 2020/21) which is geared towards heavy investments in infrastructure to transform the nation from an agricultural economy to an industry based economy. Key development projects with significant multiplier effects to the economy as outlined in the plan include construction of the standard gauge railway (SGR) to link the Dar es Salaam Port with Mwanza on Lake Victoria and Kigoma on Lake Tanganyika, as well as neighbouring Rwanda and Burundi. The government is funding construction of the first phase of the line, about 207km from Dar es Salaam to Morogoro which will be constructed by a Turkish Company Yapı Merkezi and Portugal’s Mota-Engil under a turnkey contract at a cost of 1.2bn US dollars. The government has also lined Mchuchuma Coal Mining and Liganga Iron Ore Mining, a 3bn US dollar project which includes construction of a 600MW coal-fired power station and an iron plant expected to make Tanzania the third largest African producer of iron ore and generate 32,000 jobs. Other flagship projects include revamping of the national carrier, Air Tanzania Company Limited, to boost tourism and air transport sectors. The government purchased two bombardier aircrafts for the national carrier last...

The East African Community secretariat on Tuesday took the ongoing competition for design of the new symbols of the regional bloc to the University of Rwanda’s College of Arts and Social Sciences (CASS) in Huye District. The symbols that need to be changed are the emblem and logo of the six-nation bloc. The competition follows a decision taken last year by the Sectoral Council of Ministers responsible for EAC affairs to adopt the bloc’s brand architecture strategy and directed the secretariat to involve the region’s youth in developing this new brand. According to Richard Owora, head of corporate communication and public affairs at the EAC Secretariat, the EAC brand architecture strategy proposes activities that include: re-designing a new emblem and logo, developing a common unique identifier for all EAC organs and institutions; developing one main EAC corporate colour and one secondary colour; and developing a single visual identity emblem for the Community. Regional youth or students aged 18 to 35 are partaking in the competition in which the first prize is $25,000. The second and third prizes are $5,000 and 2,500, respectively. “EAC does not have clearly defined brand architecture for its organs and institutions and this has created a gap that has led to the inconsistent design of new logos for the institutions,” Owora said. “There is also lack of a visual connection between the current three main organs; the EAC Secretariat, the East African Legislative Assembly, and the East African Court of Justice, and the eight other institutions.”...

Although China highly spoke of its first African built railway from Tanzania to Zambia during the Cold War heydays, it is a rare occasion for China to link a railroad to a grand design, such as “the Belt & Road Initiative” proposed by President Xi Jin- ping in 2013. Recently, after the completion of the railroad from Nairobi, the capital city of Kenya, to its key port city Mombasa, a three-part documentary produced by Xinhua News Agency in a title of “My Railway, My Story” made its debut on Kenyan television on 29th and 30th May respectively and on Chinese international television New China TV. The major public state broadcaster in Kenya, the Kenya Broadcasting Corporation also showed the two parts "Bridges" and "Stations" documentary which revolve around the 79 bridges and many stations along the 480-km long railroad with stories of people who were dedicated to its construction during prime time slots. Kenyan observers lauded the initial two part documentary which aired and showcased spectacular Chinese workmanship in the construction of Standard Gauge Railway. For sure, the legacy of the railway line would live on, as the SGR is set to transform the country's socio-economic bearing for many years to come. However, the question that comes into focus in the many minds of many and the subject of this article is why did China invested 3billion US$ into the huge East African rail-network and how does the world perceived the railroad in East Africa within the backdrop of Chinese-initiated...