When Tanzania’s President Jakaya Kikwete took over EAC chairmanship from Kenya’s President Uhuru Kenyatta in February this year, infrastructure was high on the agenda at the EAC Heads of State Summit.Specifically, the heads of states were seeking to figure out the financing aspect of the regional mega infrastructure projects.The projects have so far seen increased activity after the EAC heads of states summit. Donors have also moved with speed to fund some of the projects that at completion, are expected to ease transportation of goods within the bloc.
The World Bank, European Union, China and Japan also announced their partnerships with various EAC governments to support infrastructure development and improve the competitiveness of the EAC states.These partnerships have seen a surge in funding by over $2 billion through the various governments in the EAC region. However, even with the increase in funding, mega infrastructure projects in the bloc have significantly dipped in 2014 according to the third edition of the annual Deloitte African Construction Trends Report 2014.
It is noteworthy that Kenya still holds the largest percentage of the transport projects at 59 percent. This represents a 17 percent growth where 37 percent of the projects are in energy and power generation. However, the overall value of the projects plunged from $67 billion to $60 billion.The Kenyan government expects that most infrastructure projects will be financed through public-private partnerships (PPP) or concessional funding from development partners.
A glance at the regional member states’ budgetary allocations for 2015/16 shows that Uganda has set aside Ush4.5 billion ($1.45 million) for the Kampala-Kigali standard gauge railway line while Kenya has allocated KSh118.1 billion ($1.2 billion) for the standard gauge railway. Kenya also allocated KSh25.7 billion ($260.6 million) for the Railway Development Levy Fund (Standard Gauge Railway),Rwanda announced its plans to increase levy to fund for the regional infrastructure projects. The country has imposed infrastructure levy on imports and is looking toraise Rwf10.6 billion ($15.1million) to be channeled into the projects.Construction of the 2,561-kilometre standard gauge railway from Dar-es-Salaam port to Rwanda, Burundi, Uganda and Congo (DRC) is expected to be completed within the next five years.
In November last year, the World Bank pledged $1.2 billion to support infrastructure development and improve the competitiveness of the EAC states. The financing is expected to contribute to the EAC states’ planned investments in the next three to seven years.According to the World Bank Country Director for Burundi, Tanzania and Uganda, Philippe Dongier, the organisation plans to invest in specific transport links to better connect landlocked countries (Burundi, Rwanda, Uganda and South Sudan) to the Northern and Central corridors.
“This is the way to improving these countries’ access to the ports of Mombasa and Dar-es-Salaam.” Mr. Dongier said during this year’s heads of state summit in Nairobi.
For the first time, Burundi attended the so called Coalition of the Willing (CoW) in February last year. In this, it joined Kenya, Uganda, Rwanda and South Sudan as an observer before it decides whether or not it will be directly involved in the projects.
For a long time now, poor infrastructure and delays at border crossings have been cited as contributing factors to high costs of doing business in the region. EAC member states have however, moved towards the One Stop Border Post that now sees vehicles at already operationalized border posts spend from an average of six and a half to an average of four and a half hours. Up until July this year, clearance at border posts took 33 hours for vehicles carrying cargo destined for neighboring countries. This was at the Taveta-Holili border post. It is expected that improvement of road networks in the bloc will cut-down the transit time for cargo destined for other EAC countries.
According to a logistics performance survey (2014) by the Shippers Council of Eastern Africa (SCEA), at 46 days, Burundi has the longest lead time to export, followed by Uganda at 33 days, Tanzania at 31 days, Rwanda at 30 days and Kenya at 26 days.
Let us hope the improved transport corridors will reduce the bottlenecks currently experienced and pave the way ahead for greater intra-regional trade, thereby enhancing regional developed, as envisioned by the EAC’s hope for a regional federation.
Written by Kawira Mutisya
