Dubai Port World plans to construct a $40 million inland container depot on a 30-hectare plot of land in Masaka, a suburb east of Kigali city, as Rwanda seeks to become a regional trade logistics centre.
Dubai Port World has been granted a 25-year concession to finance, develop and manage the facility, which will provide warehousing, truck parking, a container yard and other auxiliary services.
According to Dubai Port, the first phase of the Inland Container Depot, at the Kigali Logistics Platform, is set to be complete in 18 months’ time, raising hopes that it will contribute to the ease of doing business in the country.
When completed, analysts are optimistic the dry port, which is linked to both the Northern and Central Corridors, will allow Rwandan importers and exporters to consolidate volumes of cargo.
“There are cases where offloading containers takes almost a whole week, forcing truckers to make only two trips per month. But with the new infrastructure, the trucks will do as many as five trips per month. This will reduce transport costs and increase profit for businesses,” said Minister of Trade and Industries Francois Kanimba.
Truck drivers complain about the long waiting time when in Rwanda, despite the implementation of the East African Community Single Customs Territory resulting in a seamless flow of goods within the region.
“There are times we wait for more than 20 hours before being allowed into the city, which adds to operational costs. For instance trucks are only allowed into Kigali to pick up or drop off containers at night,” said Robert Kyembula, a long distance truck driver.
To avoid traffic jams within the Kigali Central Business District, city authorities only allow cargo trucks into the city between 9pm and 5am.
There are hopes that when completed, the Inland Container Depot will boost the country’s manufacturing sector.
The underdeveloped logistics industry is not only a challenge in Rwanda but in many other sub-Saharan African countries as well.
The only promising market in the East African Community is Kenya, according to the 2016 Agility Emerging Markets Logistics Index. The survey points out that poor infrastructure, lack of power generation coupled with corruption pose the most risk to African economies.
Over 43 per cent of the more than 1,000 executives surveyed said they have no plans to set up industries in Africa.
“The results show a serious disconnect between the perception of the market and actual opportunities. Africa’s requirement for logistics services and supply chain expertise is huge and growing every day.
At the same time, many of the companies that need logistics to enter the market don’t know how to get started in Africa or aren’t willing to take the risk,” said Geoffrey White, CEO of Agility Africa.
“The opportunities are there for those seeking to build long-term, sustainable businesses that bring in world-class practices and adapt to local conditions,” he added.
Hannington Namara, TradeMark East Africa country director, is optimistic that the platform will boost intra-regional trade.
“The Kigali Logistics Platform will be the first of its kind, a logistics hub developed under a private-public partnership, and will help provide the economies of scale required to reduce costs not just for Rwanda but also for Burundi, eastern DR Congo and possibly parts of Uganda.
“The confidence shown by DP World, which operates over 65 terminals across the world and has over 36,000 employees, in investing in Rwanda reflects the confidence being shown by investors in our country,” said Mr Namara.