The lack of infrastructure in the East African region has for long deterred companies from investing — and driven up costs for those who have done so.

Governments of member states have also never been in a hurry to address the issue, which has denied the region investments worth billions of dollars.

The region’s roads, railway lines, ports and power grids are neither adequate nor reliable. Some of the infrastructure is crumbling or non-existent.

The problem is made worse by the fact that the poor road network is the core of the transport system.

Therefore, the $300 multi-million World Bank loan to upgrade major roads connecting the East African Community member states is good news.

Part of the money will also support the improvement of the runway at Mombasa International Airport, Kenya’s second largest airport, and one of the economic hubs in the region.

“The Bank is making this substantial investment in Kenya’s two most important road corridors as part of its effort to help Kenya transform into a modern middle-income economy,” says Johannes Zutt, World Bank country director for Kenya.

The funds will finance the upgrading of the Kisumu-Kakamega-Webuye-Kitale road and rehabilitate sections of the Northern Corridor.

The Bank, the Kenya government and other partners are investing $478 million in the first project whose focus will be on the Tanzania-Kenya-Sudan Corridor, which also has links to Uganda and Ethiopia.

It is the second largest transport system after the Northern Corridor — also being improved with the support of another $460 million of World Bank support.

“The project will support implementation of Vision 2030 and help consolidate Kenya’s position as a regional transportation hub,” says Supee Teravaninthorn, World Bank sector manager for transport.

The two corridors serve about 70 per cent of Kenya’s 38 million people and link businesses that contribute an estimated 80 per cent of the country’s gross domestic product.

According to Mr Zutt, the project will reduce bottlenecks on transit traffic and trade, particularly in the western region, opening up trade and investment opportunities for Kenya and the wider East African region.

Studies by the World Bank and other institutions reveal how expensive transportation of goods and services is.

For example, to ship a container from the US to East Africa has always been cheaper than transporting the same from Zanzibar to Burundi.

However, in the recent past increased cases of piracy on the Indian Ocean has pushed insurance premiums for goods to prohibitive levels, making transport within and without East Africa an expensive affair.

Therefore, the cost of doing business has always remained high, making goods originating from the trade bloc non-competitive in comparison to those from parts of Asia and Latin America.

According to the EAC secretariat, transport related costs of trade in the region constitute a high percentage of export and import costs ranging between 30 and 40 percent higher than in other developing countries.

Landlocked countries pay an even higher price in trade costs.

It is the reason why EAC member countries, have put improved infrastructure as one of the key issues on its must-do list and technocrats are already lobbying for billions of shillings for the mega projects.

The World Bank estimates that Africa requires $93 billion each year out of which $18 billion should be channeled to the transport system to raise the region’s competitiveness internationally and accelerate employment through expanded opportunities.

Infrastructure aside, political instability has made it difficult for the continent market itself. It has been an arduous task for the African leadership to convince investors of the importance of investing in the continent, which still suffers weaknesses of one-party kleptocracy.

Nduva Muli, the managing director of Kenya Railways Corporation, said a high quality transport system is necessary for the full participation of all members of a country and also for equal benefits of national development.

“In Kenya and indeed East Africa, transport and logistics contribute between 30 per cent to 45 per cent of the cost of production,” said Muli on why a good transport system is crucial for the development of the region.