THERE IS no worse place to be a businessman than in Uganda, Rwanda and Burundi, especially if you have to ship goods from Mombasa.
To judge by the passion of their speeches at last week’s Tripartite Meeting on Infrastructure held in Nairobi, issue of surging transport costs has irked government officials and business executives from these countries the most.
These East African Community landlocked countries are paying billions of dollars annually in transport expenses, pushing up the cost of doing business and pushing many traders out of businesses.
Poor roads connecting EAC member countries have seen road transport costs account for between 14 per cent and 37 per cent of total logistics costs for importing goods, depending on distance, according to a study by CPCS Transcom. The firm was contracted by Northern Corridor Transit Transport Co-ordination Authority.
To transport a 20-tonne container from Mombasa to Nairobi costs $1,300 while a similar container from Mombasa to Kampala and Kigali costs $3,400 and $6,500 respectively. This is more than double the $ 1,200 one would incur to ship the same goods from Japan to Mombasa.
The alternative, railway transport is too underdeveloped to carry more than a fraction of cargo, leaving businessmen with only the road.
It will cost up to $25 billion to complete the Lamu-South Sudan-Ethiopia corridor, meant to improve trade among the countries.
To the tripartite a railway line too remains the solution to equal trade.
“Construction of a standard gauge railway at$1.2 billion connecting the three blocs will reduce such costs,” said Sindiso Ngwenya the Comesa Secretary General.