Kenya will offer Uganda land to build a dry port for its cargo in Naivasha as part of the joint standard gauge railway (SGR) project.
This was agreed on Wednesday evening when President Uhuru Kenyatta hosted his visiting Ugandan counterpart Yoweri Museveni to a state dinner in Mombasa.
“By August this year, the SGR will have reached Naivasha,” Mr Kenyatta said.
“I have confirmed to President Museveni that with that development in Naivasha and then moving the SGR to Malaba, goods will be able to move from Mombasa to Malaba in just two days."
Details and terms of the dry-port offer were not immediately clear but Mr Kenyatta’s move is widely seen as aimed at retaining and expanding the Ugandan cargo business.
It is also part of Nairobi’s reassurance on Kenya’s commitment to keep Uganda as its biggest client for transit cargo.
Uganda is the biggest market for Kenyan goods and the biggest client to the Port of Mombasa, especially for transit cargo, ahead of Democratic Republic of Congo (DRC), South Sudan and Rwanda.
According to Kenya Ports Authority (KPA) 2017 annual performance report, the port saw a marginal 1.1 per cent increase in transit goods traffic to 7.75 million tonnes.
Uganda remained as the largest of the hinterland market accounting for 81.9 per cent of the traffic or 6.34 million tonnes.
The dry port will also see Uganda play a more crucial role for the hinterland countries, including Rwanda and DRC, and also hints at Kenya’s commitment to come through with the last mile of the SGR railways line between Kisumu and Malaba, which will see Uganda secure funding for its Kampala-Malaba line.