No SGR? No problem, let that blue economy sing

Tuesday November 6 2018

Lake Region Trade Investment and Blue Economy Conference

People at the Lake Region Trade Investment and Blue Economy Conference in Bomet County on October 22, 2018. The western Kenya's micro trading bloc has proximity to eastern Uganda. PHOTO | BENSON MOMANYI 

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Just over a fortnight ago, 14 Kenyan governors held the Lake Region Trade Investment and Blue Economy Conference.

They were the governors of Trans-Nzoia, Bungoma, Busia, Kakamega, Nandi, Siaya, Kisumu, Homa Bay, Kericho, Migori, Kisii, and Bomet, forming broadly western Kenya. The “blue economy” references their proximity to Lake Victoria.

The Lake Region Trade Investment and Blue Economy Conference as a micro trading bloc, also has proximity to Uganda.

Kenya’s governors are a mixed lot. There are some smart and admirable ones (Kivutha Kibwana of Makueni County and Peter Anyang' Nyong'o of Kisumu); there are also several deplorable ones (who shall remain unnamed).

In general though, most Kenyan governors believe that, much like the US, counties should be able to do things and strike some deals either alone or collectively with external players to create economic opportunities for their counties, without waiting for the central government in Nairobi.

And that is why the conflicting reports earlier in the week that Uganda had shelved plans to extend the standard gauge railway (SGR) from Malaba to Kampala until “unresolved issues with Kenya and China have been concluded," gain even more significance.

Apart from limestone and phosphates, which have driven a new explosion of factories in the Tororo area, eastern Uganda is relatively resource-poor. Population pressure and environmental damage have also taken a toll on the land in many areas there.

However, on a recent drive across eastern Uganda, I couldn’t help but notice an economic boom of sorts.

Part of the boom is accounted for by continued investment in infrastructure, but those who are tracking the trend say the main explanation is Kenya.

While Kenyan trade with Uganda, and the regional commerce between eastern Uganda and western Kenya, goes back donkey’s years, there is a new element. And that element is the Kenyan counties, which were birthed by the 2010 Constitution.

With 15 per cent of national revenue allocated to counties, the Kenyan countryside is awash with a lot of new bureaucratic capital.

Some observers reckon that in western Kenya, this has increased demand for Ugandan products.

But there is also speculation that because of the sharp fall in the value of the Ugandan shilling against the Kenyan currency, both honest business people and corrupt officials who are looting counties, are taking advantage of this to stash their booty in the form of investments – mainly in food production, purchasing, and storing – across the border.

The vices on the Kenyan side, are thus the economic virtues on the Ugandan side. Kenyan county money is creating small miracles in eastern Uganda.

If the SGR doesn’t get built, one of the likely long-term effects could be the integration of the eastern Uganda economy even more closely with western Kenya’s, making the Lake Region the epicentre of a sub-regional economy.

This will be particularly so if, as Transport Cabinet Secretary James Macharia said, Kenya instead revamps the Kisumu port on Lake Victoria to ease movement of goods via the lake to Uganda and Rwanda, and takes the next sector of the SGR from Naivasha to Kisumu.

When it was first built, the Kenya-Uganda Railway was more than a railway. It shaped the politics and economies of the two countries radically. One hundred years later – whether they build it or not – the story is the same.

Charles Onyango-Obbo is publisher of data visualiser Africapaedia and Rogue Chiefs. [email protected]