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 push between the two countries.
This was agreed on Wednesday evening when President Uhuru Kenyatta hosted his visiting Ugandan counterpart Yoweri Museveni to a state dinner in Mombasa.
Mr Kenyatta said his government would avail land in the second largest town in Nakuru County for Kampala to develop a dry port for its cargo.
“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.
And by dangling the dry-port carrot to Museveni, Mr Kenyatta is telling them that Kenya will offer Kampala independent control of its own goods and any transhipments to DRC and Rwanda, that passes through their territory.
This is seen as a move to up the competitiveness of the Northern Corridor, given the reduced time frame as compared to Tanzania’s central corridor.
As the Kenyan government implements the long-term plan to move all cargo from the road to the SGR, Mr Kenyatta said, his administration is working on the complete elimination of barriers that slow down movement of cargo such as multiple roadblocks and unnecessary weigh bridges.
“But more importantly, it (SGR) will reduce the cost of transport for Ugandan investors and Uganda itself. It will improve efficiency of Mombasa Port to the benefit of our people,” said President Kenyatta.
On trade between the two countries, Mr Kenyatta said movement of cargo from Mombasa to Kampala that previously took 21 days has drastically reduced to seven days since he took over as president.
On the transportation of petroleum products, Mr Kenyatta said his government was finalising the construction of the Kisumu petroleum jetty.
“For the first time since colonial days, we are utilising Lake Victoria for transportation thereby reducing the cost of moving fuel (petroleum) to Uganda and increasing potential for trade between the two countries,” he said.
President Museveni said African countries must embrace economic and political integration in order to spur prosperity and ensure strategic security for their citizens.
The Ugandan leader hailed the revival of the East African Community, joining of Comesa by East African states and signing of the Continental Free Trade Area (CFTA), saying those were progressive steps towards the political integration of the continent.
“Economic integration if it is implemented properly will result in the modernisation of African countries. They will be stimulated to produce more,” said President Museveni.
Mr Museveni called for fast-tracking of the political integration of East African states, saying the region can easily form a political confederation because her people have much in common unlike other economic blocs, which lack a unifying factor beyond economic integration.
“Above all, East Africa and eastern Congo speak Kiswahili. Therefore, the infrastructure for a political integration in East Africa is very strong,” said President Museveni.