By Charles Onyango-Obbo
Last week, President Yoweri Museveni was in Kenya, and spent unusually long on a visit to an African country – all of three days. Trade, East African integration, and infrastructure were the big-ticket items on Museveni’s agenda, and he even took a ride on Kenya’s “newish” standard gauge railway (SGR) from Mombasa to Nairobi.
He made a lot of renewed commitments to make the SGR extension a reality. What is going on? Since 2013, there had been a lot of noise about the SGR, but from 2016 when Uganda finally chose to build its pipeline through Tanzania instead of Kenya, the volume was turned down considerably.
year in October, Finance minister Matia Kasaija told Daily Monitor that
the government had put on hold the SGR venture and would instead focus
on revamping the old metre-gauge railway network until “unresolved
issues with Kenya and China are concluded.”
“It is apparent the SGR is going to take us a lot of time to complete. First, we have to wait for Kenya to reach the Malaba [border] point then we can start,” Kasaija said.
He said the government would, in the interim, refurbish the old railway line (the old Lunatic Express, or Metal Snake) as “an alternative” to lower transportation costs for traders. Kenya, it was reported then, was instead focusing on taking “the line to Kisumu port as part of the plan to have Uganda and Rwanda evacuate their goods via Lake Victoria”.
A few days later, Works and Transport minister Monica Azuba denied that SGR ambitions had been scaled back, calling the reports “false and unfounded”.
She said a tender for consultancy and construction of the line had already been awarded, and that Uganda “was making steps towards signing a loan agreement with Exim Bank of China before rolling out the project.”
The delay in starting construction of the line, she said, was deliberate to let Kenya make progress on Phase II of the project.
Apart from the bigger financial and political problems bedeviling it, there are many disheartening stories about the difficulties bogging the SGR implementation unit, but for today we shall pass up on them.
The oil pipeline took away some of the passion, and even interest, for the SGR. It was seen as bigger money and easier money, but now we will have to wait at least for four years. Of the many pipeline issues, perhaps the most unforeseen – and which no one dares to talk about – are those brought by President John Magufuli. Magufuli has swung towards a sharply nationalist direction, and some aspects of that might even be laudable.
bigger threat, however, is his erratic policy-making, and stridently
anti-capital moves, which have chased away a lot of even Tanzanian
money, not just foreign investors’ – with Nairobi and Dubai being big
beneficiaries of the capital flight.
That, alone, could push the flow of Uganda’s oil much further out than 2025.
decision to take the oil pipeline through Tanzania, while it didn’t
change the thinking of the political leaders like President Uhuru
Kenyatta, dramatically changed the view of Kenya’s influential, but
rather low-key (compared to Uganda) economic bureaucrats.
The line to Kisumu, and bulking out the city’s port facilities, became a more attractive option to them in the wake of losing the pipeline because it made it faster and cheaper for Rwanda, which now imports most of its goods through Dar es Salaam (although it still exports more through Mombasa) to still use Mombasa, and get its goods over Lake Victoria.
And Kisumu had the added advantage that it would also allow Kenya to loop to the Mwanza region, over Lake Victoria.
The next twist in this economic drama was the signal from Kampala – driven partly by geopolitical considerations but also rivalry with Kigali – to shift priority to an SGR to South Sudan, instead of Rwanda. That caused some alarm in Nairobi, which is working on its SGR line to South Sudan!
The oil pipeline to Tanzania, to recap, forced Kenya to protect the competitiveness of its coastal assets against threats from Tanzania, with a greater shift to investing in the line to Lake Victoria and port facilities in Kisumu.
And its SGR line to South Sudan, is a bid to cover its northern flank, against the threats of the series of ports coming up in the Horn, especially the grand ambitions of Djibouti. And yet, Uganda wants to muscle into that by doing a line to South Sudan before Rwanda.
It is a remarkable example of the ripples that have been kicked off by just one thing; the discovery of oil, and the related decision on the pipeline. For Uganda, then, the most game-changing decision (or action) it needs to make now is not so much the SGR from the Kenya border to Kampala – but from Kampala to Rwanda.
Mr Onyango-Obbo is the publisher of Africa data. visualiser Africapedia.com and explainer site.
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