Fiona Nanna, ForeMedia News

5 minutes read. Updated 1:00PM GMT Tues, 29th October, 2024

In a bid to transform its transportation landscape, Uganda has committed to a landmark $3 billion investment in a Standard Gauge Railway (SGR) line to connect Kampala with Kenya’s coastal port city of Mombasa. This development is anticipated to enhance Uganda’s transit capabilities, reduce shipping times, and alleviate the strain on overburdened road networks, which have long plagued the nation’s economy.

Challenges in Uganda’s Current Transport Network

Across Sub-Saharan Africa, heavy reliance on road transport has led to escalating transportation costs, especially in landlocked nations like Uganda. Kampala, Uganda’s bustling capital, suffers from severe congestion and outdated infrastructure, with many routes either unpaved or riddled with potholes. The majority of Uganda’s transport network is managed by the private sector, often leading to high costs for the public who rely on these routes daily.

Humphrey Mwijukye, a logistician with UniFreight Group, highlights the daily challenges on Uganda’s busiest trade route between Kampala and Mombasa. “We are faced with issues of traffic, the congestion of all the trucks on the road, coming through one border post at Malaba,” he shares. “This has created a situation where we are not able to meet our delivery timelines, causing increased costs for our clients.” The delays—caused by road congestion and single border checkpoints—contribute to prolonged delivery times, affecting Uganda’s ability to streamline its supply chains.

A Groundbreaking Agreement for Railway Development

Seeking a solution to the mounting transit challenges, the Ugandan government recently finalized an Engineering, Procurement, and Construction (EPC) agreement with Turkish construction giant Yapı Merkezi. The agreement, valued at €2.7 billion (nearly $3 billion), will cover the construction of a 272-kilometer section of the Uganda Standard Gauge Railway from Malaba to Kampala over the next four years. This section forms a crucial part of a larger 1,724-kilometer SGR network designed to connect Uganda with four neighboring East African nations.

The Minister of Works and Transport, Gen. Katumba Wamala, underscored the significance of this investment, stating, “The Standard Gauge Railway will become the backbone of our surface transport system and will provide the much-needed transport capacity in the country and region, as cargo and passenger transport demand has been increasing rapidly over the last few years.”

Economic Prospects for Uganda and the Region

The Standard Gauge Railway is expected to enhance Uganda’s strategic position in East Africa, potentially shifting the nation towards an export-driven economy. As a landlocked country with the nearest port located 1,500 kilometers away in Mombasa, the SGR will reduce reliance on truck-based transportation, which is often expensive and prone to delays. This project holds the potential to make Ugandan exports more competitive by reducing transit costs and times, spurring economic growth.

However, financing this ambitious project presents a challenge. Uganda’s public debt has been steadily rising, and securing the nearly $3 billion required for the railway construction will place additional fiscal pressure on the government. Yet, analysts remain optimistic, noting that infrastructure investments of this scale could yield long-term economic benefits that far outweigh initial costs, provided that funding can be responsibly managed.

The Uganda Standard Gauge Railway is a visionary step that could unlock East Africa’s potential, transforming Uganda’s economic landscape and further integrating it with regional trade networks.

Meta Description: Uganda embarks on a $3 billion railway investment to upgrade transport from Kampala to Mombasa, aiming to cut transit costs and ease congestion. Discover how this new project will shape East Africa’s economy.