Last week, the President, while commissioning the rehabilitation works for the Tororo-Gulu Railway line and the construction of the Gulu Logistics Hub, indicated that the Government of Uganda is going to prioritize railway and water transport, going forward. This strategy is a sound one and is in line with Uganda’s aspiration of becoming a regional production and distribution hub. I believe that Uganda needs an effective multimodal transport system, where there is interplay and integration among the various modes of transport such as: air transport, marine transport and land transport. As a landlocked country that is dependent on the Northern and Central corridors for the bulk of its transportation needs, it is critical that we are not overly dependent on any single mode of transport. Unfortunately, we are still reliant on road transport to move over 90% of all freight volumes. This situation has been necessitated by the limited investment in railway and water transport over the years.
Let us take the case of rail transport. As the President acknowledged in his remarks, it is cheaper to transport a 40 feet container of goods from Mombasa to Kampala (US$ 1,800) by rail, compared to (US$ 5000) by road. Uganda based businesses are said to lose close to $1.2 billion annually due to road-related inefficiencies-including high insurance premiums and fees paid to trucking firms. Unsurprisingly, the freight costs incurred by Uganda based businesses are 30% higher than their Southern African counterparts and 60-70% higher than their European and US-based counterparts. Only 5% of Uganda’s cargo destined to Kampala from Mombasa, uses rail transport. Why is this the case? First, the century-old railway network has suffered from disrepair and lack of maintenance over the years. Many of the railway assets are therefore old and dilapidated. For example, for the last two years, the Uganda Railways Corporation has only operated with two locomotives and an aged fleet that has frequently broken down. Thankfully, the Government is keen to reverse this situation. 1.4 trillion shillings has been approved to finance the reconstruction of the 215km Malaba-Kampala railway. To support Government’s efforts, the European Union is also supporting the rehabilitation of the Tororo-Gulu line, using a €21.5 million grant.
Turning to water transport; I would like to state, from the outset, that Uganda has a comparative advantage here, given the fact that 18% of all its territory is covered by water. Water transport can be effectively leveraged to transport passengers, raw materials, manufactured products between domestic and international destination points. However, this form of transport suffered a setback in 1961, when massive flooding affected the East African region. From then, till the mid-1980s, it suffered from neglect. However, since 1986, the NRM government has prioritized this sector. Presently, all the inland waterways either have functional wagon ferries operated by the Uganda Railways Corporation, public ships operated by the Uganda National Roads Authority and Uganda Wildlife Authority; or have vessels operated by the private sector. UNRA alone operates over 10 ferries in various water bodies, countrywide. This includes: MV Kiyindi-Buvuma which navigates the route from Kiyindi to Buvuma and MV Sigulu which connects Namayingo district to the islands of Lolwe and Sigulu. That said, a lot of work still needs to be done in this arena, such as, developing more inland port, equipping water bodies with equipment to guide vessels and improving landing sites. A good starting point would be to review and execute the 20-year water transport masterplan, which sets out ambitious targets for improving water transport. In closing, the COVID-19 pandemic and the disruptions it has occasioned on supply chains underscores the need for a multi-modal system of transportation, to facilitate regional trade.
Robert Mukiza
The Writer is an international investment expert
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