Kisumu port, rail gives hope to industries and regional trade

Local manufacturers optimistic the infrastructure will boost industrial growth.

In Summary

•Chamber of commerce hopeful the rail and port will open up local and regional trade.

•Kenya Breweries’ Kisumu plant, revived Rivatex East Africa and new KCC among those expected to move volumes on rail.

A ship loaded with cooking oil at Kisumu Port for export to Uganda on Lake Victoria.
KISUMU PORT: A ship loaded with cooking oil at Kisumu Port for export to Uganda on Lake Victoria.

The revival of the old Metre Gauge Rail to Kisumu and the link to Mombasa through the SGR is expected to boost trade in the region and with neighbouring countries.

Local traders and industries are hoping to benefit from the projects with the Kenya Association of Manufacturers (KAM), Kenya National Chamber of Commerce and TradeMark East Africa terming the infrastructure as a "game-changer".

It includes the upgraded Kisumu Port expected to boost exports and imports through the lake transport network mainly between Kenya, Uganda and Tanzania.

According to KAM, revival of the old rail is significant for the local manufacturing sector as it opens up Rift Valley, Western and Nyanza regions, and increases connectivity with other parts of the country, particularly Nairobi and Mombasa.

“The railway line shall increase the efficiency of movement of raw materials to industries in Rift Valley, Western and Nyanza. Additionally, it shall speed up the transportation of finished goods from the factory to the markets,” chief executive Phyllis Wakiaga told the Star.

The port will enhance market access in countries surrounding Lake Victoria.

“We hope to see increased volumes of goods transported through Lake Victoria, into the East African Community markets,” said Wakiaga.

The Kenya National Chamber of Commerce and Industry (KNCCI), Kisumu chapter, has expressed optimism the development will open the region for trade, mainly agricultural and industrial produces.

“It is going to open trade for people in Western Kenya and connect markets both locally and in the region,” chairman Israel Agina said yesterday, noting Kenya has been losing business to Tanzania which has recently enticed Uganda with its Lake transport, even as Uganda remains a key trading partner for Kenya.

Uganda is the key destination for transit cargo coming through the Port of Mombasa, accounting for 83.2 per cent of all goods to the hinterland, Kenya Ports Authority data shows.

South Sudan takes up 9.9 per cent while DR Congo, Tanzania and Rwanda account for 7.2 per cent, 3.2 per cent and 2.4 per cent respectively.

Kisumu Port links Kenya to small ports of Musoma, and Bukoba in Tanzania and Entebbe and Port Bell in Uganda.

TradeMark East Africa has vouched for Kisumu Port as a key facility that will boost trade within the East Africa Community(EAC).

“Kisumu port is served by the Northern Corridor and would attract transit cargo traffic to Uganda and Northern Tanzania,” director-Great Lakes, Sjoerd Visser, told the Star.

The rail and port projects are expected to support the growth of agricultural exports such as tea and coffee, domestic movement of fresh milk, and other produce.

Kenya Railways which is running Kisumu Port with main operations on its MV Uhuru has also been moving oil products using the port.

The facility will also serve factories in Rift Valley and western Kenya and the fish industry in Kisumu, with hopes of revival and growth of installations in the region where the likes of Kisumu Cotton Mills (Kicomi) were key in the 1990s.

Kenya Breweries’ Kisumu plant, revived Rivatex East Africa and new KCC are among those expected to move volumes on rail, according to Kenya Railways.

It is putting final touches to link the old rail to the SGR, at Naivasha, reviving the country’s expansive railway operations that had remained dormant for more than two decades, with economies of small towns along the railway line suffering from reduced business activities.

Kenya Railways managing director Philip Mainga notes that the connection will ensure a seamless rail system for both passengers and cargo between Mombasa , Kisumu and Malaba, which will further support transit cargo movement into the hinterland.

He is also keen to revive railway lines in Butere, Eldoret, Kitale and the Voi-Taveta line to increase cargo movement between Kenya and Tanzania through the Taveta-Holili border, a move that is likely to bring back to life the small towns.

Renewed ties with Tanzania, a recent trade agreement with Burundi, and a much stable trade between Kenya and Uganda are elements local industries are counting on, as they embrace the improved infrastructure to move volumes to these markets.

They are hoping protectionism trends seen in the region in recent times, such as bans on maize, high tariffs imposed on goods and controls on the milk industry will be addressed to support intra EAC trade.

According to the East African Business Council (EABC), tariff and non-tariff barriers are still hampering intra-EAC trade, which is still at a low of 13 per cent compared to common markets such as the EU which is at 67 per cent.

EAC Secretary General Peter Mathuki has since committed to growing the trade by among others, finalisation of the comprehensive review of the EAC Common External Tariff (CET) and its uniform application in the bloc.

The EAC-CET comprises a triple band structure for raw materials and capital goods (0 per cent), intermediate goods (10 per cent) and final goods (25 per cent), as well as a Sensitive Items list with exceptions to the three-band rule for specified commodities attracting high rates of duty (notably, all above 30 per cent).

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