Traders fear Malaba SGR extension with kill businesses at border

There has been growing fear among the business community in Malaba that the planned extension of the Standard Gauge Railway to the town and subsequently to Kampala, will affect business growth at the border.

As late as May 27, representatives of the traders expressed concern that the SGR extension and the consequent seamless movement of goods from the Port of Mombasa through Malaba to Uganda, will negatively impact on trade growth at the border town.

The traders through Kenya International Freight Forwarders and Warehousing Association Malaba chapter chairman Kennedy Osiya, argue that the SGR’s landing in Malaba, first, will wipe out the clearing and forwarding business that is currently strongly supported by truckers.

Tens of clearing and forwarding companies have established shop in Malaba clearing cargo. The firms have employed local youth who have for decades made livelihoods from the business.

With Malaba clearing approximately 1,000 cargo trucks per day, the clearing and forwarding agents earn, on average, Sh200,000. It costs Sh200 to clear a truck.

Besides, the business community argues that truckers spend hundreds of thousands of shillings in the hospitality industry at the border every day. The hotel industry, clubs and guest houses, have specifically hugely benefitted from the long-distance truck drivers who make stop-overs and merry-make in Malaba.

Extension of the SGR thus, the traders argue, will scale-down the number of trucks crossing the border as it is anticipated a sizeable number of long-distance transporters will shift cargo movement to the SGR because of its efficiency and affordability.

With the shift, they said, businesses in Malaba which have traditionally depended on truckers will be hit hard.

Guest houses and lodges, on days characterised by backlog at the border, are booked to capacity courtesy of the truckers.

It is the days that hotels scale-up delicacy preparation as clubs and bars restock.

With the coming of the SGR, the border community fears all the benefits they have enjoyed for years because of their closeness to truckers will be no more.

ALTERNATIVE BUSINESS

Despite concerns by the business community, Roads, Transport and Public Works CS Kipchumba Murkomen while on a tour of Malaba on May 27, allayed fears that the SGR extension will kill trade in the town.

Murkomen said the government has an elaborate plan to open more investment opportunities not only in Malaba, but across Busia.

The CS said significant interventions by the government will be made to cushion traders who will be affected by the seamless movement of goods from Kenya to landlocked East Africa after the SGR extension.

“We will not wait until when there will be a crisis. We are going to construct an SGR that goes all the way to Kampala.  We know for sure that Busia will be hit hard business wise when there is efficiency in terms of transport,” Murkomen said.

“However, we are thinking on how to create special economic zones here in Busia. We are creating alternative businesses beyond the transport system so that when transportation of goods becomes seamless for both Kenya and Uganda, the movement of people and goods doesn’t negatively affect the business here in Malaba town and other border towns. We will ensure these places do not become ghost towns.”

The CS said already, the government has announced plans to set up an industrial park in each of the 47 counties with each devolved unit enjoying a unique specialisation.

He said Busia should capitalise on the opportunity and venture into the production of unique products as locals enjoy employment opportunities that will accompany the project. President William Ruto has already announced the National government has set aside more than Sh5 billion for the undertaking.

He said on March 7, each county will receive Sh110 million towards the investment.

When he toured Busia on May 28, Ruto assured residents of his commitment to improving business development in the county as he seeks to actualise promises he made during campaigns.

Among key investments the head of state is expected to launch in the county is the establishment of an export processing zone at Nasewa at a cost of Sh1 billion. The investment is projected to create at least 5,000 jobs.

Besides, Ruto, who promised to return to Busia before the end of June to launch the construction of the Nasewa project, is also expected announce construction of an industrial park.

The project will be co-funded by the National and County government where each level of government will inject Sh250 million.

The county envisages the investment will create at least 2,000 jobs for residents.

Murkomen said the government will unveil more alternative revenue sources to residents of Busia with the extension of the SGR.