Transport costs to reduce after Central Corridor improvements
Piles of containers held at Mombasa Port. Currently, Ugandan traders use the Northern Corridor that runs from the Kenyan port of Mombasa to the Great Lakes region. FILE PHOTO
Kampala. Ugandan traders will soon have an alternative and cheaper route to transport their goods once the projected improvement of the Central Corridor through Dar es Salaam Port is complete.
Currently, Uganda uses the Northern Corridor that runs from the Kenyan port of Mombasa to the Great Lakes region which costs about $3,200 (Shs9.5 million) to transport a single container.
However, once the Central Corridor’s multi-modal trade and transport passage which links Tanzania’s main port of Dar es Salaam with the neighbouring landlocked countries is complete; it will take the cost of ferrying the same cargo $1,650 (Shs4.9 million) thus making it a preferred choice.
This is one of the 51 projects approved for acceleration last year by the World Economic Forum in Davos, Switzerland. It involves constructing and improving infrastructure—especially railway tracks and roads linking the Dar es Salaam Port to landlocked neighbouring countries, namely Rwanda, Burundi, DR Congo and Uganda.
Speaking at the Central Corridor Presidential Roundtable in Dar es Salaam on Wednesday, President Yoweri Museveni said: “Transport covers 40 per cent of the cost of doing business in Africa—higher than the cost of electricity (30 per cent) capital (20 per cent), labour (10 per cent) and red tape (10 per cent).”
It takes about 10 days to clear a single container at Dar es Salaam port plus another 10 days or so to transport the same container to Kigali or Kampala--the same time it takes to ship a container from Japan or China thousands of kilometres to Dar es Salaam port.
The chairman of the meeting, Tanzania’s President Jakaya Kikwete, said: “The region is yet to exploit its socio-economic potential to the fullest due to under-developed infrastructure. Even when we agree on how to move forward as a bloc, financing the projects we propose always remain a challenge.”
The leaders, who were present including Yoweri Museveni, Jakaya Kikwete and Pierre Nkurunzinza of Burundi along with representatives of Kenya’s Uhuru Kenyatta and DR Congo’s Joseph Kabila—committed themselves to implement the project that is expected to boost businesses and improve the lives of millions in the region.
East African Community Secretary General Richard Sezibera said the World Bank had approved $450 million (Shs1.3 trillion), $20 million (Shs59.4 billion) to build one-stop centres in three automated weighbridges at Vigwaza in Coast region, Manyoni in Singida region and Nyakahura in Kagera region.
How non-tariff barriers delay trade
Non-tariff barriers (NTBs) are common transit delays caused mainly by inspections carried out by multiple national regulatory authorities. Trucks often have to stop as much as 20 times, for example, between Dar Port and Kigali, Bujumbura and Kampala. This raises transport costs by 15 per cent, according to research by the Central Corridor Transport Facilitation Agency, a multilateral Agency established on September 2, 2006, that was created by five governments--Burundi, the Democratic Republic of Congo (DRC), Rwanda, Tanzania and Uganda.
