Dar es Salaam trade route costs still too costly for business
Posted Tuesday, February 26 2013 at 00:00
Uganda has embarked on the revival of the Southern trade route as an alternative to the Mombasa Port.
The government’s efforts to revive the Dar es Salaam trade route are commendable but the route is still costly for business, according to the chairman Uganda Investment Authority.
Mr Patrick Bitature, said no matter how one looks at it; the Mombasa route (northern route) makes much more business sense than the alternative Southern route which is not just much longer but also in bad shape.
“Even a difference of $100 matters to a business person,” said the UIA chairman.
He added: “This means business decisions will always favour the Northern route. So I suggest that the efficiency at Mombasa Port be improved because it’s the cheaper option for Uganda.”
Speaking at the Investment Opportunity in Energy and Infrastructure Summit, organised by UIA and the American Chamber of Commerce last week, Mr Bitature said for efficiency to be realized, the port should be privatized.
If an importer channels his container through the Dar Port, transportation costs increase by more than $3,000 largely due to the nature of the road network and the distance involved.
“Manufacturers’ fears rotate around the cost, and poor infrastructure,” the Uganda Manufactures Association (UMA) executive director, Mr Ssebagala Kigozi, said in an earlier interview.
However, traders under Kampala City Traders Association (Kacita) said the two governments should strive to work on the route to work as an alternative to Mombasa.
There are also efforts by the government to help offset the burden that the Southern route users will incur but it seems the move is being stalled by the technicality that surrounds such good will gestures.
Recently the minister of Finance, Maria Kiwanuka was in Tanzania to among others explore a long term usage of the Southern route that runs through Tanzania.
The Southern route is basically considered as an alternative to the Northern route that has seen the country’s economy suffer each time there are disturbances in Kenya.
According the Ugandan and Tanzania governments, the two have endorsed a plan that will work towards the revival of the Southern route.
Ms Kiwanuka said there had been a long term plan to develop the southern route through Mwanza or Mutukula Town to Dar-es-Salaam.
This she said should not be viewed as a short-term intervention ahead of the forthcoming elections in Kenya next month.
“It is important for Uganda to have at least two alternative routes for continuity in supply and efficiency of services,” she told journalists earlier.