East Africa: Region sitting on untapped trade worth USD 60 billion

The development of Lake Victoria ports is the biggest project in implementing the East African Community Inland Waterway Transport infrastructure development agreed by partner states to strategically link Uganda, Tanzania and Kenya to both the Northern and Central transport corridors.

The three countries are seeking to revive connected ports and maritime operations on these shared waters to enhance integration and grow trade by offering cheaper transport across borders.

The Tanzanian ports of Mwanza, Musoma and Bukoba are so far up and running and the busiest on the lake, while the Kisumu port in Kenya was rehabilitated this year as Uganda struggles to build the Bukasa port to complement services offered at Port Bell.

The revival of the Kisumu port started as a quid pro quo for the Kenyan opposition leader Raila Odinga in March 2018, for making peace with President Uhuru Kenyatta after the contested 2017 polls.

The port has always been part of the larger East African Community development plans as Kenya, Uganda and Tanzania revive the neglected and underdeveloped Lake Victoria transport infrastructure with a potential of generating $60 billion worth of trade annually, but currently only realises $6 billion for the three countries combined.

Kenya pumped $7 million into the construction of a fuel jetty, feeder jetties and piers, shunting areas, berths, a terminal and yards, with administrative and Customs facilities, to reclaim Kisumu’s position as the nerve centre of inland maritime transport in East Africa. The port has also been equipped with forklift trucks, mobile cranes and tractor-trailers ready for imports and exports.

But a lack of corresponding infrastructure and political will and co-operation in Tanzania and Uganda could delay the dream of a vibrant all round Lake Victoria economy. While all three countries have expressed interest in reviving the Lake Victoria water transport to unlock the economic potential of the region and integration, official launch of Kisumu, set for August 2019, has been postponed several times, because of underestimation of infrastructure layout needed and inability of Uganda and Tanzania to complete their corresponding facilities on time. But also because none of the regional leaders were available to attend.

The port, whose Phase I is complete, depends on Tanzania — whose ports of Mwanza, Musoma and Bukoba — and Port Bell and Bukasa in Uganda, the latter being built, to develop corresponding infrastructure to jumpstart transport and other activities on the lake.

Covid-19 disruption

Ugandan authorities say construction of Bukasa port continues to lag behind its peers in Kenya and Tanzania as compensation for the extra land needed drags on while tendering for initial works on the project site has also been pushed back several times, the latest being to December this year.

Waiswa Bageya, the Permanent Secretary in the Ministry of Works and Transport told The EastAfrican that the government is now processing tenders for dredging and surcharging of swamp to get Phase I of the project underway.

“This was supposed to be done in June but Covid-19 disrupted our plans. We target December to finalise tenders for dredging and surcharging,” he said.

“Last financial year we submitted a compensation budget of $7.8 million but we were given only $4 million. This financial year, we have $675,675 to continue paying project affected persons,” added Mr Bageya. The delays for the project, which was planned for construction in 2016, means that water transport development on Uganda’s side of Lake Victoria continues at a snail’s pace, which limits the movement of goods as there is no connectivity between Bukasa and the already complete Kisumu port in Kenya.

Bukasa port, part of the EAC Inland Waterway Transport infrastructure development project, once completed, is expected to handle up to 5.2 million tonnes of freight annually, and ease the movement of goods from the Tanzanian ports of Dar es Salaam and Tanga, via rail to Mwanza port on Lake Victoria.

Barges would then bring the cargo over the lake to Bukasa, which would reduce Uganda’s 70 percent dependence on the port of Mombasa, Kenya.

Kenya has since last year counted on the revival of Kisumu port to revive the economy of western Kenya by reopening key road-rail-and-water transport corridor and create thousands of jobs.

Kenya is also reviving the metre-gauge railway connection to the port via Mombasa-Naivasha standard gauge railway.

Kenya Pipeline Corporation (KPC) completed the building of the $17 million oil jetty in 2018.

“The Kenyan oil jetty is ready for use but unfortunately our counter partners on the other side of the lake, which is Uganda, are not ready,” said the KPC managing director, Dr Macharia Irungu in a presentation to the Senate Standing Committee on Energy this year.

The jetties are expected to have higher safety and reliability and ensure the efficient delivery of petroleum products across the region, removing an estimated 100 oil tankers from the roads.

But the lack of implementation and construction of shipping yards in Tanzania and Uganda side has also derailed the viability of project Kisumu port.

Questions raised

According to Kenya Ports Authority acting managing director, Rashid Salim, the business at the facility would reach its peak after completion of construction of Kisumu’s Phase 2 next year.

“Kisumu port is already in operation after completion of construction of Phase One, of major repairs on existing facilities, acquisition of required equipment and machinery, and a face uplift of the port. We expect the port to be used by regional states once Phase 2 is done, which commences next year after commissioning of Phase I,” said Mr Rashid.

But the second phase which was scheduled to begin next year, might be delayed if the project is not commissioned since the government would only release the funds to further the project after commissioning Phase I.

The project, however, continues to raise questions as the facility only received 41 vessels in 2019 with only one ship handled in December the same year according to KPA yearly performance report. Kenya is already selling petroleum products to Uganda via Kisumu Port using the refurbished MV Uhuru.

Kisumu port was once served by MV Uhuru and MV Umoja ferries owned by the defunct East Africa Railways and Harbours Corporation and transported goods and passengers between Kisumu, Mwanza and Musoma and Port Bell.