Monday, February 14, 2011

NO INFRASTRUCTURE, NO EA INTEGRATION

Long, Long time ago former president of the then Zaire Mobutu Seseko made a state visit neighbouring Central African Republic. Received ta the airport by his counterpart Jean Bedel Bokasa they drove along multi-laned highway to the capital and on to Bokasa’s palace.

At the palace the Mobutu took Bokasa aside admonished him, “My friend,” he must have said. “What is wrong with you? How can you have such well paved roads leading to the capital? Do you want to be overthrown?”

It may sound funny now but if you visit the DRC today the most efficient mode of transport is by air, never mind that most of the air travel is done by decommissioned Soviet era planes whose safety would be hard to vouch for.

I recalled this anecdote last week on a road trip to Dar es Salaam from Kampala.

The 1800 km trip sponsored by the Tanzania Ports Authority, was meant to showcase the central corridor route – Mutukula to Dar es Salaam and promote it to the Ugandan business community as an alternative rout to the Kampala-Mombasa route.

Of all the four million tons of cargo that comes in or goes out of Uganda only one percent of it is channeled through Dar Es Salaam. This is down almost five times form the 2004 high of 132,137 tons.

Since then the sinking of the MV Kabalega in 2005 Uganda cargo on the route has fallen sharply.

Apart for a 100 km stretch before you get to the intersection to Rwanda at Lusahunga, the road is well laid. The poor quality of the road was a major impediment previously.

That Uganda external trade is totally exposed to the Mombasa route is the height of imprudence and that we have continued to let the situation drag on makes one wonder.

The larger strategic issue aside there are several bottlenecks both governments – Kampala and Dodoma, need to address to see more freight plying the central corridor.

For starters the distance to Dar es Salaam is about 600 km longer than that to Mombasa. Businessmen on the trip suggested that concessions have to be made to mitigate against this greater distance. For instance Tanzania might want to negotiate with Uganda to freight charges tax free on cargo coming through Dar es Salaam.

While acknowledging that the road was much improved the businessmen suggested that the vast distances between major towns need to be dotted with service points where passengers can sleep over or cars maintained.

In addition to improving the road the Tanzanians have invested in speeding up turn around at the Dar es Salaam port and are in talks with Kampala on multi-billion dollar project to develop Tanga, Port Bell and Kampala Port, to resuscitate the railway line and reinstate the ferry system on Lake Victoria.

Interestingly given our near death experience after the Kenyan post election violence in 2008 there seems to be little urgency in resolving this issue once and for all to the satisfaction of the business community.

Businessmen will not adopt the rout e because of some unquantifiable love for Tanzania. They will use the route because it makes business sense.

Making the route profitable is not rocket science but will need bureaucrats on both sides of the border to think like business or at the bare minimum be sensitive to their concerns.

We can sign all the protocols in the world but as long as our regional infrastructure remains wanting East African integration will remain a pipe dream toasted to in Arusha.

One of the reasons the East African community collapsed the first time was for lack of widespread interaction between the three country’s populations, beyond the handful of technocrats posted at the various capitals. This allowed the leaders of the time to play around with a public good like with little resistance from the people.

This is understandable since the colonial infrastructure was designed to extract raw materials and not improve communication in the region.

In a related incident Kenyan investment firm Centum cross listed their shares on the Uganda Securities Exchange. The 45 year old investment firm has $140 m under management, invested in companies and real estate around the region.

The company with pan-African ambitions has proved itself at raising and deploying capital to the benefit of its shareholders.

East Africa’s infrastructure needs are urgent and badly in need of funding. However our governments are only just waking up to the realisation that government need not go it alone.

The old model of government determining to build one project or the other, sourcing donor funding and building has left the region littered with white elephants that serve little or no productive use. The private sector, the major employers of the infrastructure need to be more involved in deciding what we build and what we do not build.

Groups like Centum have shown that we have more than adequate resources among us to look after ourselves.

Donor funding has its limits, as we learnt with Bujagali, and local capital which has a better understanding of local conditions, less risk averse and patriotic is definitely where we need to be looking.

1 comment:

  1. All this stuff is common sense but where are the politicians.Bet they like the status quo.Fuel is going to hit the 4000 ushs mark by July.N the revolution starts.

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