The SGR will be the game changer in East Africa’s regional trade
HABARI DAILY I Kampala, Uganda I Ground breaking of the construction of the 1,724km Standard Gauge Railway (SGR) is set to happen any minute from now, following Government’s release of preliminary funding towards the project.
On Wednesday last week, the finance ministry released Shs305.2 billion to the works ministry with a notice for the Turkish contractor, Yapi Merkezi, to begin work on the SGR immediately.
According to Henry Musasizi, the Minister of Finance in charge of General duties, construction of the 1,724 km SGR is long overdue.
“This planned Uganda SGR is supposed to link Uganda to the neighboring countries of Kenya, Rwanda, DR Congo and South Sudan as a way of integrating the regional economies and intensify the industrialization process,” he said while meeting members of the parliamentary committee on finance recently.
He said that since the SGR is part of the East African Railway Master Plan, Uganda risk being left behind.
“This measure will make imports more expensive, promoting import substitution and supporting local industries. It also aligns with Uganda’s policies with other East African Community member states such as Kenya, which charges a 2% CIF (Cost, Insurance and Freight) fee, and Tanzania, which imposes a 0.6% customs processing fee,” said Musasizi.
He vowed that the Government is set to introduce an import declaration fee on goods for home use, out of which it is expected to raise Shs79 billion.
“This revenue will be directed towards the construction of the SGR, which is a critical infrastructure project aimed at improving Uganda’s trade competitiveness,” he said.
Musasizi (M) meeting members of the parliamentary committee on finance recently
Fred Byamukama, Uganda’s state minister for Works and Transport, who recently represented Gen. Edward Katumba Wamala, Uganda’s works minister and Chairperson of the Joint Ministerial Committee on SGR at a regional meeting in Mombasa, where countries agreed on joint mobilisation of funding for the SGR, was upbeat about the new development.
He said they agreed to conduct joint financial mobilization for the project so that ground breaking takes place at the earliest moment.
Byamukama, who hailed the recently held Northern Corridor Integration Projects (NCIP) partner states meeting held in Mombasa, disclosed that the Ugandan Government has allocated Shs564 billion in the 2024/25 annual budget for construction of the standard gauge railway (SGR).
“Part of that money will cater for full settlement of claims by the project affected people (PAPs), payment for feasibility studies and other preliminary expenses to ensure that the project gets off the ground.”
Charles Ocici, Executive Director, Enterprise Uganda speaks on SGR
SGR is the way to go for many reasons. Firstly, with Uganda going to grow at the rate we are talking about, the coffee volumes are going to grow, other exports are also going to grow, and with those volumes, we will need the capacity that will improve the rapid delivery of our products to the market.
If we do not do that, we are going to have trucks lining up all the way from Malaba up to Kampala, and that will affect the logistics of the country. The SGR will also make the delivery of bulk cargo cheaper.
And the moment it is cheaper, it will improve on our competitiveness in terms of what we are exporting. And once our competitiveness improves, that can only improve the kind of returns that we will be giving to the people involved in the value chains of whatever we are selling. There will be better income for exporters because of better returns as a result of cheaper means of transport.
The speed factor when it comes to the SGR will enable traders get whatever they have ordered for on time. That also will again improve our competitiveness in the marketplace.
Additionally, the moment the SGR comes on, Government will improve the way other users of the road infrastructure will enjoy the roads, because the trucks will no longer be the irritation to other road users.
