Chapter 10 The Jealousy of Roads: Construction, Circulation and Competition on East Africa’s Transport Corridors

Hugh Lamarque; Paul Nugent

Chapter 10

The Jealousy of Roads: Construction, Circulation and Competition on East Africa’s Transport Corridors

Hugh Lamarque

Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expense.1 David Hume, ‘Of the Jealousy of Trade’, Walker’s Hibernian Magazine, or Compendium of Entertaining Knowledge, May 1785–December 1811, pp. 623–25.

1 David Hume, ‘Of the Jealousy of Trade’, Walker’s Hibernian Magazine, or Compendium of Entertaining Knowledge, May 1785–December 1811, pp. 623–25. »

Introduction

This chapter investigates some of the more abstract questions about transport corridors and geopolitics: How is corridor development shaped by competition? Under what conditions is trading infrastructure that spans multiple states mutually beneficial? When, and for whom, is a trading corridor a threat? In approaching these questions, I draw on interview material with officials, corridor users and freight forwarders from across East Africa, supplemented by news reports, government documents, and by my own observations travelling the region in the passenger seats of freight vehicles between 2017 and 2019.

Rwanda’s capital city, Kigali, stands at a critical junction in East Africa’s road network – a nodal point where importers and exporters make a choice about their route to the coast (see Maps 10.1 and 10.2). Heading north, freight vehicles embark on the 1,660-kilometre Northern Corridor, crossing two international borders through Uganda and Kenya to the port of Mombasa. Heading south-east, they travel the 1420-kilometre Central Corridor to the Tanzanian port of Dar es Salaam. Both routes have undergone significant changes in recent years – with much more scheduled to follow – and decisions made in Kigali offer a valuable lens into their different characteristics.

A great many groups are involved in planning, building, using and benefitting from East Africa’s transport corridors, and their divergent interests complicate analysis of the politics underlying their competition. In approaching the topic, it is important to note that corridor competitiveness is not the same thing as corridor attractiveness from the perspective of road and rail users. This distinction is valuable and can often be overlooked. Corridors compete not only to be used, but also to be funded and built. A second, related distinction is drawn between groups that generate revenue from corridor access and those for which access is an expenditure. Dominating the first category are entrepreneurial elites, very often embedded in state institutions, who play a significant role in shaping East Africa’s corridor development. These gatekeepers pursue a fine balancing act between maximising the circulation of people and goods along a corridor and maximising the revenue that can be extracted from them: activities that are inherently in tension. The monopolising spirit of elites involved in infrastructure development has prompted a dialectical relationship between the Central and Northern Corridors, with changes to either one giving rise to changes in the other. The process does not always sit comfortably with the needs of importers, drivers and passengers.

Approaching transport corridors in this manner brings regional geo-politics to the forefront of analysis. The distribution of gatekeeping revenue among groups involved in the development of transport infrastructure has become a central feature of state power in the region, where large-scale transport infrastructure informs election campaigning, coalition formation and international disputes.1 See: Michael Bratton and Mwangi S. Kimenyi, ‘Voting in Kenya: Putting Ethnicity in Perspective’, Journal of Eastern African Studies, 2:2, 2008, pp. 272–89; Nic Cheeseman, Gabrielle Lynch and Justin Willis, ‘Decentralisation in Kenya: the Governance of Governors’, The Journal of Modern African Studies, 54:1, 2016, pp. 1–35. An official discourse of complementarity among states in the regional economic community masks a contentious decision-making process that must account for potentially damaging path dependencies, collective action and sequencing problems, and high-risk strategies for first-movers. What follows proceeds in four sections: a theoretical background, a timeline of developments along the Northern and Central Corridors, empirical comparisons of movements and shipments in each case, and an analysis of their competition.

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Map 10.1. The Northern Corridor, Mombasa–Kigali. (Source: Author.)

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Map 10.2. The Central Corridor, Dar es Salaam–Kigali. (Source: Author.)

1 See: Michael Bratton and Mwangi S. Kimenyi, ‘Voting in Kenya: Putting Ethnicity in Perspective’, Journal of Eastern African Studies, 2:2, 2008, pp. 272–89; Nic Cheeseman, Gabrielle Lynch and Justin Willis, ‘Decentralisation in Kenya: the Governance of Governors’, The Journal of Modern African Studies, 54:1, 2016, pp. 1–35. »

Competition or Complementarity?

The term ‘transport corridor’ is used here in a straightforward descriptive sense, referring to overland transport infrastructure, connecting large urban centres, containing at least one seaport, and spanning at least one international border.1 Cf. Jean-Paul Rodrique, ‘The Geography of Global Supply Chains: Evidence from Third-Party Logistics’, Journal of Supply Chain Management, 48:3, 2012, pp. 15–23; Fraser & Notteboom, 2010; Albie Hope and John Cox, Development Corridors, London, 2015. As in the maps above, they very often involve a central artery, with smaller off-shoots extending from them. The overall effect resembles a river basin, with tributaries joining a core pathway – though notably in this case the flow of goods and people moves in both directions. Transport corridors can become essential avenues for international trade, often involving road, rail and other modes of transport simultaneously.2 Hope and Cox, Development; Pradeep Srivastava, Regional Corridors Development in Regional Cooperation, Asian Development Bank Economics Working Paper Series, 258, Washington, D.C., 2011.

The subject of corridor competition has given rise to a growing literature that investigates infrastructural strategies and best practices, corridor co-ordination, the interaction of gateway ports and corridors, and corridor attractiveness.3 Theo Notteboom, ‘Strategies and Future Development of Transport Corridors’, Les Corridors de Transport, 2012, pp. 289–311; John Arnold, et al., Best Practices in Corridor Management, No. 45128, pp. 1–51, Washington, D.C., 2005; Martijn R. Van Der Horst and Peter W. De Langen, ‘Coordination in Hinterland Transport Chains: A Major Challenge for the Seaport Community’, Maritime Economics & Logistics, 10:1–2, 2008, pp. 108–129; Notteboom & Rodrigue, 2005; Fraser & Notteboom, 2014. While productivity rests on proximity to ‘markets, customers, competitors, supporting industries, and governments’, competition between corridors is most often understood in terms of the expansion of seaport capacity and the efficiency of transport operations.4 Wim Naudé, The Financial Crisis of 2008 and the Developing Countries, No. 2009/01 WIDER Discussion Paper, Helsinki, 2009; Monios & Lambert, 2013. This chapter takes a different approach, exploring concepts in classical political economy to offer a framework for understanding the geopolitical repercussions when corridors compete.

Writing on competition between states in industrialising Europe, David Hume observes how the logic of war and the logic of trade become blurred at the level of government decision-making.5 Hume, ‘Jealousy of Trade’; Istvan Hont, Jealousy of Trade: International Competition and the Nation-state in Historical Perspective, Cambridge, 2005. This is not a natural development, he argues, since war produces a winner at the expense of a loser, while the natural state of trade is one of mutual benefit. What Hume calls the jealousy of trade arises when commercial success becomes a matter of political and military survival.6 Hont, Jealousy of Trade, p. 7. It is grounded in the political influence of a powerful mercantile class, combined with a misconception among elites about the threat posed by thriving neighbours. Hume considers the jealousy of trade to be a corruption of thinking that, in the most extreme cases, brings Hobbesian jealousy of state into the realm of economic exchange and makes the balance of military power inseparable from the balance of economic power.7 Hont, Jealousy of Trade, p. 8.

Writing in the same period, Jean-Francois Mélon reasons that, among states with distinct manufacturing specialities, trade rests on necessity, produces mutual reciprocity, and may act as a stabilising force in geopolitics.8 Bindon & Mélon, 1738. Once one state becomes more diversified in its manufacturing, it gains the power to deprive its neighbours of goods without suffering in return. This behaviour can amount to a case for war on the part of those who are cut out of the supply chain.9 Hont, Jealousy of Trade, p. 31. Even where all the states involved are effectively self-sufficient, the instability lingers. Trade is pursued not out of absolute necessity, but for ‘profit, economic growth and luxury’.10 Hont, Jealousy of Trade, p. 31. It can be used as leverage in order to maximise each of these ends, or else as a political tool to punish rivals. In this context, what makes trade warlike is the jealousy among sellers looking for new markets and increased profits. This mercantile jealousy, Adam Smith writes, ‘inflames, and is itself inflamed by the violence of national animosity’.11 Adam Smith, The Wealth of Nations: An Inquiry into the Nature and Causes of the Wealth of Nations, Petersfield, 1776 [2010], IV.iii 2.13. From the moment that merchants become the trusted councillors of the governing elite, he argues, their expert council teaches the state the jealousy of trade.12 Smith, Wealth of Nations, IV.iii 2.13; Hont, Jealousy of Trade, p. 55.

Some are more vulnerable to the jealousy of trade than others. According to Hume, the only states that should fear the improvements and industry of their neighbours are those who ‘flourish only by being the brokers, the factors, and carriers of others’.13 Hume, ‘Jealousy of Trade’, p. 2. It is natural, Hume argues, for states of this nature to be apprehensive about their neighbours, who may at any moment ‘take into their own hands the management of their affairs’, depriving brokering states of their source of revenue.14 Hume, ‘Jealousy of Trade’, p. 2.

In order to apply these concepts to contemporary events, it is necessary to introduce the divergent interests of actors representing the state. I draw on a literature in political and sociological theory that regards the state as an arena of power rather than an agent in its own right.15 See Mann, 1984; Abrams, 1988. Competition within this arena forces trade-offs that economic institutions do not have to make, balancing the interests of politicians, civil servants, voters, and powerful non-state actors.16 Terry M. Moe, ‘Political Institutions: The Neglected Side of the Story’, Journal of Law, Economics & Organisation, 6, 1990, pp. 213–53. Add to this the pressures of distributing gatekeeping revenue and the difficulty of predicting the impact of government investment on trade flows, and corridor development becomes shrouded in conflicting motivations, economic uncertainty and political risk.17 See also: Jean-Paul Rodrigue, ‘Transportation and the geographical and functional integration of global production networks’, Growth and Change, 37:4, 2006, pp. 510–25.

These theoretical discussions resonate with contemporary accounts of geopolitics in the East African Community (EAC). The idea of economic equilibrium as a substitute for military equilibrium is a common feature in high-level meetings at the EAC and is echoed in the language of its fourth ‘pillar’ on political federation.18 East African Community, ‘EAC Integration Pillars’ <www.eac.int/integration-pillars> [Accessed 12 November 2019]. Hume’s call for regional collaboration is reflected in the public statements of national leaders, who, in public at least, continue to stress the complementary nature of infrastructure linking East African territories.19 For example, when Kenya’s President Uhuru Kenyatta was asked about the impact of a Uganda decision to circumvent Kenya and export oil through Tanzania, he responded: “I have always said that my view of our region is a region not in competition with itself but complementing each other with a view of competing with the rest of the world. I do not see the central corridor as a threat to our northern corridor. I don’t see it as a threat at all’. Kenyatta, 2016, quoted in: ‘In his Own Words – President Kenyatta’s Take on Issues of the Day”: Capital FM, Nairobi), 20 June 2016 <www.capitalfm.co.ke/news/2016/06/in-his-own-words-president-kenyattas-take-on-issues-of-the-day/> [Accessed 27 April 2021]. The infiltration of the merchant class into state decision-making can be seen in the rise of public–private partnerships and in accusations of the illegal manipulation of tenders.20 These groups were commonly nicknamed ‘Tenderpreneurs’. Meanwhile, the language of fierce nationalism pervades news reports on the development of the Northern and Central Corridors.21 Frictions over corridor investments are routinely described in militaristic language; see, for example: ‘Magufuli Meets Kenyatta to Discuss Trade Row’, 23 February 2018.

1 Cf. Jean-Paul Rodrique, ‘The Geography of Global Supply Chains: Evidence from Third-Party Logistics’, Journal of Supply Chain Management, 48:3, 2012, pp. 15–23; Fraser & Notteboom, 2010; Albie Hope and John Cox, Development Corridors, London, 2015. »

2 Hope and Cox, Development; Pradeep Srivastava, Regional Corridors Development in Regional Cooperation, Asian Development Bank Economics Working Paper Series, 258, Washington, D.C., 2011. »

3 Theo Notteboom, ‘Strategies and Future Development of Transport Corridors’, Les Corridors de Transport, 2012, pp. 289–311; John Arnold, et al., Best Practices in Corridor Management, No. 45128, pp. 1–51, Washington, D.C., 2005; Martijn R. Van Der Horst and Peter W. De Langen, ‘Coordination in Hinterland Transport Chains: A Major Challenge for the Seaport Community’, Maritime Economics & Logistics, 10:1–2, 2008, pp. 108–129; Notteboom & Rodrigue, 2005; Fraser & Notteboom, 2014. »

4 Wim Naudé, The Financial Crisis of 2008 and the Developing Countries, No. 2009/01 WIDER Discussion Paper, Helsinki, 2009; Monios & Lambert, 2013. »

5 Hume, ‘Jealousy of Trade’; Istvan Hont, Jealousy of Trade: International Competition and the Nation-state in Historical Perspective, Cambridge, 2005. »

6 Hont, Jealousy of Trade, p. 7. »

7 Hont, Jealousy of Trade, p. 8. »

8 Bindon & Mélon, 1738. »

9 Hont, Jealousy of Trade, p. 31. »

10 Hont, Jealousy of Trade, p. 31. »

11 Adam Smith, The Wealth of Nations: An Inquiry into the Nature and Causes of the Wealth of Nations, Petersfield, 1776 [2010], IV.iii 2.13. »

12 Smith, Wealth of Nations, IV.iii 2.13; Hont, Jealousy of Trade, p. 55. »

13 Hume, ‘Jealousy of Trade’, p. 2. »

14 Hume, ‘Jealousy of Trade’, p. 2. »

15 See Mann, 1984; Abrams, 1988. »

16 Terry M. Moe, ‘Political Institutions: The Neglected Side of the Story’, Journal of Law, Economics & Organisation, 6, 1990, pp. 213–53. »

17 See also: Jean-Paul Rodrigue, ‘Transportation and the geographical and functional integration of global production networks’, Growth and Change, 37:4, 2006, pp. 510–25. »

18 East African Community, ‘EAC Integration Pillars’ <www.eac.int/integration-pillars> [Accessed 12 November 2019]. »

19 For example, when Kenya’s President Uhuru Kenyatta was asked about the impact of a Uganda decision to circumvent Kenya and export oil through Tanzania, he responded: “I have always said that my view of our region is a region not in competition with itself but complementing each other with a view of competing with the rest of the world. I do not see the central corridor as a threat to our northern corridor. I don’t see it as a threat at all’. Kenyatta, 2016, quoted in: ‘In his Own Words – President Kenyatta’s Take on Issues of the Day”: Capital FM, Nairobi), 20 June 2016 <www.capitalfm.co.ke/news/2016/06/in-his-own-words-president-kenyattas-take-on-issues-of-the-day/> [Accessed 27 April 2021]. »

20 These groups were commonly nicknamed ‘Tenderpreneurs’. »

21 Frictions over corridor investments are routinely described in militaristic language; see, for example: ‘Magufuli Meets Kenyatta to Discuss Trade Row’, 23 February 2018. »

Transport Corridor Development in East Africa

Following the collapse of the formal economic community between Kenya, Uganda and Tanzania in 1977, large-scale infrastructural projects in East Africa were put on hold, international highways degraded, and railways went into systematic decline. It was not until the mid-1990s that a formalised economic partnership was revived in the form of the EAC, with a secretariat in Arusha, Tanzania. In 2004, a protocol for the new customs union was ratified, followed by an EAC Customs Management Law that replaced the East African Customs Act of 1960.1 David Booth, et al., East African Prospects; An Update on the Political Economy of Kenya, Rwanda, Tanzania and Uganda, ODI Report, Nairobi, 2014. New common import tariffs to the region were enforced in March 2005. In September 2006, the governments of Burundi, DRC, Rwanda and Uganda formed the Central Corridor Transit Transport Facilitation Agency (TTFA). One year later, in 2007, the Northern Corridor Transit and Transport Agreement (NCTTA), a treaty originally signed in 1985, was significantly revised and resubscribed to by the governments of Burundi, DRC, Kenya, Rwanda and Uganda. The years that followed mark a new phase of large-scale infrastructural investments in East Africa. In railway, road and port developments, the results have been dramatic, and transit times for containers passing from the ports to cities in the hinterland have fallen by as much as 80 per cent.2 ‘Dar es Salaam Port Increases Rwanda, Domestic Cargo’, Tanzania Daily News, Dar es Salaam, 2 December 2016.

Similar large-scale infrastructural investments can be seen across the continent. Observers have attributed this shift in priorities to a range of factors; notably high commodity prices, recent technological developments, pushes for greater regional integration, and a drive for more neoliberal modes of governance.3 Ulf Engel and Paul Nugent, ‘Introduction: The Spatial Turn in African Studies’, in Respacing Africa, Leiden, 2009, pp. 1–9. A recent surge in competitive general and presidential elections has also played a significant role, as governing parties use large-scale infrastructural investments as flagship policies with visible results. Individual projects, even when funded and constructed separately, do not exist in isolation. They form part of larger infrastructural systems – in this case the ambitious corridor initiatives connecting ports in Dar es Salaam and Mombasa with cities throughout East and Central Africa. These systems, in turn, are being constructed in the context of one another.

1 David Booth, et al., East African Prospects; An Update on the Political Economy of Kenya, Rwanda, Tanzania and Uganda, ODI Report, Nairobi, 2014. »

2 ‘Dar es Salaam Port Increases Rwanda, Domestic Cargo’, Tanzania Daily News, Dar es Salaam, 2 December 2016. »

3 Ulf Engel and Paul Nugent, ‘Introduction: The Spatial Turn in African Studies’, in Respacing Africa, Leiden, 2009, pp. 1–9. »

Timeline of Major Developments

The Northern and Central Corridors consist of thousands of kilometres of road and rail, with each section in a state of perpetual degradation, repair and replacement. A comprehensive overview of every amendment, tariff change, resurfacing, added ring road, flyover, or bridge, is beyond the scope of what is possible here. Instead, I draw on a series of interviews with Kenyan, Ugandan, Rwandan and Tanzanian stakeholders conducted between 2017 and 2019. Those interviewed include freight forwarders, transporters, logistics managers, clearance agents, dock workers, dry port operators, journalists and representatives of shipping lines, trading associations and government agencies. In early 2019 I travelled the length of the Northern Corridor in the passenger seat of a large freight vehicle, and draw further material from this extended, four-day ‘interview’ with the driver and with the various corridor users we encountered along the way. I asked interviewees to recount the key flashpoints in corridor development that have occurred over the past 20 years. These accounts have been compiled into a timeline below. Supplementing interview material, I make a heavy use of the accounts circulating in newspaper print media from across the region, drawing on over 400 articles in total. Although these sources contain information on which many East Africans base their own opinions about infrastructural developments, I acknowledge that newspaper accounts are not always reliable, especially when it comes to statistical data. I make use of these sources for facts and figures only in cases where I have been able to triangulate the material through interview accounts and other sources. Nevertheless, the repeated narrative accounts circulating in national and regional press serve as a valuable thermometer for popular sentiment on international competition. Rather than map every change in the development of the two corridors, the purpose here is to identify the decisions, incidents and infrastructures that stakeholders consider central to competition between the rival routes.

In May 2005, the train ferry MV Kabalega, operated by the Uganda Railways Corporation, collided with the passenger ferry MV Kaawa on Lake Victoria.1 ‘Uganda Now Moving to Revive Transport and Trade on Lake Victoria’, The East African, Nairobi, 15 November 2018. Both vessels were rendered unserviceable, severing containerised trade across the lake between Mwanza (Tanzania) and Port Bell (Uganda). The ports declined significantly, with the result that Ugandan access to Dar es Salaam became restricted to road connections via Kigali in Rwanda. The distance and expense involved in the route gave the Kenyan port of Mombasa close to a total monopoly of Uganda maritime trade.2 ‘Will Uhuru Kenyatta Mediate Uganda, Rwanda Row?’, The East African, 12 March 2019.

Three years later, in January 2008, widespread violence rocked Kenya in the aftermath of a fiercely contested general election.3 ‘Will Economy Survive Kenya’s Post-Election Fears?’ The Monitor, 25 October 2017. The event paralysed regional trade and left the hinterland states suspicious of an overreliance on goods transiting Kenya. Political instability in Kenya triggered a fuel shortage throughout the Great Lakes Region, pushing up prices and resulting in significant political backlash against governments in the hinterland.4 ‘Ugandan Traders Turn to Dar Port as Kenya Polls Close In’, The Monitor, 23 June 2017. Key sections of the Northern Corridor around Kisumu in western Kenya and Nakuru in the Rift Valley were impassable in the immediate aftermath of the election, and widespread insecurity saw freight vehicles hijacked and their containers stolen. Importers were left out of pocket by over US$US40 million, with insurance voided and compensation unforthcoming.5 ‘Ugandan Traders on Edge Over Kenya Election Results’, The East African, 12 August 2017.

These events set the stage for the respective development of the Northern and Central Corridors in the years since. Ugandan importers, suspicious of an over-reliance on routes through Kenya, looked to make greater use of Tanzania as a ‘back door’ – insurance against similar disruptions in the future.6 Kampala-Dar es Salaam: Another Route Uganda Should Consider?, The Monitor, 8 March 2017. In spite of the greater distances involved circumnavigating Lake Victoria, Ugandans began using the southern route more frequently to trade in coffee, motor vehicles, wheat, building materials and fuel. Both corridors suffered from poor quality infrastructure, limited logistical services, costly bureaucratic procedures and a host of non-tariff barriers to trade.7 ‘Bribery, Red Tape Still Dog Trade on Central Corridor’, The New Times, 27 February 2018. When Rwanda and Burundi joined the EAC in 2009, the Central Corridor through Tanzania proved a more natural, shorter and less bureaucratic route to the sea for the new members than transiting goods through Uganda to the Kenyan port of Mombasa. Freight transiting Rwanda to Dar es Salaam began to steadily grow in volume.

This situation endured, with periodic infrastructural improvements along each route, until July 2014, when a single customs territory (SCT) along the Northern Corridor was put into effect by the presidents of Kenya, Uganda and Rwanda.8 ‘EAC Trade, Free Movement of Goods Machinery Starts’, Tanzania Daily News, 6 November 2018. The SCT was accompanied by an agreement to construct a standard gauge railway (SGR) along the route, the first phase of which would link Mombasa with Nairobi. At its inception, the line was intended to continue across Kenya to Kisumu in west of the country, where it would link up with a line constructed in Uganda connecting it to Kampala, then Kigali, and ultimately as far as Juba in South Sudan and Kisangani in DRC. Funding for the first phase was secured from the Chinese Export Import (EXIM) Bank, a build-operate-transfer agreement was negotiated with the China Road and Bridge Company (CRBC), and construction began in 2016.

The rush of developments on the Northern Corridor in 2015–2016 coincided with the election of President Magufuli in Tanzania. Magufuli stood on a staunchly nationalist platform and, within a year of inauguration, Tanzania had refused to implement EAC Economic Partnership Agreements (EPAs) and introduced protectionist policies on commodities including fertiliser, paper, cement, sugar and furniture.9 ‘Tanzania Keeps Walking a Thin Line on EAC Deals’, The Citizen, 14 September 2016. Tanzania began a US$593 million renovation of the port of Dar es Salaam, adding new berths and increasing container storage capacity.10 ‘Congrats TPA for Reaching Out to Potential Customers’, Tanzania Daily News, 18 October 2016. Simultaneously, the Tanzanian government began work planning its own SGR, and construction began on the first phase – 300 kilometres from Dar es Salaam to Morogoro.11 ‘Standard Gauge Railway Tenders Announced’, Tanzania Daily News, 9 November 2016. The railway deal was signed between state-owned Reli Assets Holding Company Ltd (RAHCO) and the Turkish firm Yapi Merkezi, in joint venture with Portugal’s Mota-Engil Engenharia e Construção Africa.12 ‘SGR Construction Means Big Business to Local Firms’, Tanzania Daily News, 7 February 2017. Among Magufuli’s early commitments as president was to raise the national budget allocation for developmental and infrastructural projects from 26 per cent to 40 per cent.13 ‘Magufuli’s Signature Projects get More Funding’, The East African, 19 December 2016.

In 2016, with Phase I of Kenya’s SGR well under construction, the grand designs of Kenyan authorities were hit by two simultaneous setbacks. First, Rwanda withdrew entirely from the Northern Corridor SGR project, citing cost concerns and the possibility of a more affordable line connecting the Rwandan capital Kigali to Dar es Salaam port via Isaka in Tanzania.14 Estimates suggested the Isaka connection would cost Rwanda up to US$200 million less than connecting to the Northern Corridor. Almost simultaneously, Uganda withdrew from a joint oil pipeline scheme with Kenya in favour of a route south through Tanga port in Tanzania. Uganda authorities stalled the initial construction of the country’s own SGR from Kampala to the Kenyan border.15 ‘Uganda Government Puts SGR on Hold Over Unresolved Issues’, The Monitor, 30 October 2018; ‘Uganda, Tanzania Oil Pipeline Deal Unlocks More Funding Options’, The East African, 27 May 2017. This was justified by parliamentary accusations that the US$2.3 billion price tag for the line had been inflated, and by a report from the engineering procurement and construction contractor CHEC that certain aspects of the project were unnecessary.16 ‘Uganda May Join Dar as Kenya Weighs Options of Extending SGR to Malaba’, The East African, 21 May 2017. Ugandan authorities turned instead to the rehabilitation of the metre gauge connecting Kampala with Port Bell, and set about renovating the facilities for cross-lake trade.17 ‘Kampala Upbeat with Dar Port, Central Railway Line Facelift’, Tanzania Daily News, 6 June 2018. By mid-2017, Uganda and Tanzania had signed a memorandum of understanding on joint ministerial co-operation and improvements of ports, inland waterways and railway transport.18 ‘Port Bell to Kampala Line due to Reopen’, The Observer, 23 April 2018. As Phase I of the Kenyan SGR was launched, not a single kilometre of the Ugandan line had been laid. Trade between Kenya and Uganda stagnated at approximately US$280 million in the 2016–2017 period.19 ‘The Good, the Bad and the Ugly of Kenya’s SGR Cargo’, The Nation, 30 October 2018; ‘Kenya, Uganda to Upgrade the Suam Border Crossing’, The East African, 27 August 2017.

On 1 June 2017, the Kenyan SGR passenger service opened to the public. A freight service came into operation later in the year, rapidly scaling up the number of services per day. With low-cost passenger services accompanied by port regulations that required up to 40 per cent of all containerised goods to exit the port by rail, the train has radically changed the transport landscape in Kenya. The line has since been extended to link up with large inland container depots (ICDs) at Naivasha in the Rift Valley north of Nairobi. These developments have not been without controversy, and have exacerbated a political rift between central government in Nairobi and municipal authorities in Mombasa. Coastal residents accuse the government of shifting the most lucrative elements of the port – the handling, clearance and storage of goods – to the heartlands of the governing elite. The economy of the port town has suffered, particularly those working in the public transport and freight haulage industries.

President Kenyatta has tended to dismiss these concerns as the inevitable repercussions of what are otherwise grand improvements in the country’s capacity to trade. Combined with the construction of a series of large new berths at Mombasa capable of housing Panamax-sized vessels, the expansion of port capacity through an additional container terminal, and the streamlining of clearance through a single-window system, the container throughput of the port has surpassed one million TEUs (twenty-foot equivalent units) per year, growing at a rate of approximately 10 per cent annually since 2014.20 Growth of TEU capacity, ODI Report. In August 2017, two months after Tanzania began upgrading its Nyahua–Chanya road and its Chalinze Expressway to a six-lane carriage way, Kenya signed a binding agreement with Betchel International (US) to design, build and operate a new expressway connecting Mombasa and Nairobi.21 ‘Tanzania: Kuwait Grants Tz 109 billion for Central Corridor Road Project’, Tanzania Daily News, 22 March 2017.

The second half of 2017 was marked by two Kenyan elections, the first in August and the second in October, following a ruling from the Kenyan Supreme Court that nullified the first result. Although both elections were conducted peacefully, the economic uncertainty surrounding them caused serious disruption of supply chains along the Northern Corridor and importers in the hinterland were reluctant to continue operations until the political situation had been resolved.22 ‘Uganda on High Alert as Kenya, Rwanda go to polls’, The Monitor, 30 July 2017. Interviewees frequently offered this disruption as further justification for Ugandan and Rwandan authorities’ efforts to diversify their access to the sea, and to increase their use of the Central Corridor.23 ‘Is Kagame Looking for an Alternative Route to the Sea?’, The Monitor, 11 March 2019.

2018 compounded the Kenyan vision of a united East Africa linked by rail to the port of Mombasa. In March 2018, Rwanda and Tanzania agreed on an electric SGR with an open tender, and Rwanda began construction of the line east of Kigali.24 ‘Rosier Future as Rwanda Gets Star Borrower Ratings’, The East African, 2 June 2018. Part of the negotiation included the simultaneous reduction in road user charges, already synchronised between Tanzania and Rwanda, which fell to approximately US$150 per freight vehicle.25 ‘DRC, Uganda Engaged on Road User Fee’, Tanzania Daily News, 1 March 2018. Uganda was given land to construct its own ICD in Mwanza, Tanzania, and the Uganda Railway Corporation, the Tanzania Ports Authority, the Tanzania Railways Corporation and the Marine Services determined a tariff rate of US$60–70 per 20 foot containers crossing the lake (significantly less expensive than the cost of road transport).26 ‘Port Bell to Kampala Rail Line due to Re-open’, The Observer, 23 April 2018. In June 2018, a 900-tonne capacity cargo ship landed at Port Bell from Mwanza for the first time since the collision of the MV Kabalega and the MV Kaawa in 2005.27 ‘Uganda Focuses on Old Railway’, The East African, 3 November 2018. According to the World Food Programme (WFP), the route across the lake cut transit time from Kampala to Dar es Salaam by approximately 50 per cent, and costs by 40 per cent.28 ‘Optimism High on Re-Opened Mwanza-Port Bell Route’, Tanzania Daily News, 14 August 2018.

Kenya quickly struck back, offering Uganda a significant land holding to construct an ICD in Naivasha.29 ‘A Shot in the Arm for Kenya’s Railway Project as Uganda Buys Into the Deal’, The East African, 30 March 2019. The intention was to incentivise Ugandan authorities to stay true to their original commitments on the Northern Corridor SGR. Kenyan authorities remain concerned about the prospect of a Uganda–Tanzania railway agreement, with upgraded railways connecting Dar es Salaam to Mwanza, and Port Bell to Kampala. With Uganda accounting for over 80 per cent of all transit cargo passing through Mombasa, a competing railway linking Kampala to the Tanzanian port and offering as little as four-day shipping times constitutes a very real threat to Kenyan interests.30 ‘Cargo Destined to Uganda to Take Four Days From Dar Port’, East African Business Week, 22 February 2018. The situation was escalated further by Tanzanian plans to introduce an international tea auction in Dar es Salaam, aiming to rival the Kenyan monopoly in Mombasa.31 ‘Will Uhuru’s Visits Reconcile Uneasy Neighbours Rwanda and Uganda’, The East African, 17 March 2019.

In 2019, deteriorating diplomatic relations between Rwanda and Uganda radically altered the playing field for international trade along the transport corridors. On 27 February 2019, Rwandan authorities closed their two largest border posts with Uganda, severing freight trade with its northern neighbour. Thirty-seven Kenyan vehicles were left stranded, and it was only after a period of absolute disruption to the Northern Corridor that trade between Rwanda and Kenya resumed.32 Ibid. Trade between Rwanda and Uganda remains on hold. The details of the closure are disputed and tied into historical enmities between Ugandan and Rwandan elites.33 ‘Sibling Rivalry Turns Ugly’, Africa Confidential¸ 60:6, 22 March 2019. Uganda has publicly accused Rwanda of introducing trade barriers, while Rwandan importers have, for most commodities, been forced to pivot their operations south where they had not done so already.34 ‘Uganda, Rwanda Better Off Together Than Divided’, The Monitor, 10 March 2019.

In April 2019, Kenyatta returned from China having failed to secure a US$3.6 billion loan required for Phase III of the Northern Corridor SGR, intended to connect Naivasha with the town of Kisumu close to the Uganda border. The government of Kenya was instead given US$400 million to upgrade the metre line that spans the same route. The extension of the line has struggled for two principal reasons. First, China’s EXIM bank has voiced concerns about the debt burden involved and in Kenya’s capacity to pay.35 ‘Regional Countries Have Accumulated $651.8 Million in Development Loans’, The East African, 12 August 2018. This situation was not helped by financial mismanagement scandals and negative press surrounding Phase I of the line. The second reason is the increasing uncertainty about the possibility of extending the line beyond the Kenyan border into Uganda. Feasibility studies suggest the cost of Phase III, linking Naivasha over five hundred kilometres to the western Kenyan town of Kisumu, is unjustifiable unless it gives access to the Ugandan capital Kampala in the short to medium term.36 More critical analysis suggests the line is not viable if it fails to extend the full distance to Bujumbura in Burundi, see: ‘Kenya Finds Going Tough With Its Regional Partners’, The Nation, 2 August 2016. This is not guaranteed, as Ugandan authorities have lowered the priority of developing the SGR on their side of the border in favour of relaunching trade across Lake Victoria to Tanzania.

1 ‘Uganda Now Moving to Revive Transport and Trade on Lake Victoria’, The East African, Nairobi, 15 November 2018. »

2 ‘Will Uhuru Kenyatta Mediate Uganda, Rwanda Row?’, The East African, 12 March 2019. »

3 ‘Will Economy Survive Kenya’s Post-Election Fears?’ The Monitor, 25 October 2017. »

4 ‘Ugandan Traders Turn to Dar Port as Kenya Polls Close In’, The Monitor, 23 June 2017. »

5 ‘Ugandan Traders on Edge Over Kenya Election Results’, The East African, 12 August 2017. »

6 Kampala-Dar es Salaam: Another Route Uganda Should Consider?, The Monitor, 8 March 2017. »

7 ‘Bribery, Red Tape Still Dog Trade on Central Corridor’, The New Times, 27 February 2018. »

8 ‘EAC Trade, Free Movement of Goods Machinery Starts’, Tanzania Daily News, 6 November 2018. »

9 ‘Tanzania Keeps Walking a Thin Line on EAC Deals’, The Citizen, 14 September 2016. »

10 ‘Congrats TPA for Reaching Out to Potential Customers’, Tanzania Daily News, 18 October 2016. »

11 ‘Standard Gauge Railway Tenders Announced’, Tanzania Daily News, 9 November 2016. »

12 ‘SGR Construction Means Big Business to Local Firms’, Tanzania Daily News, 7 February 2017. »

13 ‘Magufuli’s Signature Projects get More Funding’, The East African, 19 December 2016. »

14 Estimates suggested the Isaka connection would cost Rwanda up to US$200 million less than connecting to the Northern Corridor. »

15 ‘Uganda Government Puts SGR on Hold Over Unresolved Issues’, The Monitor, 30 October 2018; ‘Uganda, Tanzania Oil Pipeline Deal Unlocks More Funding Options’, The East African, 27 May 2017. »

16 ‘Uganda May Join Dar as Kenya Weighs Options of Extending SGR to Malaba’, The East African, 21 May 2017. »

17 ‘Kampala Upbeat with Dar Port, Central Railway Line Facelift’, Tanzania Daily News, 6 June 2018. »

18 ‘Port Bell to Kampala Line due to Reopen’, The Observer, 23 April 2018. »

19 ‘The Good, the Bad and the Ugly of Kenya’s SGR Cargo’, The Nation, 30 October 2018; ‘Kenya, Uganda to Upgrade the Suam Border Crossing’, The East African, 27 August 2017. »

20 Growth of TEU capacity, ODI Report. »

21 ‘Tanzania: Kuwait Grants Tz 109 billion for Central Corridor Road Project’, Tanzania Daily News, 22 March 2017. »

22 ‘Uganda on High Alert as Kenya, Rwanda go to polls’, The Monitor, 30 July 2017. »

23 ‘Is Kagame Looking for an Alternative Route to the Sea?’, The Monitor, 11 March 2019. »

24 ‘Rosier Future as Rwanda Gets Star Borrower Ratings’, The East African, 2 June 2018. »

25 ‘DRC, Uganda Engaged on Road User Fee’, Tanzania Daily News, 1 March 2018. »

26 ‘Port Bell to Kampala Rail Line due to Re-open’, The Observer, 23 April 2018. »

27 ‘Uganda Focuses on Old Railway’, The East African, 3 November 2018. »

28 ‘Optimism High on Re-Opened Mwanza-Port Bell Route’, Tanzania Daily News, 14 August 2018. »

29 ‘A Shot in the Arm for Kenya’s Railway Project as Uganda Buys Into the Deal’, The East African, 30 March 2019. »

30 ‘Cargo Destined to Uganda to Take Four Days From Dar Port’, East African Business Week, 22 February 2018. »

31 ‘Will Uhuru’s Visits Reconcile Uneasy Neighbours Rwanda and Uganda’, The East African, 17 March 2019. »

32 Ibid. »

33 ‘Sibling Rivalry Turns Ugly’, Africa Confidential¸ 60:6, 22 March 2019. »

34 ‘Uganda, Rwanda Better Off Together Than Divided’, The Monitor, 10 March 2019. »

35 ‘Regional Countries Have Accumulated $651.8 Million in Development Loans’, The East African, 12 August 2018. »

36 More critical analysis suggests the line is not viable if it fails to extend the full distance to Bujumbura in Burundi, see: ‘Kenya Finds Going Tough With Its Regional Partners’, The Nation, 2 August 2016. »

Two Ports, Two Roads, Two Railways

Table 10.1. Timeline of Northern and Central Corridor developments.

Year	Event
2000 (signed in 2009)	Treaty establishing the East African Community (EAC) (originally Uganda, Tanzania and Kenya) comes into effect.
2004	Protocol for a new East African customs union is ratified by Uganda, Kenya and Tanzania
2005	Common import tariffs come into effect throughout the EAC.
	The collision of MV Kabalega and MV Kaawa effectively halts trade between Uganda and Tanzania across Lake Victoria.
2006	The Central Corridor Transit Transport Facilitation Agency (TTFA) is launched.
2007	The Northern Corridor Transit and Transport Agreement (NCTTA) is revised and renewed.
2008	A major disruption to international trade results from the violent aftermath of the 2007 Kenyan elections.
2009	Rwanda and Burundi join the EAC.
2013	President Uhuru Kenyatta elected in Kenya.
	Kenya, Uganda and Rwanda institute a Single Customs Area.
2015	The EAC Elimination of Non-Tariff Barriers to Trade Bill is signed, but implementation remains patchy.
	President John Magufuli elected in Tanzania.
	Tanzania pushes a protectionist economic agenda regarding key commodities.
2016	Construction begins on Phase I of the Northern Corridor SGR, linking Mombasa to Nairobi.
	Rwanda withdraws from the Northern Corridor SGR.
	Uganda withdraws from an oil pipeline project with Kenya in favour of a route through Tanzania.
	Ugandan authorities assert that they will not begin construction of the SGR to the Kenyan border until the Kenyan SGR is guaranteed to reach the western Kenyan town of Kisumu.
March 2017	The government of Kuwait releases a US$47 million loan to Tanzania to being construction on a Nyahua–Chanya highway along the Central Corridor.
August 2017	The government of Kenya signs a binding agreement with Betchel International (US) to design, build and operate an expressway linking Mombasa and Nairobi.
2017	Construction begins on Phase I of the Central Corridor SGR, linking Dar es Salaam with Morogoro.
	The Kenyan SGR launches between Mombasa and Nairobi.
	President Uhuru Kenyatta is re-elected in October after a disputed August poll. Political uncertainty stalls trade.
2018	Rwanda and Tanzania agree on electric SGR with an open tender.
	Rwanda and Tanzania reduce road fees in each other’s favour.
	Uganda is given land to construct ICD in Mwanza, Tanzania
	A 900-tonne freight ship lands in Port Bell (Uganda) from Mwanza (Tanzania) for the first time in over a decade.
	Kenya offers Uganda land in Naivasha to construct a large inland container depot.
2019	Rwanda closes its two largest border posts with Uganda, restricting Northern Corridor trade.
	The Chinese EXIM bank refuses to loan Kenya the money required for Phase III of the SGR, linking ICDs in Naivasha with Kisumu in the west of the country.

Source: Author.

The timeline in Table 10.1 shows a clear pattern in which developments to either one of East Africa’s two largest transport corridors prompts changes to the other. Beyond the headline events recounted here, a similar pattern can be seen in the more mundane developments along each route, with greater seaport container capacity, more dry ports, more paved highways, and other incremental improvements mirroring each other in the two cases.

Considering the extensive developments that have occurred over the past 20 years, the question arises whether one corridor has outcompeted the other. This cannot be answered at the domestic level of the coastal states, since Mombasa and Dar es Salaam remain subject to autarchic polices regarding port traffic.1 This situation may change if the Kenyan Ports Authority continues with a plan to construct a large inland container terminal in Taita Taevta on the Tanzania border, which would ‘bring competition to the doorstep of the neighbouring country’; see: ‘East Africa Ports in Fresh Push to Attract Shipping Lines’, The East African, 15 January 2018. It is only once goods transit out of (or enter in from outside of) Tanzania and Kenya that real competition begins.2 See also Hoyle & Charlier, 1988. Since importers in the Rwandan capital make regular use of seaports at both Mombasa and Dar es Salaam, Kigali a practical site to illustrate different dimensions of corridor competition along the two roads. As a starting point for comparison, I make use of seven factors that determine competition between the trading corridors: distance from gateway to market, cost from gateway to market, transit time in days, relative logistics performance index scores, political stability, security issues and environmental conditions – looking at each from the perspective of road and railway users.3 The index scores are an interactive benchmarking tool implemented by the World Bank: see <https://lpi.worldbank.org/> [Accessed 1 November 2019]; see Pelletier & Alix 2011.

1 This situation may change if the Kenyan Ports Authority continues with a plan to construct a large inland container terminal in Taita Taevta on the Tanzania border, which would ‘bring competition to the doorstep of the neighbouring country’; see: ‘East Africa Ports in Fresh Push to Attract Shipping Lines’, The East African, 15 January 2018. »

2 See also Hoyle & Charlier, 1988. »

3 The index scores are an interactive benchmarking tool implemented by the World Bank: see <https://lpi.worldbank.org/> [Accessed 1 November 2019]; see Pelletier & Alix 2011. »

Corridor Attractiveness: Distance, Expense, Speed, Bureaucracy and Security

Examining the Northern and Central Corridors from the position of importers and exporters in Kigali, many of the key metrics of corridor attractiveness favour Dar es Salaam over Mombasa. Detailed statistical analyses of freight on each route can be found through the annual reports of the respective transport corridor authorities.1 Northern Corridor Transport Observatory (NCTO), Annual Report 2018, Nairobi, 2019; Central Corridor Transport Observatory (CCTO), Annual Report 2017, Dar es Salaam, 2018. Underlying these statistics is the fact that the Tanzanian port is approximately 220 kilometres closer over land than its Kenyan rival. Furthermore, the Northern Corridor journey involves crossing two borders, choke-points in which system failures, extortion and long queues are all significant risks. Border concerns feature prominently in the complaints of freight forwarders, despite the introduction of one stop border posts at Busia (Kenya)–Busia (Uganda), at Gatuna (Rwanda)–Katuna (Uganda).2 ‘Who Will Gain Most from Busia Joint Border Post’, The Monitor, 28 February 2018. The additional distance through Kenya and Uganda is reflected in transportation costs, which were approximately 20 per cent higher on shipments from Mombasa than Dar es Salaam in early 2019.3 Interview, Freight Logistics Manager, Kigali, 17 March 2019; See also: NCTO, Annual Report; CCTO, Annual Report. Although freight forwarders with whom I spoke tended to be cautiously optimistic about the prospects of the railway improving shipping in the medium to long term, the introduction of Phases I and II of the Kenyan SGR, which transfers containers directly from the coast to Nairobi and Naivasha, was not considered to have made a significant difference to the expense or the time taken to deliver containers to the hinterland.

Over 70 per cent of Rwandan maritime trade passes through Dar es Salaam, strongly suggesting that time and cost remain the fundamental determinants of corridor attractiveness.4 ‘Relief as Tanzania Ports Authority Open Liaison Office in Kigali’, The New Times, 15 August 2016. Nevertheless, it is worth noting that averaging gateway to market costs and timings can be misleading in East Africa, where the duration and expense of shipments vary enormously depending on the nature of the cargo, drivers’ experience, vehicle quality and the cost of fuel.5 For a detailed analysis of expenditure on the corridors, see: Andreas Eberhard-Ruiz and Linda Calabrese, Would More Trade Facilitation Lead to Lower Transport Cost in the East African Community? ODI Briefing Paper, London, 2017; Andreas Eberhard-Ruiz and Linda Calabrese, Trade Facilitation, Transport Costs and the Price of Trucking Services in East Africa, ODI Briefing Paper, London, 2017. Importers with whom I spoke tended to be dismissive of statistics claiming one route to be superior to the other and stressed that the major improvements were down to reduced clearance time rather than transport time.6 See also NCTTCA, 2019; Eberhard-Ruiz and Calabrese, Trade Facilitation, Transport Costs. They emphasised the fact that it is only recently that the overall time taken from a container at the port to reach Rwanda could be counted in days, rather than weeks, and the difference of a few days between shipping times was secondary to reliability. They also noted that, given Tanzania’s protectionist policies on certain commodities, they were left with no choice but to look to Mombasa for the import of goods such as fertiliser and paper.

Whether the corridors perform efficiently or otherwise depends in large part on the skill, networks and prior knowledge of the transporters and freight forwarders involved with each shipment. Although performance indexes are available through the corridor authorities, the way in which informal networking overcomes institutional inertia is extremely difficult to capture and even harder to institute through policy.7 Monios & Lambert, 2013. Different companies have radically different experiences of the roads and, according to interviewees, there is little to separate them in logistical terms, except the fact, mentioned above, that the Northern Corridor involves two border crossings. Even this was not always cited as a reason to favour the Tanzanian route, since it affords opportunities as well as potential delays. Importers bringing goods to Kigali from Dar es Salaam were not always assured of a backload, and often return to the port with empty containers. This was much less likely for vehicles transiting Uganda on the Northern Corridor, which could pick up goods from Kampala on their way back to Kenya.

Political stability is tied closely to issues of security on both corridors. The aftermath of the 2007 Kenyan election remains fresh in the minds of importers and freight forwarders throughout the region, and interviewees spoke of a difficult period and of unpaid debts owed to transporters who lost vehicles and consignments. Kenyan elections since have triggered a great deal of anxiety for those involved in the transit trade. Outside of Nairobi, the 2007/2008 crisis centred on the Rift Valley west of Naivasha, and in Kisumu in the country’s west – both of which lie in the path of the Northern Corridor. Drivers still consider these areas dangerous and try to limit their time on roads there, especially after dark. Stories of banditry on the Rift Valley’s steeper climbs – in which slow-moving trucks become a target – circulate widely throughout the East African transport network.

In Tanzania, by contrast, the election of John Magufuli and his emphasis on national security is seen by many to have had a stabilising effect. Rather than concerns surrounding political dissidents, protests and electoral violence, drivers and importers were more concerned with what they perceive to be increasing xenophobia in the Tanzanian population and in the attitudes of state representatives.8 ‘Why Mombasa Remains Port of Choice for Uganda Even When Crisis Strikes’, The East African, 25 August 2017. Importers in Rwanda consistently complained that, while Tanzania has the biggest trucking fleet in the region, Tanzanian drivers and their assistants tended to lack the same level of professionalism and training as those from elsewhere. They felt pressured to make use of Tanzanian transporters since they were less likely to encounter harassment from officials and from other drivers. Off the roads, interviewees also cited well-publicised examples of goods disappearing in Dar es Salaam port as a reason to be cautious of trade through Tanzania.9 In 2016, the Rwandan company Mineral Supply African Ltd and another shipper, Trading Services Logistics (TSL), lost minerals worth US$2 million in Dar es Salaam port. See: ‘Regional Traders Continue to Face Hurdles on Central Corridor’, The New Times, 27 July 2016.

In terms of environmental conditions, drivers did not consider the roads dissimilar. Both consist of two lanes of tarmac in relatively good repair, although with some sections degrading faster than others.10 NCTTCA, 2019. The chief concern in both cases was that, lacking a central divide and with a poorly enforced speed limit, the road produced a very high number of head-on collisions. According to figures from Kenya’s National Transport and Safety Authority and Tanzania’s Central Corridor Transport Observatory, thousands of lives are lost on the corridors each year.11 ‘Alarm Over Increased Road Crashes’, The Nation, 14 May 2017; See also: NCTTCA, 2019; CCTO, Annual Report. Hillslopes in both corridors were considered highly dangerous, especially where they lacked climbing lanes or where climbing lanes were misused by drivers. Stretches of each road that saw freight vehicles travelling through urban neighbourhoods were particularly disliked by drivers due to the prevalence of 14-seat Matatu minibuses, which were considered notorious for causing collisions.

1 Northern Corridor Transport Observatory (NCTO), Annual Report 2018, Nairobi, 2019; Central Corridor Transport Observatory (CCTO), Annual Report 2017, Dar es Salaam, 2018. »

2 ‘Who Will Gain Most from Busia Joint Border Post’, The Monitor, 28 February 2018. »

3 Interview, Freight Logistics Manager, Kigali, 17 March 2019; See also: NCTO, Annual Report; CCTO, Annual Report. »

4 ‘Relief as Tanzania Ports Authority Open Liaison Office in Kigali’, The New Times, 15 August 2016. »

5 For a detailed analysis of expenditure on the corridors, see: Andreas Eberhard-Ruiz and Linda Calabrese, Would More Trade Facilitation Lead to Lower Transport Cost in the East African Community? ODI Briefing Paper, London, 2017; Andreas Eberhard-Ruiz and Linda Calabrese, Trade Facilitation, Transport Costs and the Price of Trucking Services in East Africa, ODI Briefing Paper, London, 2017. »

6 See also NCTTCA, 2019; Eberhard-Ruiz and Calabrese, Trade Facilitation, Transport Costs. »

7 Monios & Lambert, 2013. »

8 ‘Why Mombasa Remains Port of Choice for Uganda Even When Crisis Strikes’, The East African, 25 August 2017. »

9 In 2016, the Rwandan company Mineral Supply African Ltd and another shipper, Trading Services Logistics (TSL), lost minerals worth US$2 million in Dar es Salaam port. See: ‘Regional Traders Continue to Face Hurdles on Central Corridor’, The New Times, 27 July 2016. »

10 NCTTCA, 2019. »

11 ‘Alarm Over Increased Road Crashes’, The Nation, 14 May 2017; See also: NCTTCA, 2019; CCTO, Annual Report. »

Path Dependencies, Network Effects, First Movers and Speculation

Corridor competition extends beyond importer and exporter convenience, reflecting the fact that corridors have two distinct categories of stakeholder: those who extract revenue from access to the corridor, and those for whom corridor access is an expenditure. Corridors compete not only to be used, but also to be built, a process that can conflict with the metrics of corridor attractiveness discussed above. In East Africa, government sponsorship is essential to the development of large-scale infrastructure, commonly involving presidential interventions. Presidents Kenyatta, Museveni, Magufuli and Kagame have all had a direct hand in shaping the Northern and Central Corridors; signing off on key initiatives, negotiating in multinational forums and inaugurating new services.

For states developing transport corridor infrastructure, the extension of routes into the hinterland is subject to a network effect, in which the value of the service increases with the number of people using it.1 Naudé, The Financial Crisis of 2008; Piet Buys, Uwe Deichmann, and David Wheeler, Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa, Washington, D.C., 2006. This incentivises coastal states to push for extensions to the corridors linked to their ports. The process often involves more than one mode of transportation, and the use of dry ports to fight for markets further inland.2 See Hoyle & Charlier, 1988. This requires a different approach to the norm for infrastructure development in the region, which has tended to be fragmented, relatively uncoordinated, and to have a predominantly national focus.3 Naudé, The Financial Crisis of 2008.

The decision by Kenyan authorities to develop the Northern Corridor, furnishing the route with a standard gauge railway, large inland container depots and modern highways, was based on the idea that increasing circulation and creating stronger trade partnerships with states in the African interior was in Kenya’s best interest. The project involves a high degree of path dependency, due to a combination of high setup costs, learning effects, co-ordination efforts and adaptive expectations.4 See also Martin, 2000. Uganda and Rwanda are differently incentivised: as hinterland states, their best interest lies in diversifying access to the sea, especially considering Kenya’s reputation as an unreliable trading partner in times of political unrest.

The asymmetry of incentives between coastal and hinterland states creates collective action problems in infrastructure development. Commitments, especially long-term ones, are not always credible.5 Naudé, The Financial Crisis of 2008. Elsewhere, hinterland access regimes have been given the autonomy required to counter some of these problems.6 Peter W. De Langen and Ariane Chouly, ‘Hinterland Access Regimes in Seaports’, European Journal of Transport and Infrastructure Research, 4:4, 2004, pp. 361–80. In East Africa, the corridor authorities have struggled in this regard. Resolutions are not always implemented, and national and EAC regulations are not always harmonised.7 See, for example, ‘Ugandan Traders Ask Tanzania to Harmonise Cargo Transit Fees’, The Monitor, 15 December 2016; ‘Is it Time the EAC Walks the Integration Talk’, The New Times, 28 July 2016. The construction of the Northern Corridor SGR is a clear example of the risks involved. In the absence of effective third-party enforcement, the project required a high degree of speculation on the part of government authorities in Kenya. Estimates have suggested the line will only become viable after it is extended beyond Uganda into Rwanda, Burundi and DRC, while its passenger service is likely to be permanently subsidised by freight on the line.

Rwanda’s withdrawal from the Northern Corridor SGR in favour of a joint venture with Tanzania was not as concerning to Kenyan authorities as the prospect of losing the country’s effective monopoly on Uganda’s access to the coast. Simultaneously, Uganda’s decision to delay construction on its SGR line to the Kenyan border until the Kenyan line to Kisumu is complete, on the back of its withdrawal from a shared oil pipeline, were both serious setbacks to Kenyan interests in the hinterland.8 ‘East Africa’s Joint Mega Railway Project at the Crossroads’, The East African, 28 January 2019. If Uganda were to construct an SGR linking Kampala with Dar es Salaam via Lake Victoria, one interviewee suggested it would constitute the biggest humiliation in President Kenyatta’s career.9 Interview, Journalist, Nairobi, 10 January 2019.

These events raise an important question: under what conditions is moving first in corridor infrastructural development a disadvantage at the level of inter-state competition? Interviewees suggested that Kenya may suffer as a result of its early enthusiasm for large-scale, multilateral corridor projects. The Tanzanian SGR was planned in the aftermath of Kenya’s, and authorities responsible for it have learnt lessons from their neighbours to the north. Estimates for the Tanzanian SGR, with funding secured through the Turkish EXIM bank and not the Chinese EXIM bank, have been significantly lower than the Kenyan line, despite the former being electrified and the latter running on diesel.10 ‘Turkish Involvement in Railway Project Time’, The Citizen, 25 January 2017. The decision to opt for an open tender stands in obvious contrast to Kenya’s closed arrangements with the Chinese Road and Bridge Company (CRBC).11 ‘Rwanda, Tanzania Agree on Electric SGR, Opt for Open Tender’, The East African, 18 March 2018. The comparisons have already attracted negative press towards the Kenyan project, while the appeal of the Tanzanian alternative was enough to sway Rwandan authorities into switching sides.

1 Naudé, The Financial Crisis of 2008; Piet Buys, Uwe Deichmann, and David Wheeler, Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa, Washington, D.C., 2006. »

2 See Hoyle & Charlier, 1988. »

3 Naudé, The Financial Crisis of 2008. »

4 See also Martin, 2000. »

5 Naudé, The Financial Crisis of 2008. »

6 Peter W. De Langen and Ariane Chouly, ‘Hinterland Access Regimes in Seaports’, European Journal of Transport and Infrastructure Research, 4:4, 2004, pp. 361–80. »

7 See, for example, ‘Ugandan Traders Ask Tanzania to Harmonise Cargo Transit Fees’, The Monitor, 15 December 2016; ‘Is it Time the EAC Walks the Integration Talk’, The New Times, 28 July 2016. »

8 ‘East Africa’s Joint Mega Railway Project at the Crossroads’, The East African, 28 January 2019. »

9 Interview, Journalist, Nairobi, 10 January 2019. »

10 ‘Turkish Involvement in Railway Project Time’, The Citizen, 25 January 2017. »

11 ‘Rwanda, Tanzania Agree on Electric SGR, Opt for Open Tender’, The East African, 18 March 2018. »

Gatekeepers, Geopolitics and the Jealousy of Infrastructure

The states described up to this point should not be seen as unitary, autonomous actors.1 See Abrams 1988 Even where presidential interventions serve to launch new initiatives, corridor development is subject to complicated internal negotiations among rival ministries and stakeholders, and external negotiation with donors, lenders, construction firms, operators and special interest groups. The overarching agenda may be to facilitate trade, but decisions remain contentious due to limited funds, conflicting priorities and secondary agendas.

States in East Africa are under particular pressure to provide an attractive entrepreneurial culture capable of drawing in mobile international capital. To indicate the scale involved, Tanzania’s Finance Minister, Dr Phillip Mpango, estimated over US$20 billion of private funds would be needed in the country’s five-year development plan from 2016 to 2021, while estimates of the regional investment in scheduled transport infrastructure upgrades range up to US$100 billion.2 ‘Private Sector Key to Devt Plan Success – Mpango’, Tanzania Daily News, 6 February 2017. In 2017, Kenyan authorities announced a US$3.6 billion price tag for five of its key road projects – with the addition that tolling would be key to the projects’ financial success.3 ‘Region Plans to Charge for Use of Major Highways’, The East African, 30 March 2017. The use of public–private partnerships is strongly encouraged in regional agreements, and article 128 of the Treaty for the Establishment of the EAC emphasises strengthening private sector involvement as a key partner in EAC integration.4 ‘East Africa Private Sector Feted for Integration Efforts’, The East African, 31 March 2018; ‘New Thrust for Efforts to Improve Trade, Investments in East Africa’, Tanzania Daily News, 16 April 2019. The result is the significant influence of private sector actors in state-sanctioned roles, reminiscent of the rise of mercantile elites in the early discussions of Smith and Hume.5 Peter Hall, Markus Hesse, and Markus Jean-Paul, ‘Reexploring the interface between economic and transport geography’, Environment and Planning A, 38, 2006, pp. 1401–08.

One of the key attractions for private sector actors involved in the development of transport infrastructure is the potential to extract revenue available to gatekeepers of the trading route. Transport corridors embody the interface between the national and the international – and provide a wealth of what Cooper would consider ‘gatekeeping’ revenue, in transit fees, container storage, warehousing, loading and unloading, parking, parking security, cleaning fees, fuel costs, road tariffs and demurrage, among others.6 Frederick Cooper, Africa Since 1940: The Past of the Present, Cambridge, 2002; ‘KPA Evacuates Cargo at its Nairobi Inland Container Terminal’, The East African, 3 July 2018. All of these sources of revenue come under threat when hinterlands overlap and alternative routes open up through separate territories. When influenced by gatekeeper elites, the logic of the corridor is to maximise circulation, maximise particular forms of revenue extraction, and to minimise competition.

Does this logic result, as the managing director of Maersk Line East Africa has argued, in ‘healthy competition’ between the two corridors, ‘both fighting for position in terms of some of the swing countries that could export or import cargo through either corridor’?7 Steve Felder, Managing Director, Maersk East Africa, Quoted in ‘Central Corridor Performs Badly in First Quarter of this Year’, The Citizen, 29 June 2017. The case offers up a mixed picture over the last 20 years. On the one hand, rapid developments have occurred along each route, often mirroring those along the other, and have dramatically reduced the port-to-market time for containerised goods. Nevertheless, the tension between revenue extraction and trade facilitation is evident in the frustration of importers and corridor users in both cases. The majority of importers, drivers and freight forwarders with whom I spoke were suspicious of the large-scale corridor development projects, especially the upgrading of metre gauge railways to a standard gauge. Many would have preferred the investment to have targeted upgrading the road network with a four-lane highway and spoke cynically about the opportunities for personal profit afforded by both railways and by the privately owned ICDs that they serve. The removal of non-tariff barriers along the route was described by one interviewee as a ‘game of whack-a-mole’, in which new fees emerged as quickly as others were done away with.8 One example is the $40 transit stickers introduced for containers in Tanzania in 2016. See: ‘Removal of NTBs Paying Dividends Despite New Setbacks’, The New Times, 11 August 2016.

Perhaps a greater indictment of healthy competition between the two corridors can be found in the breakdown of diplomatic relations between Rwanda and Uganda in early 2019. The situation has its roots in complex personal disputes and historical conflict dating back to the 1990s.9 ‘Sibling Rivalry Turns Ugly’, Africa Confidential¸ 60:6, 22 March 2019. Nevertheless, it has been manifested in the weaponisation of the Rwanda–Uganda border, the severance of trade between the two states, and a push by Rwandan authorities to minimise reliance on the Northern Corridor for the import and export of essential goods. Although Kenyan vehicles are allowed in and out of Rwanda at present, drivers speak of a great deal of uncertainty each time they reach the border post. The East African Business Council (EABC) has complained openly about the unresolved issues, and Kenya’s President Kenyatta has repeatedly toured the Great Lakes pushing for trade assurances and for resolution to the dispute.10 ‘Why Kenya is Threatened by Uganda-Rwanda Standoff’, The Exchange, 13 March 2019; ‘Will Uhuru’s Visits Reconcile Uneasy Neighbours Rwanda and Uganda’, The East African, 17 March 2019.

This is the point at which Hume’s jealousy of trade finds a strong parallel in contemporary events. The development of transport corridors constitutes an investment in brokering revenue, rather than manufacturing revenue, making states especially vulnerable to the aggressive manoeuvring of their neighbours. Uganda’s decision to renege on its commitments to extend developments begun at great expense in Kenya, Rwanda’s choice to sever trade relations with Uganda and to suspend joint infrastructural commitments, and Tanzania’s choice not to implement EPAs and to roll out protectionist policies on essential commodities, all speak to the precariousness of the situation. Print media have framed events in militaristic language, with the situation between Rwanda and Uganda, as well as between Kenya and Tanzania, being described as ‘trade wars’ where the cities of Nairobi, Kampala, Kigali and Dar es Salaam are involved in a ‘game of check-mating’.11 ‘Magufuli Meets Kenyatta to Discuss Trade Row’, The Daily Nation, 23 February 2018; ‘A Shot in the Arm for Kenya’s Railway Project as Uganda Buys into the Deal’, The East African, 30 March 2019.

The threats involved in the geopolitics of infrastructure extend beyond the economic damage that can be exerted on regional rivals. The distribution of gatekeeping revenue, infrastructural contracts, and the political capital that accompanies improvements to local infrastructure, all form central components in political coalition building in East Africa. The capacity for neighbouring states to undermine all three and potentially to saddle neighbours with heavy debt burdens based on projects that are no longer economically viable, equips them with an existential threat to the governing elites across their borders.

1 See Abrams 1988 »

2 ‘Private Sector Key to Devt Plan Success – Mpango’, Tanzania Daily News, 6 February 2017. »

3 ‘Region Plans to Charge for Use of Major Highways’, The East African, 30 March 2017. »

4 ‘East Africa Private Sector Feted for Integration Efforts’, The East African, 31 March 2018; ‘New Thrust for Efforts to Improve Trade, Investments in East Africa’, Tanzania Daily News, 16 April 2019. »

5 Peter Hall, Markus Hesse, and Markus Jean-Paul, ‘Reexploring the interface between economic and transport geography’, Environment and Planning A, 38, 2006, pp. 1401–08. »

6 Frederick Cooper, Africa Since 1940: The Past of the Present, Cambridge, 2002; ‘KPA Evacuates Cargo at its Nairobi Inland Container Terminal’, The East African, 3 July 2018. »

7 Steve Felder, Managing Director, Maersk East Africa, Quoted in ‘Central Corridor Performs Badly in First Quarter of this Year’, The Citizen, 29 June 2017. »

8 One example is the $40 transit stickers introduced for containers in Tanzania in 2016. See: ‘Removal of NTBs Paying Dividends Despite New Setbacks’, The New Times, 11 August 2016. »

9 ‘Sibling Rivalry Turns Ugly’, Africa Confidential¸ 60:6, 22 March 2019. »

10 ‘Why Kenya is Threatened by Uganda-Rwanda Standoff’, The Exchange, 13 March 2019; ‘Will Uhuru’s Visits Reconcile Uneasy Neighbours Rwanda and Uganda’, The East African, 17 March 2019. »

11 ‘Magufuli Meets Kenyatta to Discuss Trade Row’, The Daily Nation, 23 February 2018; ‘A Shot in the Arm for Kenya’s Railway Project as Uganda Buys into the Deal’, The East African, 30 March 2019. »

Conclusion

This chapter has focused on the geo-political competition underlying transport corridor development in East Africa. The events and initiatives analysed here were identified by a range of corridor stakeholders interviewed between 2017 and 2019 as key flashpoints for competition. Looking closely at the timeline of developments since 2000, several central observations can be made.

The first is the continuity with the past. The rise and fall of the first East African Community between 1967 and 1977 was driven by many of the same dynamics that exist in the region today. Despite significant infrastructural and technological changes, the underlying structural conditions of the region remain the same as those identified in previous studies now decades old.1 See, for example, Hoyle & Charlier, 1988. Two seaports – Dar es Salaam and Mombasa – dominate trade flows in and out of East Africa. The hinterland access regimes extending out from them do not compete at the domestic level between Tanzania and Kenya. Fierce competition for cargo begins once they reach the landlocked states of Rwanda, Uganda, Burundi, South Sudan and DRC. This dynamic produces different incentives for the coastal and hinterland states when it comes to corridor development. While Kenyan and Tanzanian authorities look to monopolise trade flows through ‘their’ corridor, the states further inland look to diversify their access to the sea.

Second is the accelerating rate of competition. Since 2010, the infrastructural development of the Central and Northern Corridors has progressed rapidly and come to resemble an arms race, with developments along one route being quickly matched by the other. The picture is more complicated than a simple dialectic in which the corridors continually become more attractive to road users, importers and exporters. Recent disruption resulting from the global pandemic, which began shortly after the fieldwork for this chapter, is unlikely to alter this trajectory in the mid-long term. The development of the two corridors is being driven both by the logic of trade facilitation (measured in TEU throughput per year and the time taken for a container to move from seaports to hinterland markets), and by the logic of revenue extraction, in which both public and private sector actors seek to re-co-operate some of the expense of costly corridor development investments through formal and informal fees and tariffs.

Third is the geo-political tension provoked by corridor development. Recent years have highlighted some of the dangers of moving first and relying on neighbouring states to stay true to their earlier commitments. Considering that coalitions and political campaigns are built on the success or failure of grand projects, the stakes are raised with each perceived success or failure. A development such as the Kenyan SGR is both extremely costly and path dependent, especially considering that its long-term viability depends on significant extensions into the hinterland. Uganda’s decision to de-prioritise linking up its own railway with the Kenyan line and focus on developing trade across Lake Victoria to Tanzania has frustrated Kenyan authorities and highlighted the heavy debt burden that phase I and II of the Kenyan SGR project have incurred. Tanzania and Rwanda were able to learn lessons from the Kenyan experience and apply them to their own SGR project. Meanwhile, Rwanda’s closing of its northern border to Ugandan traders, and Tanzania’s decision not to implement regional EPAs, highlight the fragility of corridor initiatives; as one interviewee remarked “even among siblings, the nation comes first”.

1 See, for example, Hoyle & Charlier, 1988. »

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Chapter 10 The Jealousy of Roads: Construction, Circulation and Competition on East Africa’s Transport Corridors

Transport Corridors in Africa

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