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Infrastructure the Bedrock of Competitiveness in East Africa

September 1, 2011

NAIROBI, September 1, 2011—The Northern Corridor transport system snakes its way through Kenya to neighboring Uganda, opening up business opportunities in its wake. The corridor has become the most important link for Kenya and its landlocked neighbors, especially with the near collapse of the Lunatic Express, the Kenya-Uganda railway line that the British built over a century ago.

Transforming the Northern Corridor into a modern transport infrastructure is critical for business competitiveness.  On July 15, Kenya’s Prime Minister Raila Odinga launched the reconstruction of two road sections – one from Kericho westwards to Kisumu and the other eastwards towards Nakuru. The 136 km sections are part of the Northern Corridor, the most important transit road, not just for Kenya but for the East African region. The road links the port of Mombasa to Kenya’s interior, Uganda, Tanzania, Rwanda, Democratic Republic of Congo and the new republic of South Sudan.

Easing congestion in and around Nairobi

The 934 km journey from Mombasa through Nairobi and Kisumu to Busia on the Kenya-Uganda border takes on average 12 hours by car. It takes about the same time to use the other part of the corridor through Eldoret to Malaba border point—a distance of 927 km. That estimate assumes the entire corridor is in good condition and there are no hold-ups.

In reality, regular road users, like long-distance truckers, take much longer to cover the distance. Truckers carry over 2.2 million tons of goods annually through the corridor, according to the Kenya Transport Association (KTA)—a powerful lobby of road transporters. Freight traffic on the corridor has been growing at 20 percent a year, largely because the dilapidated railway system now carries less than five percent of cargo inland from Mombasa.

Traffic congestion through Nairobi’s Uhuru highway, a 12 km section of the Northern Corridor, which divides the capital city in two, takes one to two hours on average.  Nairobi residents crowd onto this short stretch of road with truckers and other drivers that are passing through, creating horrendous traffic jams.  Poorly-maintained sections of the Northern Corridor and frequent traffic accidents also slow down traffic flow. And occasionally, sections of the road are blocked for hours by citizens demanding one right or the other; recently, internally displaced persons caused a five-hour delay to traffic as they demanded to be resettled as promised by the government since 2008.

Traffic costs account for 30 percent of the value of goods along the corridor, says Jane Njeru, KTA’s Chief Executive, aggravating the final price that the consumers have to pay for the goods.

But still, things have changed significantly over the past 10 years. The government has become more responsive to people’s demands for better quality services.

 “The government is building modern transport infrastructure to open up and support the development of Kenya and the region,” according to Prime Minister Odinga.

Reducing travel times along the corridor

Improvement of all major roads is part of the government’s infrastructure development master plan, which is one of the pillars of Vision 2030—a social, economic and political blue print that is expected to push Kenya to middle income status in the next decade.

When the Northern Corridor improvement project was launched in 2004, the poor road conditions were a major bottleneck to both local and transit traffic and trade.

“It would take a truck over 24 hours from Mombasa to Malaba and Busia,” said Josphat Sasia, World Bank Task Team Leader for the Northern Corridor Transport Improvement Project. “The project has reduced bottlenecks and opened up trade and investment opportunities for Kenya and the larger East Africa region.”

In six years, three contracts covering 150 km have been completed and another two covering 88 km are expected to be completed in August 2011.  These have contributed to the reduction in travel time along the corridor by up to five hours.

The government, with the support of the Bank and other development partners, is committed to developing all the major corridors and improving feeder roads to give farmers in the rural areas access to markets.

The Northern Corridor project is an investment of US$920 million and includes components for improvement of Jomo Kenyatta International Airport in Nairobi and Kisumu Airport in the western region. The Bank is funding half of the total, while the balance comes from the government and other development partners, including the French Development Agency and European Investment Bank.

“We are working with the World Bank and other partners to develop highways that will facilitate traffic flow and improve road safety,” says Franklin Bett, Minister for Roads.

The corridor connects to other important road links, including a western corridor that runs from Isebania on the Kenya-Tanzania border through Kisumu to Kitale and Nadapal on the Kenya-Sudan border (894km). Large sections of this corridor are in poor state but thanks to a US$300 million transport improvement project, approved by the Bank in May 2011, part of the funds will finance the reconstruction works of 147 km from Kisumu to Kitale and works are expected to begin before the end of 2011.

Fulfilling old promises

Seeing is believing; motorists and residents along this corridor complain of years of neglect with empty promises, high costs of doing business and long travel times.

“When the road was good, it took one hour but it now takes nearly three hours to drive from Kisumu to Kakamega and I lose business due to frequent vehicle breakdowns,” says a bus driver with Eldoret Express who has been driving on this road for 36 years.  

Like the other users of this road, he hopes this time the government is not bluffing about giving them modern transport infrastructure.

Unlike the past, when funds were allocated and no projects done, the government is putting its money where its mouth is. This year, it has allocated over one billion dollars for the roads sector. Odinga recalls when he was minister for roads in 2003, the allocation for roads was less than US$200 million.

The government  has also established a structure for effective delivery of projects, with independent authorities for highways, urban roads and rural roads. These authorities have focused on  improving all categories of roads.

Safety on the roads is also a new feature of the modern highways development. Besides expanding the size of the roads, all projects now include road-side social amenities (four schools including nursery, primary and two secondary schools are either completed or nearing completion as part of the Northern Corridor project), climbing lanes on steep slopes, by-passes, pedestrian bridges and cycle paths to improve the safety of all road users. In May 2011, the government launched a major road safety campaign as part of the U.N. decade of action on road safety. With the Bank’s support, the endeavor is to reduce road traffic accidents, which cause 3,500 deaths annually.

Easing obstacles to doing business

The improvements on the Northern and Tanzania-Kenya-South Sudan corridors will contribute greatly to the ease of doing business in Kenya and Eastern Africa. How fast results are achieved largely depends on the pace of construction, a matter that both the government and citizens are taking seriously. Contractors are being loudly chastised for “shoddy” work and contract delays. Citizens are also demanding transparency and accountability in the allocation of public funds, exercising their expanded rights under the new constitution. The government, for its part, is in the process of establishing a National Construction Authority to regulate the construction industry.

These demands for social accountability, bigger and better budget allocations, and transport sector reforms are expected to increase opportunities for a better business environment for East African countries.