you are also sold into the Kenya-Tanzania rivalry thing? What you need to know, then, is that the sky is big enough for two birds to fly without colliding.
Apparently a titanic battle for geopolitical supremacy is raging in East Africa, or this is how the issue is being presented. Whether it is the tale of two railways or the tale of two ports, the tale of two airports or the tale of two cities, it appears that there is little that the two nations do that is not viewed with Kenya vs Tanzania lenses. The situation is presented in such a way that one nation’s gain automatically becomes another’s loss.
The increased strategic awareness between these nations aside, there is a danger of losing focus of bigger opportunities by competing for competition’s sake. The story of the two SGR railways provides one of the most bizarre examples of this situation.
Both Kenya and Tanzania are constructing SGR lines connecting their coasts with the hinterlands, including neighbouring landlocked countries. Given the relative neglect of railway infrastructures in the region for many decades, this is indeed welcome news.
Kenya’s ‘northern corridor’ is proposed to run from Mombasa to Kampala to Kigali. The now completed 580km Mombasa-Naivasha section, costing $3.6 billion, is the biggest infrastructure project in the history of Kenya, making it possible to travel between Nairobi and Mombasa in 4 hours.
Tanzania’s ‘southern corridor’ is planned to run from Dar to Kigali and subsequently to Bujumbura. Construction has already started on the 202km Dar to Morogoro section, and it is expected to be completed by December 2020. Work for Morogoro-Dodoma section will follow soon, ultimately ending up with the Isaka-Kigali section.
These projects have caused significant strain in regional relationships, with Rwanda ultimately ditching the northern corridor due to existing tensions with Uganda, and Uganda not committing to invest in SGR – for now, choosing to focus on the crude oil pipeline project instead.
Some may argue that Tanzania has ‘won’ this round. But what has it won exactly?
While Kenya and Tanzania were fixated on wooing partners for their projects, it appears that some key common-sensical questions were not asked. For example, why SGR?
A World Bank report entitled The Economics of Rail Gauge in the East Africa Community highlights two reasons to choose SGR over narrow gauge options: one, to ensure better interconnectivity between railways, and two, to realise the potential for higher speeds in SGR.
Since all the railway systems in the EAC region use a one-metre gauge, except the Tazara line, expanding those systems was a better option for interconnectivity. With respect to speeds, it is possible to achieve higher speeds than those anticipated in the region by using the narrow-gauge line, something which South Africa, Japan, and Australia have accomplished.
Moreover, given that the region only needs an annual capacity for 1.5 million tonnes today, and projected 14.5 million tonnes in 2030, why choose a 60 million tonnes SGR option while an upgraded narrow gauge option, at 15 percent of SGR option, would have sufficed?
That is exactly what EAC’s Canadian consultants and WB experts recommended, but somehow the region ended up paying billions of dollars, with about 60 percent of the investment in Kenya being spent outside of Kenya!
No amount of regional geopolitical fiddling would have made either of the SGR projects financially viable. Increase in the number of passengers along the Nairobi-Mombasa line aside, cargo demand is still relatively low, leading to a loss of $100 million in the first year of operation.
It looks like what is presented as a battle of the titans is at best vita vya panzi. The true titans are the ones pulling the strings behind these projects – pocketing the lions’ shares of the investments, plus interests.
The two railways lines, misguided as they are, should not have been pitched as an either-or option. The region requires greater investment in its railway network, and more stands to be gained through increased interconnectivity and trade than through tariffs charged from transit goods.
While EAC’s regional trade compares favourably with other blocs, it is still extremely low compared to advanced markets. And the trends have been negative lately – especially between the two countries in question, a situation that needs to be reviewed in line with free trade and EAC ideals that both nations subscribe to. After all, a 5 percent increase in exports within a regional bloc results in 0.5 percent increase in GDP. Not an opportunity that Kenyans and Tanzanians wish to miss.
Tanzania and Kenya need to let go of traditional zero-sum paradigms and pursue the economics of growth. Singapore doesn’t need to stagnate for Malaysia to grow. It is actually more desirable to have a Hong Kong next to a Shenzhen, and even a Havana next to a Miami.
We will continue digesting these ideas as we argue for increased integration rather than protection, collaboration rather than suspicion, and innovation rather than imitation.
If the pie is not big enough for both of you, the solution is to make it bigger.