Standard Gauge Railway Blow.

Story by Vincent Mageto,

 While Kenya’s Standard Gauge Railway offers a cheaper more efficient transport option for cargo it has also resulted in job losses.

SGR Train at Mombasa terminus photo courtesy of Google

The multibillion-shilling SGR offers its services to landlocked countries in East Africa, and so far container traffic has grown fourfold, with the Inland Container Depot (ICD) in Nairobi handling up to seven cargo trains daily from just one when the freight service was launched in December 2017.
The ICD has also benefited after cargo clearance was moved from Mombasa to Nairobi. In 2019, the SGR hauled close to nine million tonnes of cargo to Nairobi after the government introduced ex-hook railage where cargo is offloaded directly from the ship to the wagon.
The initial phase of the project running from Mombasa to Nairobi was completed in 2017 and is operational with 14 freight and 4 passenger trains while the second phase – Nairobi-Naivasha SGR – is currently under construction.For centuries, Mombasa’s economy has gravitated around the port but now its mainstay is facing a challenge in what some observers say is a slow and painful death.

“The transport sector is dying before our on eyes, firms are now laying off drivers, everything is moving to Nairobi,” said Kenya Transporters Association (KTA) Chief Executive Officer Dennis Ombok.
Despite the fact that the railway is a worthwhile project expected to bring in numerous socio-economic benefits and grow the country’s GDP by 1.5%, it is a two faced sword with demerits.
Here are the negative effects of the SGR on the Kenyan economy:
1.) Increased debt
Kenya’s public debt continues to burgeon and is now considered to be on the blink of unsustainable levels at 60% of the GDP.
So bad is the situation that the IMF has placed the country on its debt-distress watch list.
To salvage the situation, the government has rolled out measures to boost revenue collection for loan repayment such as introduction of VAT on zero rated items – raising the cost of living.
While the SGR is set to be a key catalyst for economic growth, it is funded with debt at a cost of Sh1.023 trillion, without interest, making it the largest single contributor to the ballooned debt and its negative effects.
2.) Market disruption
With reduced travel time and costs, coupled with safer travelling conditions, the SGR is set to become the preferred mode of transport for passengers and cargo owners hence taking a huge percentage of them off the roads.
Unfortunately, these positive aspects of the project are set to occasion diminished business and loss of income for truck and bus owners and job loss for drivers, turn boys and truck loaders.
3.) Collapse of towns
As SGR edges out trucks in long distance cargo transport, towns and market centers heavily reliant on trucks for business opportunities will be in danger of economic downfall as establishments such as hotels, bars, lodgings and garages collapse due to lack of customers.With their ruin, loss of livelihood for shop owners, mechanics, oil recyclers, and waiters will be imminent forcing them to migrate or change profession – which is costly and time consuming.

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