In fullness of time, SGR will spur Kenya’s economy

Wednesday, November 27th, 2019 16:06 |
SGR train at Mombasa terminus. Photo/Courtesy

Kingori Choto 

Besides being the largest infrastructure project in post-independence Kenya, the Standard Gauge Railway (SGR), is also one of the most controversial and misunderstood in the country’s history. 

Its economic impact, cost, viability and potential has been the subject of intense debate, especially with the completion of the first two phases of the project. 

While some hail it as an economic game-changer, others term SGR a burden on the country, citing the high level of debt acquired to finance it.

Whatever the opinion, one thing is not in doubt—SGR is a highly transformational national enterprise. When fully harnessed, it will catapult the economies of many counties and the country as a whole to a new level.  

SGR is also a Vision 2030 flagship project, underlining its long-term role in Kenya’s social and economic development.

Phase One, completed in May 2017, and is now fully operational with 14 freight and four passenger trains. It hit most of its targets within one year, signaling demand for cargo and passenger traffic along the corridor.

For a project of this scale to be delivered within schedule is a lesson that with proper planning, political goodwill and zero corruption, the country can achieve its goal of becoming a middle income economy in the next few years. Of course, more needs to be done to ensure resources allocated to projects are shielded from cartels and political mischief.

Let’s put SGR into context from a county economy perspective. With the completion of Phase Two terminating in Suswa, Narok county, the SGR corridor now traverses several counties contributing a significant proportion of the GDP.

Three of these—Kajiado, Machakos and Kiambu—serve as the economic and social hinterland of the capital Nairobi.  Machakos and Kiambu are major industrial centres and linking them with the port of Mombasa through SGR enhances their industrial and manufacturing potential.  

Others like Mombasa, Kilifi, Taita Taveta and Narok, constitute major tourism hubs. The world famous Masai Mara Game Reserve in Narok attracts thousands of tourists each year.

Apart from tourism, Narok has the ability to become a major livestock producer. A large meat processing plant in Suswa, for instance, would be well served by the new railway connecting it to the port of Mombasa.

Besides unique tourist attractions, Nakuru is also a major energy generation hub and the home to Olkaria geothermal complex, one of the largest renewable energy projects in the world. The county also hosts the largest horticulture-producing firms, supplying global flower markets. 

An industrial park in Naivasha linking to Suswa would act as a large manufacturing hub and special economic zone attracting local and foreign investors, especially energy intensive enterprises that can utilise cheap geothermal power.

This is just part of the story. Providing an efficient transport corridor will have significant impact not just on tourism, agriculture, manufacturing and trade, but also forestry, fishing and mining industries, especially in counties where it passes and in contiguous zones linked by a reliable road network.

Quite often, we view counties merely as political units of governance while ignoring their bigger role in development. Yet one of the objects of devolution as per Article 174 of the Constitution is, inter alia, promotion of social and economic development.

Providing the right infrastructure, such as the SGR, is a catalyst for economic transformation at the counties. It help them stop over-relying on allocations from the National government.

The impact of SGR on devolution will be most clearly visible when the county economic corridor stretching from Mombasa to Suswa is fully activated.

This can only happen when counties along the route leverage the railway as an enabler of economic activity and a route to markets for their goods.

However, the benefits of SGR may take years or even decades to materialise. Projects of this magnitude rarely manifest their full impact and value in the short-term. It is not until their economic and social ecosystems mature that their transformational impact and value are visible.

Incidentally, the Metre Gauge Railway built by the colonialists was initially derided as a waste of money and resources. However, even historians acknowledge that the old railway line eventually became the lifeline of colonial economy.   

Built at a cost of over Sh400 billion, SGR is no doubt one of the most expensive projects in Kenya’s history. But that’s just a fraction of what the country loses to corruption annually—an estimated Sh800 billion.

Unlike many similar projects that were never completed or simply used as conduits for looting public resources, SGR is a shining example of focused leadership can deliver. 

The focus should be on the long-term value the country will ultimately derive from SGR.—The writer is a lawyer and public affairs specialist. [email protected] 

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