Study: SGR ruins Coast economy

Monday, September 16th, 2019 00:00 |
Mombasa Governor Hassan Joho.

Mombasa county’s contribution to the national economy has declined by Sh126 billion in two years as impact of Standard Gauge Railway continues to sink in, a new study has revealed.

The University of Nairobi (UoN) study titled Assessment Report on Socio-Economic Impact of operationalisation of the Standard Gauge Railway on The Port City of Mombasa was commissioned by Mombasa County government “to evaluate the possible impact of SGR on the various socio-economic activities in the city and the possible implications on the county revenues.”

The study says Mombasa’s contribution to GDP was Sh332 billion as at 2016, which declined to Sh206 billion as at 2018.

The study has also projected myriads of direct losses including huge job losses and mass relocation of residents away from Mombasa.

It estimates that more than 8,000 employees had lost their jobs because of redundancy at the time of the study.

This comes even as clearing agents have threatened to completely paralyse operations in Mombasa county saying it is the only sure and effective way of calling the government’s attention.

Clearing Agents

“Already businesses are dying in Mombasa, nothing is working out…we are being told when the local leadership goes to meet the President they are told to completely keep off the SGR issue…the only way to reach the President is to paralyse Mombasa county,” said Bernard Simiyu, who spoke on behalf of clearing agents outside Governor Hassan Joho’s office shortly after the governor convened a meeting for validation of the new report.

According to the technical leader of the research Dr Kennedy Ogollah of the UoN, the survey projected an income loss of Sh33.3 billion per annum for the county.

The study proposed a raft of recommendations which include lobbying for policy alignment to allow market forces to operate freely to create a sustainable environment for other sector stakeholders and SGR.

 To mitigate depletion in county GDP as result of cargo evacuation, the survey recommends that County government lobbies for additional funding either from National Government or to negotiate with Kenya Port Authority for a throughput based cess levy model- to bridge potential decline in revenues.

Coast leaders, led by Joho, are now calling on Kenya Ports Authority (KPA) managing director Daniel Manduku and Kenya Revenue Authority commissioner general James Mburu to rescind the directive that cargo must be transported via SGR and cleared in Nairobi.

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