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Uganda: The Cost of Kenya Violence
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The Monitor (Kampala)
ANALYSIS
8 January 2008
Posted to the web 7 January 2008
LAST week, Ugandans were jolted to the hard reality that comes with living from hand to mouth.
The street-running battles and smouldering scenes in Kenya brought home to Ugandans the realisation that unlike having chaos in Rwanda, DRC or southern Sudan, any minimum instability in its eastern neighbour brings catastrophic economic tremors.
And as Business Power reporters ELIAS BIRYABAREMA, ISMAIL MUSA LADU & DOROTHY NAKAWEESI found out, Kenya's own losses could be riding way into millions of dollars from violent disruptions across the country; Uganda however almost came to a standstill by the end of last week as the crisis exposed the fragility of the nation's economic foundations.
The immediate eye opener was the scarcity of fuel leading to skyrocketing of fuel pump prices by more than 300 per cent at the peak of the scarcity last week as the government frantically tried to explain away the situation as temporary.
Local airlines operating internal flights were ordered to halt business to save on jet fuel, buses plying across the boarder into Kenya stopped operations, thousands of tonnes of goods destined to Uganda remain trapped in Kenya and transport fairs have since tripled across the country.
Already, the Uganda transporters and the entire business community are reeling, distressed by the price of fuel in Kampala.
Several Uganda importers said they had decided to delay clearing their goods through Mombasa seaport until the violence in Kenya ends. Those whose goods were caught up in transit have sought for safe havens in bonds and stores in Nairobi, according to a Kampala City Traders Association (Kacita) official.
Kacita Spokesman, Issa Ssekitto described the current situation in Nairobi and other cities as bad for the Ugandan exporters and importers.
"I personally had a truck in transit to Uganda. It was loaded with goods so I had to keep it in store for a while until chaos in Kenya ends," said Mr Sekitto.
All Nairobi/Kampala bound busses have been halted causing massive loses to the operators and inconveniencing travellers across the region.
"All buses that are going to Nairobi are here because of safety concern and fuel prices" the Manager of Falcon buses, Hajji Omar Selim said.
Business Power visited several bus stations and found them deserted with operators waiting in idleness for the situation in Kenya to improve.
Akamba, Gateway, Buscar, Falcon and Regional bus offices all looked deserted save for some disgruntled Nairobi bound passengers around the offices.
These busses have a capacity of 47-59 passengers and the fares to Nairobi ranges between Shs25,000 to Shs30,000. Close to 20 buses cross into either sides of the boarder daily.
Leaders react
"I can not tell you that we can open our Kenya route tomorrow or the other day because it all depends on the how quickly the situation gets back to [normal]," said Hajji Selim.
Business leaders have expressed concern about the situation but remain hopeful that Kenyans will amicably resolve the situation for a quick return to normal operations.
"We don't want any disturbances in the region because this is the time we are trying to market the region as both a local and FDI destination," Dr James Mulwana Chairman Private Sector Foundation Uganda said. Adding that; "the business community in Uganda wishes Kenya peace and stability because that is our life. We hope and pray that peace will prevail and we forge a head."
Kenya's turmoil is also a disruption of regional economic harmony given its strategic importance to the region.
According to Kacita spokesperson Issa Ssekitto, 90 per cent of Uganda's imports pass through Mombasa Port and 78 per cent of exports pass through the same route. Kenya earns about $200,000 (about UShs337 million) in taxes from goods destined for Uganda daily.
The Kenyan economy is also the largest in the region and provides several resource linkages to industries cross the region.
But even more frustrating is the extent of the damage that Kenya's post-election violence will wreak on the entire East African Community region's international business image.
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For a region struggling to court more high-tech Western investors, Kenya's sudden collapse into a civil-war like state of affairs will come as a crushing development. It could extinguish any hopes in those investors that had been made to believe that Kenya and much of the East African Community had been set firmly on a path to a mature democracy and a glorious economic future.
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