9 January 2012

East Africa: Lack of Regulation in Kampala Threatens EAC Business

Our Kampala-bound bus had just pulled out at the Kigali bus terminal in Nyabugogo at 6.00pm when a passenger seated at the back started making frantic telephone calls to a friend who had failed to be in time for departure.

Soon, the passenger was desperately pleading with the bus conductor to ask the deriver to stop and park by the roadside and wait for his colleague on a chase on a motor bike.

It was the response of the Ugandan bus conductor, and not the insistent pleas from the passenger that intrigued me. He said in Luganda: "Be patient, we are looking for proper parking space. This is Rwanda--you think this is Uganda!" That was December 22, 2011.

Even though this statement kept ringing in my mind all through the night bus ride to Kampala, the full extent of its meaning only confronted me on January3, 2012.

That day, I walked into Gaa Gaa bus booking office in Kampala to purchase a ticket to Kigali only to find that the fare had gone up to Shs50, 000 (Frw12,500) from Shs30,000 I paid on December 2, 2011.

What was even more interesting was the fact that even the fare from Kampala to Bujumbura (aboard separate Burundi bound buses) is Shs50, 000.

All that would not be a problem--perhaps there are some hidden costs that have gone up in Uganda that could have forced bus operators to hike fares.

But even more intriguing is that fares from Kigali to Kampala remain unchanged at Frw7, 000 ( about Shs28,000) for private operators such as Gaa Gaa, Jaguar etc and Frw6, 000 (about Shs24,000) for the government-owned Onatracom. It is at this point that the full extent of the meaning of the bus conductor's remarks started to make a lot of sense to me.

Our transporters who ply across the Uganda Rwanda border are aware that they can never do as they wish as long as they are in Rwanda territory. In Uganda, they can stop anywhere to load or offload, but in Rwanda they cannot. While on Ugandan roads two bus drivers from opposite direction can stop in the middle of the road a hold a conversation for as long as they wish while other road users wait.

Over time, I have even noticed different speed limits. Often, even the bus company known for over speeding will virtually crawl when in Rwanda even though there is no change of finding a traffic policeman by the roadside. The same bus will almost fly over the potholes and even speed control humps in Uganda well aware of the numerous police check points and impromptu traffic police roadblocks.

It is the same thinking that while in Uganda you can do as you wish that is behind the more than 70 per cent increase in transport fares from Kampala to Kigali while Kigali-Kampala fares remain constant.

This apparent lack of regulation in Kampala will have negative impact on business in the East African Community in general. In Kampala, you can never know how much you are going to pay for a taxi/bus ride back home until you have spoken with with the operator. Transport fares change according to time of the day and the number of people waiting to board.

With the entire transport sector firmly in the unregulated hands of people who have limited knowledge of the damaging effect of their decisions on the whole economy, the consequences have been dire.

One does not have to be Harvard-trained economists to know that high transport costs have a knock-on effect on all commodity prices and hence inflationary pressure.

It is little wonder therefore that Ugandans have suffered the most from high commodity prices in the whole of the East African region. This kind of situation is not good for economic integration and the growth of business.

There must be some basic minimum uniformity in the way things are done in all member-states of the East African Community to ensure predictability.

We must all move in the same direction in all aspects--whether in business or politics. It does not make sense for some member-countries to be serious on the fight against corruption while other paid little attention; for some to build good roads while other don't. This can only hinder free movement of goods and services--the cardinal goal of our planned integration.

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