21 February 2013

Uganda: Traders Spend More On Transport

Most goods are brought into the country via road which is very expensive as compared to railway transport, a World Bank report has revealed.

The report points out that limited rail transportation capacities have led to a modal shift towards road transport, which costs far more. Container imports to Kampala are on average $2,500 (sh6.6m) per 20ft container for road transport, compared to $1,920 (sh5.1m) for rail according to the World Bank.

Patrick Bitature, the chairman Uganda Investment Authority (UIA) notes that container transportation costs to Kampala can hit highs of $5,500 (sh14.6m) from the Tanzanian Port of Dar es Salaam and $4,000 (sh10.6m) from the Kenyan port of Mombasa.

"Uganda's central position in both northern and central corridors needs to be developed more zealously, "The Ugandan trader faces freight costs that are 30% higher than their counterparts in Southern Africa and 60-70% higher than their counterparts in the US and Europe," reads the report.

Bitature points out that a properly functioning railway system will cut the number of trucks on Ugandan roads by 300 every day. Over 50% of the trucks on the Central corridor are Tanzanian registered, while over 90% of those on the northern corridor are Kenyan registered putting Ugandan truckers at a disadvantage through regional infrastructure fees.

While the East African Community (EAC) standardised transit fees at $200 (sh0.5m) per annum in the year 2011, Tanzania still imposes a $20 (sh53,000) entry fee per truck, a $5 (sh13,250) fuel tax and a $10 (sh26,500) road user fee per 100km.

The Kenyan route is characterised by high berth costs, yard congestion, slow clearance and informal charges, especially at several weigh bridges.

Mukitale noted that the Kampala- Kasese, Kampala-Pakwach railway lines should be refurbished to bolster intra-Uganda trade, evacuating agricultural produce from source to processing areas and reducing container transportation time.

Uganda's railway system is being run a South African concession, the Rift Valley Railways (RVR) and has secured a cumulative $287m (sh760b) to rehabilitate the Ugandan side of the Mombasa- Kampala route.

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