Ruto excites Ugandan importers as Museveni roots for regional markets

President Museveni yesterday returned from Kenya with a win for Ugandan importers after Kenya President William Ruto reversed the mandatory transit of cargo using standard gauge railway to and from Mombasa Port.

Uganda has been opposed to mandatory transit of cargo from Mombasa Port to Kenya’s inland ports using the standard gauge railway (SGR) to Kenya’s neighbouring countries in the west.
During his inauguration speech, President Ruto said he would issue instruments yesterday afternoon reverting former President Uhuru Kenyatta’s SGR cargo policy.

“This afternoon, I will issue instruments for clearing of goods and other attendant operation issues to revert to the port of Mombasa as I made a commitment to the Kenyan people. This will restore thousands of jobs in the city of Mombasa,” President Ruto said yesterday.

The policy to transit cargo using the SGR was enforced in 2020. Ugandan transporters and the business community said it was costly because it disrupted the supply line thus affecting their obligations with the shippers at the coast.

Museveni addresses
President Museveni asked the new Kenyan leadership to focus on the integration of the East African Community and building regional market to enable the region to compete with the rest of the world.

“In order for us to catch up with the United States, we need to look at the issue of regional market,” President Museveni said at Kasarani Stadium in Kenya, adding that as they focus on production, they should also ask themselves where they will sell those products.

He said the more people buy from you, the better for the business and the better for job creation.
President Museveni said while listening to analysts on one of the Kenyan media he was excited when one posed a question  where the resources they want the government to distribute would come from.

“Where will these resources come from? So the political class in Africa, I would appeal to you to answer that question. Where does prosperity come from? According to my experience of 60 years, I would advise Africa to know that prosperity comes from wealth creation. You must create wealth. Wealth isn’t the same as natural resources. You may have natural resources, but you don’t get wealth out of them,” he said.

Described as “the father of the region” on account of being the longest-serving president in East African region, President Museveni reminded the people of Africa that prosperity will come from commercial agriculture, manufacturing, services  and ICT sectors. For the East African Community in particular, Mr Museveni said, “We need to work on the issue of regional markets to ensure our people’s prosperity.”

President Ruto’s announcement on transit of cargo from Mombasa Port was welcomed by Ugandan transporters.

Mr William Busuulwa, the chairperson of the Uganda National Transport Alliance, said what President Ruto did is what they have been demanding for.

“It is also in our interest. The SGR was costing us a lot of money. A transporter would hire containers from a shipping company. The shipping company would refund money if the empty containers are returned. But when the cargo reached Mombasa Port, they would transport it on the train to Nairobi or Naivasha inland ports. The transporter often lost contact with their cargo,” Mr Busuulwa said. “Sometimes, the containers would be left in the inland port and they attach demurrage without the knowledge of the owners.”

Mr Busuulwa said after the cargo is offloaded in Uganda, returning the containers to the shipping company also became a problem as they had to be transported again by rail to the coast.

Mukwano Industries is among the Ugandan companies that threatened to sue the Kenyan Port Authority for forcing them to use the SGR.

In a letter dated June 4, 2020, Mr Alykhan Karmali, the company managing director said the policy caused disruption of the supply chain.

“You and your staff are aware of the contractual carriage obligations that exist between the shipper, consignee, and shipping lines. If our point of discharge is Mombasa and on carriage on the consignees’ risk and account, I wonder how you can unilaterally rail our containers to Naivasha without our consent,” Mr Karmali wrote.