Uganda's rail transport sector gets major boost with Shs1 trillion loan

The Ugandan government has secured a whopping $300 million loan (over 1.102 trillion) from the African Development Bank (ADB) to revamp the country's rail transport sector. 
This significant investment is part of the five-year East African Railway Rehabilitation Support Project, which kicked off last year.

According to Eng. Brian Sempebwa, Principal Civil Engineer at the Uganda Railways Corporation, the funds will be used to procure essential equipment, including 100 wagons and 10 locomotives.

"The government of Uganda has secured funding from the African Development Bank that will address some of the gaps and challenges," he stated.

The Corporation will also undertake a re-manufacturing of about 5 locomotives to address some of the operational key challenges.

"The loan facility aims to reduce transport costs on the Northern Corridor and improve trade competitiveness in Uganda and the East African region," Eng Sempebwa.

This project aligns with the African Union's Agenda 2063 and the African Development Bank's High 5 operational priorities.

However, concerns surrounding the efficiency of railway transport in the Northern corridor were raised during a stakeholder dialogue meeting at the Office of the Prime Minister in Kampala. Minister of State for Economic Monitoring, Beatrice Akello, emphasised the need for government ministries, departments, and agencies to work together, rather than in silos, to improve service delivery.

"The biggest challenge to service delivery is a system where government Ministries, Departments and Agencies (MDAs) work in silos. They have not yet embraced the whole of government approach to service delivery, that’s why we have some projects which are uncompleted and we have also some projects which are white elephants," Akello noted.

Additionally, discussions addressed tax exemptions, with oil marketing companies accusing the Uganda Revenue Authority (URA) of selective exemptions. URA clarified that exemptions are sector-based, as stipulated by law.

Ms Justine Namusabi, the senior technical officer in charge of customs at URA said, “The exemptions are sector-based because now the biggest exemption we are having is mainly for oil and gas and all aid-funded projects are exempted.” 

A comprehensive study is underway to assess the costs and benefits of exemptions granted to the economy, with results expected by the end of the financial year, Mr Davis Vuningoma, an economist with the Ministry of Finance and Economic Development (MoFPED) revealed.