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Tuesday, March 14, 2017

#Museveni is gonna stub #Uhuru in the back in another trade deal - #Uganda, #Tanzania



If all undertakings made by the Tanzanian authorities are fulfilled, Ugandan traders may sooner than later see reason to exploit the second door to import and export their goods through the Dar es Salaam (Central-Corridor) again.  The Mombasa - Kampala route has always been preferred as the first door.

Dar es Salaam Port is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo.
The port serves the landlocked countries of Malawi, Zambia, DR Congo, Burundi, Rwanda and Uganda.

Over a decade ago the Dar es Salaam - Kampala, popularly known as the Central Corridor, used to be the other option for Ugandan traders to do international trade. Ugandan traders are now swarming at Mombasa Port as a seaport of choice. On average Uganda’s goods transiting through the Northern Corridor (Mombasa - Kampala) is about 5.9 million tonnes per day.  While meeting a delegation of Ugandan traders at the sidelines of President Yoweri Museveni’s visit to East Africa’s second largest economy at the end of February, Mr Deusdedit Kakoko, the Tanzania Ports Authority (TPA) director general, said: “Previously, at least 30 per cent of the Ugandan cargo used to be freight through Dar es Salaam Port. It has dropped to a per cent that is lower than 2 per cent.”

Reason for decline
Industry observers say the Central Corridor has been plagued with a number of complaints ranging from delayed service, inefficiency, loss of cargo and insecurity.
Because of this, there was a decline in cargo flow through the Central Corridor and 98 per cent Ugandan destined cargo is now being handled through the Northern Corridor.
Ugandan businesspeople say the Central Corridor which is 1,680 kilometres long is very expensive and it makes no business sense to use.
At present Uganda uses the Northern Corridor, which is just about 1,150 kilometres, that runs from the Kenyan port of Mombasa to the Great Lakes which costs about $3,200 (Shs11 million) to transport a single container.

In an interview with Prosper Magazine, the president, Uganda Clearing and Forwarding Association (UCFA), Mr Kassim Omar, was doubtful about the promises made by Tanzania unless they are put into action, especially that of establishing the Standard Gauge Railway linking Uganda through Mwanza Port.
“Tanzania needs to come out of its hole and start meaning business. The Central Corridor will not work or succeed if authorities keep talking without fulfilling the promises. They should fix the railway,” Mr Omar said.

Tanzania’s effort
As part of a campaign to root out corruption and inefficiency in Tanzania, President John Magufuli introduced a series of austerity measures since his inauguration in 2015.
In 2015, the World Bank said inefficiencies cost Tanzania and her neighbours served by the port up to $2.6 billion (Shs9.3 trillion) a year. Because of this, the port of Dar es Salaam authorities received a share of President Magufuli’s wrath when its leadership was sent packing.
President Magufuli has tasked TPA to see the Central Corridor effectively operate by removing barriers and increase cargo volumes.

The contestation on the preferred route by traders in Uganda has now forced Tanzanian authorities to rethink strategies to win back their priced business partner Uganda.
Mr Kakoko shares: “Communication is a key factor in business of movement of goods and people faster along this route. We will be reducing costs to enable the traders quickly do other functions in time. If the road is good and the railway system is operating well Ugandan traders will be moving faster.”

He promised that with all the developments in place by July, cargo movement along this route will be cheaper in terms of time spent in transit.
“We hope movement of cargo along this route drops to only four days from Dar es Salaam to Mutukula and a day and half to Kampala from Mutukula. This is less compared to the 7-8 days the Northern Corridor takes. This makes it cheaper,” Mr Kakoko added.
He said: “A man cannot stay in a house that has one door. It must have a back door. We are ready to provide that door and maintain it. So this should be a starting point for us to do business.”
The Tanzanian authorities further said that they have more than 25,000 fleet of truck, the biggest in the region, and they are ready to ferry cargo.
Ms Angelina Ngalula, the chairperson of Tanzania Truck Owners Association, said: “Previously, we used to escort our trucks but this has since been stopped because there is security along the road.”

However, he was concerned about the exports from Uganda which are very low and this, to them, makes no business sense to ferry cargo from Dar es Salaam and return empty trucks.
“If there is no return cargo it makes no sense to ply that route. However, we are ready to work with the Ugandans to come up with a package to attract the use of the Central Corridor,” Ms Ngalula noted.

http://nangalama.blogspot.com/2017/03/museveni-is-gonna-stub-uhuru-in-back-in.html

On this route, Ugandan traders largely transit coffee, motor vehicles, wheat, building materials and fuel, among other products.
Reacting to Mr Ngalula’s observations, Kampala City Traders Association publicity secretary David Lukyamuzi Wangi said: “What we need from you is service which is cheaper, faster, and efficient. Then our job will be made easy in Kampala.”
He added: “Once that is done, we are going to preach to the business community in Kampala about your promise and what you have fulfilled and to start using this route.”

Empty cargo shed
Tanzania Railways Limited’s managing director Masanja Kadogosa said they are prepared to serve.
He, however, said that they had a challenge in the Port Bell - Kampala line.
He explained that Rift Valley Railways (RVR) has continued to frustrate their operations to deliver cargo when it failed to provide a ferry from Mwanza to Port Bell to transport cargo.
Because of this, the Ugandan cargo shed at the port of Dar es Salaam which was once piled with coffee is the only one empty.
Cargo between Kampala and Dar Port has dropped to uncomfortable levels partly blamed on the reluctance by RVR and Uganda Railways Corporation (URC) over the Dar Port.
Mr Kadogosa said: “We are soon sitting with the URC/RVR this month to see how we shall work together to rehabilitate the railway line from Port Bell to Kampala in order to ease movement of goods.”

Developments
Work in progress
Tanzania is developing a place called Udungu Dry Port, hoping to handle dry cargo.

Also the Dry Port at Isaka which is about 970 kilometres from Dar es Salaam Port, is expected to start operating at the end of March. This is where traders will pick their cargo thereby cutting back on the distance to Dar Port.

Along the Central Corridor, a 1680 kilometre road has been tarmacked, with only a small stretch of about 12 kilometres between Nyakanazi and Rusawunga yet to be done.
The route which used to have 56 weigh bridges now has only three at Bigwano, Manyonyi and Nyakanazi.
If the Standard Gauge Railway is completed transiting cargo from Dar Port through Mwanza - Port Bell will take only 16 hours.

Ugandan traders speak

Mr Paul Munyoro, the Roofings Limited import manager, said that they abandoned the Central Corridor because of its challenges more than 10 years ago, and have since depended on the Northern Corridor for its advantages such as the shorter distance of just 560 kilometres. This means one has to spend less.
“We have to be certain about the security on the Central Corridor. The weigh bridges have been removed from 56 to three: Bigwano, Manyonyi and Nyakanazi. This is a welcome development. We also need to look at the upgrading and enlargement of the port at Mutukula to manage the volumes when they start,” he shared.
He added: “We have not been engaged as businesspeople and TPA has no office in Kampala. So their presence is not felt here. They need to work on this by ringing their bell continuously if the Ugandan businesspeople are to consider this route.”

More voices

In an interview with Prosper Magazine about Tanzania’s efforts to actively revive the Central Corridor, Mr Sam Sekasi, the operations manager Damco Clearing and Logistics, said it is important for Uganda to have an alternative route.
“The monopoly with the Northern Corridor is that they tend to determine the rates and there is always no option but to stick to what they have set. With competition it means better rates,” Mr Sekasi said, adding that seeing Tanzania improving the route and the rates, and saying that they can negotiate when there are delays, is something the Ugandan government should ensure that the route becomes a reality.
“For Tanzania to say that they will make an extra effort to speak to individual clients and giving them concessions should come in handy.
If the Dar es Salaam rates are subsidised then it is a viable alternative that we should exploit,” Mr Sekasi shared.

DAILY MONITOR
Kampala-Dar es Salaam: Another route Uganda should consider?

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