Fact Checker: Transporters right to blame SGR for job losses

The Inland Container Deport (ICD) in Nairobi which is congested, forcing the management to store some of the containers in a Custom Bonded Wharehouse. [Gideon Maundu, Standard]

Over the past three months, the Government has tried to effect a policy forcing all cargo transporters to ferry their goods via the standard gauge railway (SGR) to the inland container depot in Nairobi.

Earlier this month, the Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA) informed all importers that all goods imported into the country will be ferried via the SGR. “All imported cargo for delivery to Nairobi and the hinterland shall be conveyed by standard gauge railway (SGR) and cleared at the Inland Container Depot – Nairobi,” said the notice in part.

Cargo transporters and respective lobby groups, including the Kenya Association of Manufacturers (KAM) have come out to oppose the directive, saying it would push out them out of business and thousands of jobs will be lost directly and indirectly.

Kenya Transporters Association Chief Executive Mercy Ireri says thousands of jobs stand to be lost directly, including drivers, mechanics and support staff and indirectly along the country’s trucking routes.

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“If the SGR carries 800 containers each day this translates to 800 drivers and their dependents left without a livelihood each day,” explains Ms Ireri.

The transporters say that up to 100,000 jobs stand to be lost if importers are asked to exclusively use the SGR. Data from the Kenya National Bureau of Statistics (KNBS) indicates the number of people employed in the transport and storage sector last year stood at 90,700 both in the public and private sectors. The transport and storage sector also paid out a cumulative Sh132 billion in wages with the private sector accounting for 75 per cent of the payments.

Aside from the direct jobs that stand to be lost, there will also be a knock-on effect to indirect jobs along the value chain. This includes mechanics, food and accommodation workers and enterprises that serve long-distance drivers. In the long run, the contribution to government revenue realised through fuel levy, Value Added Tax (VAT) and income tax will also reduce as companies tighten their belts.

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Transporters are therefore right in claiming mandatory SGR use will lead to thousands of job losses

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KRAKenya Ports AuthorityKenya Association of Manufacturers