Kenya urged to develop the SGR belt to create jobs for economic growth

Standard Gauge Railways (SGR) Nairobi Terminus . December 6th,2024. [FILE/Standard] Think tanks and diplomats have argued that the country is not utilising the Standard Gauge Railway (SGR) as it should and must begin transforming it into a thriving economic resource to create jobs and boost livelihoods. Discussions held in Nairobi and attended by China's ambassador to Kenya, Guo Haiyan and Xue Bing, the Special Envoy for Horn of Africa Affairs in China's Foreign Affairs Ministry, called for more investment and better planning for the SGR to achieve its full potential in intra-regional trade and transportation. Convened by the Africa Policy Institute, the diplomats and think tanks from local universities proposed an urgent coordinated multi-dimensional effort to ensure that opportunities at hubs along the line from Mombasa to Malaba are properly exploited. Ambassador Bing told the meeting that the continued safe and sustainable operation of the Mombasa-Nairobi SGR since its inauguration in May 2017 is now a fundamental factor in developing Kenya's economy. It has remarkably transported over 13 million passengers and hauled 40 million tons of cargo, boosting industrial output along the corridor by 15 per cent and helping to grow the economies of neighbouring countries. The envoy assured Kenyans that the cooperation on developing railway infrastructure further will be achieved across the region through commitments already made and signed by China during President William Ruto's visit to Beijing in April. He also called for the upgrading of critical technologies, enhancing personnel training, implementing systematic infrastructure maintenance, strengthening railway safety legislation and expanding public awareness campaigns. These strategic initiatives will ensure the SGR is not only secure but also sustainable to operate, as it also provides room for the development of the economic belt. And because the SGR corridor already possesses robust assets, proper strategic planning will fully develop product processing in the agricultural sector to increase the value of products like tea, coffee, floriculture and cotton, among others. Trade in the economic belt will also be boosted through scaling up mining of minerals like Titanium and rare earths that are in high demand across the world. Good hotels, shopping malls and other amenities in towns near tourism reserves in Tsavo and Amboseli should also now be a priority. "Trade will be scaled up by tourist-dedicated trains as well as express lines for fresh agricultural products to improve local economies in the counties. Product processing and quality of produce will improve to spur industrial chains across the region," said Bing. Amb Guo Haiyan argued that the SGR belt could use the Yangtse River Economic Belt models as a case study to increase development and investment along the line. Development along the river has, over the years, seen the rise of cities like Shanghai, industries and universities, apart from attracting millions of tourists annually. It stretches from Shanghai, a major international city and spreads across China's eastern, central and western regions, encompassing 11 provinces and municipalities and covering approximately 31 per cent of the country's land area, representing over 40 per cent of China's population and economic output. The outline of the Yangtze River economic belt development plan was only released in 2016, and yet it has become the backbone of the economy, while also experiencing a lot of financial growth and notable advancements. "In the east around Shanghai, the Yangtze River delta integration is happening, in the central middle ranges urban modernisation is rising and in the west the twin cities economic zone is thriving," said Amb Haiyan. Since 2014, the GDP of the belt has grown by an average of 7.7 per cent. It has achieved continuous improvement in economic development. Significant achievements have also been made in ecological environmental protection and restoration, as industrial upgrading further boosts trade and people movement along the Yangtze. Before the Forum on China-Africa Cooperation, held in Beijing early this year, that was also attended by President Ruto, Prof Peter Kagwanja of the Africa Policy Institute argued that the SGR Belt has become the new pivot of Kenya's development. Think tanks at this week's meeting also emphasised that the SGR economic belt has a significant economic potential if properly supported by policies that can inject a strong impetus, because railways are a vital avenue of multifaceted growth. The government was also urged to promote more investment along the western tourism circuit, from Lake Naivasha, Lake Nakuru and surrounding areas, Ruma reserve in Homa Bay, plus Kakamega and Mt Elgon forests, among other potential attractions like tea farming and processing The heavy investment made by the people of Kenya in the SGR project should catalyse the need for different projects to avoid duplications and spread opportunities from the port of Mombasa to Malava, instead of only relying on transporting people and goods. To realise its multiplier effect, the SGR cannot rely only on its operating income but should instead maximise on harnessing its potential, which can have a heavy impact on developing commercial centres and rural areas along the line. County governments are also encouraged to promote industrial development by fully leveraging their unique strengths in their regions through avoiding homogeneous competition and duplicate construction to promote the free flow of goods. The East Africa region also enjoys a unique strategic position because of the Indian Ocean trade routes. They provide another big opportunity to reinforce regional co-operation and trade for Kenyan merchants and entrepreneurs. Prof Patrick Maluki, the Chairman Department of Diplomacy and International Studies at the University of Nairobi, also argued that SGR will add its much-needed value if it opens up the long-ignored rural areas. "Plugging the elite from villages and taking them to cities was our main undoing because the village was ignored. It was a major drawback to development and the main factor was the lack of transport because people could not travel easily to carry out business or move goods," says Maluki. Dr Kevit Desai, a former Principal Secretary in the Ministry of East African Community and Regional Development, recounted that in 2007 and 2008, when he was the CEO of the Kenya Private Alliance, they conceptualised how the SGR could be fully exploited. In 2009, when the SGR was becoming a reality, they realised that it was an enormous opportunity to cut transport costs at the time, charging three US dollars per kilometre on the old metre gauge line. It was a big opportunity because through SGR, the government wanted to maximise value addition in agriculture. They also realised that a huge opportunity would be created to promote industrial capacity in the railway construction sector. "We created the SGR consortium and brought key players on board from the cement, steel and electric cable industry and began lobbying the government to increase capacity for the consortium," says Desai. They, however, soon realised that they could not satisfy the requirement of the China Road and Bridge Company (CRBC), which was constructing the railway. That forced them to invest in improving standards, and that is when CRBC accepted their products. They also lobbied for local artisans and technicians to be onboarded, but first invested in their training, leading to the opening of 210 technical training colleges in each constituency around the country. Today, local industries have the potential to supply construction materials for an entire continental railway line. And so the story of SGR is important not only for industrial development but also because it plays a big role in improving the skills of young people who are now very competitive in the local and world job market. "They are welding and constructing according to required standards. That is why this story needs to be expanded not only in terms of industrial transformation but also to create inclusivity and self-reliance in the general population," added Desai. Desai, however, argued that to achieve the intended purpose, there is a need for diversification of the SGR in terms of transport and logistics to the last mile. That way, the livelihoods and economies of people along the corridor will improve. He still feels Kenya didn't get the full benefits from the contribution made by the private sector to create magnificent growth from the huge investment. All SGR stakeholders can, however, go back to the vision of 2009. Prof Kagwanja hailed China for uplifting 800 million people from poverty and putting 500 million people into the middle class. The largest group in human history who now consume products from industry, travel, work and study. "The Chinese brought back the concept of modernisation, and their policy makers took it seriously as a model of development and planning. We are now getting projects, programmes and partnerships that are uplifting people out of that partnership," says Kagwanja. Scholars from local universities who were in attendance agreed with Amb Bing that in recent years, certain international actors have continuously weaponised the SGR debt and used it to smear the China-Kenya cooperation. Prof Maluki and Levi Obonyo of Day Star University said scholars and researchers should debunk the false narrative and instead give factual data that will help articulate the true story. "We will welcome think tanks and scholars to give feasible suggestions on advancing the SGR belt to make the China-Kenya partnership better. We could not have achieved what we have done and achieved in the mutual and trusted relationship without this strategic partnership," added Bing.

Kenya urged to develop the SGR belt to create jobs for economic growth

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