This archive report was first published on 14 July 2019.
On July 1, 2019, President Uhuru Kenyatta made a significant announcement that has sparked debate in Kenya's business and economic circles. He promised visiting South Sudan counterpart Salva Kiir 10 acres of land for the construction of a dry port, just three months after making a similar offer to Uganda's Yoweri Museveni.
A dry port is a customs area connected directly to a seaport by rail and road, and the Ugandan and South Sudan dry ports will rely mainly on the standard gauge railway for connectivity.
While some analysts believe the deal could be beneficial for Kenya, others are skeptical, citing concerns that the country may lose cargo handling business to its landlocked neighbors.
According to Mr. Tony Watima, an economist, 'If Kenya is only providing land while Uganda and South Sudan invest in the operations of the dry ports, then this is a deal heavily skewed against the country.' He added that the best deal for Kenya would be to keep the cargo handling business while allowing Ugandans and South Sudanese to handle enforcement and compliance, clearing, and customs activities.
Kenya is under pressure to safeguard its transit business, which has seen a decline in recent years due to the increasing popularity of the Dar es Salaam port. Uganda and South Sudan account for 95 per cent of Mombasa port's transit business, with the Democratic Republic of Congo emerging as an important destination for cargo shipped via the northern corridor.
Shippers Council of Eastern Africa chief executive Gilbert Langat believes that offering land to the two countries is a sure way of getting them to commit resources to the Kenyan transit route. He added that a dry port will eliminate the high cost linked to delays at the Mombasa port and create a sense of ownership among the landlocked states.
