This archive report was first published on 15 September 2019.
Published on September 15, 2019, a study by the University of Nairobi School of Business has shed light on the devastating impact of Standard Gauge Railway (SGR) policies on Mombasa's economy.
The report, which was a year in the making, found that the county has already lost Sh17.4 billion and 2,987 jobs equivalent to 8.4% of its annual earnings since the implementation of government policies requiring mandatory transfer of most import cargo through the Madaraka SGR freight service to Nairobi in 2017.
According to the study, the SGR freight service has had a net negative effect on Mombasa's economy, with the county's economy shrinking by 16.1% and 8,111 jobs lost if all cargo is evacuated by the SGR from the port.
Mombasa businessman Suleiman Shahbal warned that if the economy of Mombasa sinks, it will go down with the entire Coast region. 'The city is on a sharp downwards spiral, the entire Coast region depends on its economy,' he said.
However, the report also demonstrated that in spite of these negative impacts, Mombasa's economy can still thrive in perfect co-existence with SGR if the state implements remedial policies including fast tracking of the Dongo Kundu Special Economic Zone and other potential industrial parks to create new employment opportunities for Mombasa.
The report prepared by Dr Kennedy Ogollah, Dr Kingsford Rucha, Dr Joshua Aroni and Gichiri Ndua further showed there are adequate opportunities and cargo to support the SGR and Kenya Railways Services to sustain itself and repay the loans owed to China and also enable Mombasa's threatened logistics and transport sectors to thrive.
It recommended that Mombasa County be made part of the port community 'as a key interested party' and the county government to lobby the national government for 'policy/legislative alignment that will allow market forces to operate freely to create a sustainable environment for other sector stakeholders.'
According to the report, the transport sector contributes 23% of Mombasa's GDP followed by manufacturing, real estate and construction at 16, 12 and 10% respectively. 'In total, the four sectors contribute 60% of the GDP at county level,' says the report.
It also projected that the crime and social ills could treble with Mombasa's economic collapse.
