East African railway plan faces familiar impediments

Subject

East African rail infrastructure plans.

Significance

Tanzania, Burundi and the Democratic Republic of the Congo (DRC) in December agreed to build a 6.5-billion-dollar standard-gauge railway (SGR) line connecting the three countries through Tanzania’s ‘Central Corridor’. The agreement aims to expand the scope of a massive planned rail network spanning much of East Africa. However, this project, already over a decade in the making, has faced repeated setbacks, especially in Kenya’s ‘Northern Corridor’.

Impacts

• As infrastructure spending slows amid tightening finance conditions, East Africa will struggle to sustain its current fast growth.
• Although Tanzania’s debt is currently manageable, it is growing rapidly; new SGR borrowing would put further pressure on the debt ceiling.
• Construction of a major new Mombasa-Nairobi highway will further reduce incentives to use Kenya’s railways for freight.