News & Information



12
October
2020

The region remains a huge and expanding market for trade


By: TTCA
Summary/Brief
The Northern and Central Corridors Member States’ population has been increasing annually with the year 2019 having a combined total population of approximately 277 million; an increase population growth rate of 3% when compared to the 2018 figure. The large population presents a massive trade and marketing opportunities that is projected to expand even further in the future.


The Northern and Central Corridors Member States’ population has been increasing annually with the year 2019 having a combined total population of approximately 277 million; an increase population growth rate of 3% when compared to the 2018 figure. The large population presents a massive trade and marketing opportunities that is projected to expand even further in the future.

Despite the COVID-19 pandemic that has had a profound impact on the global economy, and the Northern and Central Corridors Member States, the region remained resilient. COVID-19 crisis has revealed just how crucial trade facilitation is in times of crisis; acting as a magnifying glass to show the importance of trade.

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Northern and Central Corridors region hardly hit by disrupted supply of goods during COVID-19 pandemic period

Paradoxically, inspite of the prevailing pessimism surrounding the prospects for global trade, Kenya actually experienced a significant improvement in exports in the first quarter of the year, together with a moderation of imports, leading to a marked decline in the trade deficit. While the initial shock to Kenyan trade caused by the COVID-19 crisis initially looked dramatic in terms of the declines registered, domestic exports have actually performed extraordinarily well under the circumstances, with incremental growth since 2019.

“Not all supply chains were disrupted by COVID-19 pandemic, with some Kenyan exports like tea, horticulture and fruits surpassing levels of previous years. Rather, imports have been the principal victim of the COVID-19 Pandemic period, declining between March and May 2020”, said Omae Nyarandi, the Executive Secretary at the Northern Corridor Secretariat.

Capital goods imports have declined markedly; a trend which, if sustained, could have implications for long-term economic growth.

“The fall in imports of consumer goods could also set the scene for a revitalization of national and regional industry, as local producers step up to fill the void created by the sharp lull in imports”, added Omae Nyarandi.

According to the joint Annual Report of the Northern and Central Corridors’ Transport Observatories released in September 2020, Intra-regional trade within the region represents about 20% of its total trade (as opposed to 70% in Europe) due to poor quality of infrastructure, complex administrative procedures, low competition in the carrier industry and a lack of interconnectivity between the various modes of transport.

Northern and Central Corridors Member States remain net importers. Total combined imports stood at 40.5 million metric tonnes in 2019, having grown by 18% from 34 million metric tonnes in 2016. Imports through the port of Mombasa are two-fold when compared to Dar es Salaam port.

The region continues to import substantially more goods than it exports signifying unfavourable trade balance. Both ports registered the highest import cargo serving similar countries. The growth is driven by the corresponding growth of economies in the region.

The top import commodities through the port of Mombasa include petroleum oil & lubricants, clinker, wheat, iron & steel, palm/vegetable oil, fertilizers, coal, rice, plastic and sugar. Major import partners include Asia and the European Union.

Kenya and Tanzania accounted for the majority of imports slightly over 60% of total imports discharged through the port of Mombasa and Dar es Salaam respectively. The proportion of transit imports accounted for 30%.

Regarding the overall export through the Mombasa and Dar es Salaam ports from 2016 to 2019, the port of Mombasa witnessed an increasing trend from 3.7 million metric tons in 2016 to 4.1 million metric tons in 2018 and further to 4.3 million metric tons in 2019. The port of Dar es Salaam registered an increasing trend from 2.0 million metric tons in 2016 to 2.5 million metric tons in 2018 and a decreasing trend to 2.4 million metric tons in 2019.

Total exports through the port of Mombasa are almost two-fold when compared to exports through Dar es Salaam port. DRC uses Tanzania port for most of her exports whereas Uganda uses the port of Mombasa for most of her exports. The choice of options could be attributed to the distance to the nearest port.

The Central and Northern Corridors region surface area of 4.78 million Km2 calls for complex trade and logistic interventions to facilitate smooth trade.

The entire Northern Corridor road network covers approximately 12,707 Km in length distributed as follows; 1,323.6 Km in Kenya, 2,072 km in Uganda, 1,039.4 km in Rwanda, 567 km in Burundi, 4,162 km in DRC and 3,543 km in South Sudan. The main arterial cargo highway runs from the port city of Mombasa through Nairobi and Kampala to Kisangani in eastern DRC. Tributaries branch off to Mwanza, Juba, Bujumbura, and Kigali.

The currently installed pipeline system consists of 1,342Km of pipeline with the capacity to handle about 6.9 billion litres of petroleum products annually with 8 depots on the network.

The Central Corridor Road network stretches from the port of Dar es Salaam through the United Republic of Tanzania, where it splits to enter Burundi at Kobero/Kabanga border posts, Rwanda at Rusumo/Rusumo border posts and Uganda at Mutukula/Mutukula border posts. The Corridor continues to Goma and Bukavu through Rwanda.

The Central Corridor railway line links Uganda through the inland port of Mwanza on Lake Victoria and also links Burundi and Eastern DRC through the inland port of Kigoma on Lake Tanganyika.

The Central and Northern Corridors are linked through various road arteries that run through member Countries. Kenya links to Tanzania through the Namanga border via the Namanga-Athi-River route, Taveta/Holili border via the Voi-Taveta Route, Isebania/Sirari border via the Isebania-Ahero route and Lungalunga/ Horohoro border via the Likoni-Lunga Luga route.





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