China pledges to expand Kenya's SGR to Malaba

A new pledge by China to advance "major signature projects" under its Belt and Road Initiative (BRI) has reignited Kenya’s hopes for the long-anticipated extension of Mombasa Nairobi Standard Gauge Railway (SGR) to the Malaba Kenya border.

Currently, the Sh327 billion Chinese-funded and built railway ends in Naivasha, a situation that has frustrated traders who argue that its last mile gap hampers smooth cargo movement to inland regions.

While presenting China’s annual economic blueprint, Chinese Premier Li Qiang highlighted Beijing’s dedication to "high-quality Belt and Road cooperation," directly addressing Kenya's goal of extending the SGR beyond Nairobi.

Premier Li stated, “We will strive for solid progress in pursuing high-quality Belt and Road cooperation. We will advance both major signature projects and ‘small but beautiful’ public well-being projects and produce exemplary cooperative project deliverables.”

He issued the assurances while delivering the Chinese annual economic scorecard for 2024 and the road map for 2025 at a high-level meeting attended by Chinese President Xi Jinping and other top State officials.

China’s annual economic blueprint emphasized Beijing’s dedication to "high-quality Belt and Road cooperation," directly addressing Kenya's longstanding ambition to extend the SGR beyond Nairobi.

President Xi's landmark Belt and Road Initiative has seen Kenya emerge as a key beneficiary in East Africa.

But the SGR’s termination in Suswa, Mai Mahiu, near Naivasha, has been a point of contention for traders, who argue its inefficiency due to a lack of last mile connectivity, which hampers seamless cargo movement to the hinterland.

Kenya, which has been keen to enhance regional trade and connectivity, aims to extend the SGR from Naivasha to Malaba, at the Ugandan border, and ultimately to Kampala, which is Uganda’s capital.

However, recent high-level discussions between Nairobi and Beijing failed to yield an immediate agreement.

Even then, the President Ruto Kenya Kwanza administration has reiterated its commitment to ongoing engagement with Beijing to secure support for this expansion.

The Chinese assurances come at a critical juncture, as Kenya, grappling with financial constraints and diminishing Western aid, increasingly looks to China for support.

Analysts and close China-Africa relations watchers suggest that Beijing’s fresh commitment to support key infrastructure projects around the world provides a strong case for Kenya's persistent efforts to secure Chinese funding for the project.

“As the government work report said, China is committed to deepening reform and opening up comprehensively, which will create a lot of market opportunities for countries including Kenya,” said Shen Shiwei, CGTN Digital reporter and a non-resident research fellow of the Institute of African Studies at Zhejiang Normal University in an interview.

“Regarding high-quality Belt and Road cooperation emphasised in the government report, it reflects China and Kenya shall further synergize the BRI cooperation with Kenya Vision 2030, including build an East African connectivity hub and industrial belt, and strengthen cooperation in areas as digital economy, new energy, economy, trade, poverty reduction and agriculture development.”

The SGR extension is viewed by Kenya as a vital link to landlocked countries in the region, facilitating seamless cargo movement from the Mombasa port.

Currently, the SGR terminates in Mai Mahiu, a fact that has drawn sharp criticism from traders who argue it hinders efficient transportation.

The end of the Nairobi-Naivasha line in the isolated Suswa region has long been lampooned as a "railroad to nowhere" for missing the crucial last-mile link.

Kenya is determined to rectify this, viewing the SGR extension as a catalyst for increased productivity and a vital link to regional markets.  

Officials reckon that extending the railway to Malaba will help traders move cargo seamlessly by rail from Mombasa port to landlocked countries and also make the Mombasa port attractive.

The Mombasa port serves Uganda, Rwanda, the Democratic Republic of Congo (DRC), South Sudan, and Burundi, as well as northern Tanzania.  

Despite the availability of the Nairobi-Naivasha SGR, a recent study by the Kenya Association of Manufacturers reveals that Kenyan manufacturers still prefer trucking due to cost, flexibility, and limitations of the SGR.

“Most importers or manufacturers who prefer to use SGR services... usually face the challenge of last mile connectivity," the study stated.

The Ruto government, however says it remains determined to secure a deal with China to construct the SGR to Malaba, recognizing that resolving the railway's bottlenecks will "reduce the cost of transport and logistics in favour of industry."

Kenya has been actively seeking a deal with China to complete the Standard Gauge Railway to Malaba since the Ruto government took over power in September 2022.

However, high-level discussions between President William Ruto and President Xi Jinping have not yielded an agreement or extension commitment.

Extending the railway to Malaba is seen as crucial for enabling traders to transport cargo seamlessly by rail from the Mombasa port to landlocked countries, including Uganda, Rwanda, the Democratic Republic of Congo (DRC), South Sudan, and Burundi.

In the backdrop of these developments, Uganda has maintained a wait-and-see approach regarding Kenya's SGR line, which was constructed at a cost of approximately Sh327 billion.

Recently, Kenya rehabilitated the Meter Gauge Railway (MGR) line from Naivasha to the Malaba border to enhance transport along the corridor. The government has also been working to boost the competitiveness of the Mombasa port.

The Chinese-built railway ends in Naivasha, where the government plans to establish an industrial park to promote rail freight, though this has yet to materialize.

According to the Kenya Association of Manufacturers, “Trucks can offer last-mile connectivity to importers by transporting goods from the Container Depots to their premises.” Their study emphasizes the need for enhanced railway infrastructure to improve last-mile connectivity and reduce transportation costs.

Manufacturers believe that addressing the bottlenecks faced by the railway will lower transportation and logistics costs, benefiting the industry and consumers alike. The Ruto administration said earlier it remains determined to secure a deal with China for the construction of the SGR extension to Malaba.