State, TMEA close Sh1.3b deal for regional projects

Lewis Njoka @LewisNjoka

The government and Trademark East Africa (TMEA) yesterday signed financing agreements worth Sh1.3 billion to fund the construction of infrastructure projects in Mombasa, Busia and Malaba.

National Treasury said the money will pay for construction of Busia Jumuiya market, the road linking Busia One-Stop Border Post (OSBP) to Busia Town and construction of Magongo Road in Mombasa.

Part of the funds will also be used to complete the pending works at Malaba OSBP.

The four financing agreements were signed by Treasury Cabinet Secretary, Ukur Yatani and TMEA chief executive, Frank Matsaert, on behalf of their respective institutions in Nairobi yesterday.

Busia Jumuiya market is expected to cost Sh2 billion and will be built in three phases namely retail section, a wholesale section and a business hub.

Phase 1 (retail section) will cost Sh559.3 million with TMEA contributing Sh485.3 million with funding from from the Foreign, Commonwealth and Development Office (FCDO) and Danida,  and the government contributing an additional Sh74.3 million.

The 10,000 capacity Busia Jumuiya Market was developed in response to the Presidential directive of 2019 to establish Cross Border markets in Busia, Isebania, and Taita Taveta.

In addition,TMEA, through funding from FCDO, has also committed $3.7 million (Sh372 million) to finance the dualling of the road approaching the Busia One Stop Border Post from Busia town.

The road is expected to reduce the frequent traffic snarl-ups. So far, Magongo road has received Sh1.1 billion from TMEA and Sh3.7 billion from the government while the completion of the Malaba OSBP has received Sh403 million.

Speaking during the signing ceremony, Yatani, called for speedy implementation of the projects, saying they would spur trade in the region.

“The four grant agreements (approximately Sh1.31 billion) we have signed today will facilitate trade and unlock the economic growth of Kenya, Uganda, Rwanda, Burundi and to a wider extent Democratic Republic of Congo given that this investment is in critical infrastructure,” he said. 

International trade

Yatani said the projects will create efficient borders that will facilitate international trade, investment, and regional economic growth.

Matsaert reiterated TMEA’s commitment to supporting trade in the region, saying his organisation would complement the infrastructure work by supporting small businesses acquire knowledge, skills, and access safe trading.

“Since 2010, we have invested over $107 million (Sh11.6 billion) at the port of Mombasa and $16.5 million at four One Stop Border Posts of Busia, Malaba, Taita/Taveta and Moyale.

At the same time we are keen that citizens are able to trade to increase their incomes, that livelihoods are protected and that Kenyan SME’s access international markets,” he said.

His sentiments were echoed by East African Community Principal Secretary, Kevit Desai lauded the move saying it would help promote cross-border trade.

According to Desai the value of Kenya’s imports from Uganda grew from Sh11.5 billion in 2016 to Sh47.3 billion in 2018.

On the other hand, the value of exports dropped from Sh24.2 billion in 2016 to Sh8.9 billion in 2018.

“This is an indication that the potential for revenue generation along the northern corridor is high and needs to be harnessed.

We need to invest more by creating infrastructure to promote exports and increase our export earnings to finance our imports” said Desai.

Desai, however, lamented the lack of a physical link and logistics centre on the Northern Corridor saying it had resulted in the failure to attract adequate investment that would generate economic activities and spur development.