China-built railway will boost Kenyan economy

By He Wenping Source:Global Times Published: 2017/6/6 22:18:40

Illustration: Peter C. Espina/GT



 

Will Kenya see an increase in its government's debt burden due to the construction of a Chinese-built high-speed railway named the Madaraka Express? Built by the China Road and Bridge Corporation, the rail line, connecting the port city of Mombasa with the capital of Nairobi, cost $3.8 billion, and concerns have been expressed about Kenya's possible exposure to debt risk if the country fails to repay the Chinese loans.

The Madaraka Express is not a nonprofit aid project for Kenya, which means Kenya has to ensure efficient operation of the rail line to make sure there's enough revenue to repay the Chinese loans and cover the railway's maintenance costs.

People who are familiar with history may perhaps think about the Tazara railway linking Tanzania and Zambia, once a flagship Chinese project built in the early 1970s. The 1,860-kilometer communication artery was burdened with huge debts and sporadic line outages that reduced cargo volumes considerably.

But in my opinion, the Madaraka Express is unlikely to follow in the same path. The troubles for the Tazara railway came from three key areas: First, the railway and its operations were transferred to the governments of Tanzania and Zambia in 1976. The joint management of the two sides was inadequate, and the unclear division of rights and duties led to low operating efficiency. Second, Port Elizabeth in South Africa played a greater role in the years after South Africa abandoned apartheid, resulting in rapid development of the traffic network connecting the port with land-locked African countries, and this took away a lot of business from the Tazara railway. Third, given sporadic line outages and labor strikes, a shift to road transport by potential customers was another key reason impeding the sustainable management of the railway.

China has learned lessons from Tazara and made progress. When it comes to site selection and design, Mombasa Port is the major gateway for trade with East Africa and there is therefore not much competition from other routes for the Madaraka Express. The rail line is likely to operate at nearly full capacity in the short term.

Besides, as some African countries lack experience in operating as a railway infrastructure provider, measures have been taken by the Chinese side to help Kenya cultivate its ability in this regard. China has made efforts to train local residents to be train drivers, technology maintenance personnel and service staff. And Chinese enterprises will participate directly in the operating management of the railway in the next few years. China has accumulated valuable experience in managing and operating infrastructure projects and now the country can bring this experience to African nations.

However, in the long run, the prosperity of the Madaraka Express ultimately has to depend on the demand for transport networks brought about by the industrialization of Africa. The development of transportation networks will promote the advancement of industrialization, which will, in turn, generate demand for transportation, guaranteeing the profitability of infrastructure such as railways, highways and ports. As for the Madaraka Express, the condition of the routes between Mombasa Port and African landlocked countries is backward, and has failed to keep up with the needs of economic development. Transport facilities in the region have to be improved if Kenya wants to speed up its industrialization. The establishment of a new transport network is a prerequisite for economic development.

Industrial development also requires a big market, but most African countries do not have large populations, especially in East Africa, where Kenya is located. Some manufacturers have the ability to engage in mass production but if their products are sold only in the Kenyan domestic market, it is difficult for them to make a profit. The Madaraka Express will help accelerate the integration of local markets in the region and thus promote the development of industrialization.

Industrialization has long been a dream for many African countries, but regrettably, it has not yet been achieved. At present, the overall level of industrialization in Africa is still relatively low, with economic development of the region uneven. In addition to the lack of a unified market and the backwardness of its infrastructure, East Africa faces other challenges in advancing industrialization, such as a shortage of skilled workers. It is difficult to speed up industrialization in the region relying simply on the construction of the Madaraka Express, and more efforts will be needed from African countries.

The author is chief researcher at the Institute of West Asian and African Studies at the Chinese Academy of Social Sciences. bizopinion@globaltimes.com.cn



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