Impact of the Standard Gauge Railway on the Economy

The Standard Gauge Railway (SGR) is the foundation for an efficient transport corridor that is expected to boost economic growth, development and achievement of Kenya’s Vision 2030.

The Standard Gauge Railway has got many positive effects that are expected to open up the interior and provide access to overseas markets for Kenyan goods, especially in the agricultural sector. The railway line being a common denominator among the main town in the country, urbanization has been seen to expound from where it is currently. Areas that the Standard Gauge Railway will be passing through will be influenced whereby more developments will take place, thus leading to growth in the business sector.

Already, its impact is already being felt whereby at least 30 per cent of the financing cost is being spent in the country, while many people got employed thus unlocking the local employment sector. At least 60 new jobs are created per every kilometer that is being constructed. Both individuals and SMEs benefit from the construction as demand for steel, cement, cables, aggregates and electricity pylons is high, thus supply in continuously needed.

The service providing sector has also not been left out since services such as healthcare, catering security and entertainment are being provided to SGR workers. This has in turn created a captive market for the sector.

Technological transfer is also something that as a country, we are taking advantage of, thanks to that SRG. This is because skills have and are still being equipped to those individuals working in the construction. The skills will last since even after the project is over, more people will have learnt how to go about the whole process, thus transfer the same knowledge to future generations.

Once completed, the line will operate on the principle of “open access”, something akin to a normal road. Local entrepreneurs will have the opportunity to participate in the provision of railway transport services by investing in locomotives and rolling stock. In the long run, the benefits arising from the SGR project far outstrip its cost.

The projects’ return on investment will be positive considering the key deliverables such as the provision of a modern and efficient transport system; creation of new sustainable businesses and jobs and the enhancement of local and regional commerce.

The economy of the country is set to improve as transportation costs will decrease. On its completion, Kenyans from all walks of life will benefit from considerable cost savings in the next three to five years. The country’s vision of being a preferred business destination for both locals and foreigners is almost being achieved, as the construction is expected to be complete by June next year.

Article by Vera Shawiza.