Tanzania / Uganda: Lake Victoria Marine Transport

Facilitating regional trade

Challenge

Inadequate transport infrastructure presents a major barrier to trade expansion in sub-Saharan Africa. Limited routes are vulnerable to disruption and the costs of transporting goods to market are prohibitively high for regional traders and producers. In the countries bordering Lake Victoria (Kenya, Tanzania and Uganda), the majority of existing freight is transported by road via the region’s congested Northern Corridor. Freight transport across Lake Victoria is undertaken on an ad hoc basis and vessels sail only when full. This approach has economic and opportunity costs for businesses, particularly those working with time sensitive cargo.  The Heads of State of the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) are committed to adopting an integrated approach to diversifying trade routes, recognising the potential to transform Lake Victoria from a trade barrier to an important trade route.

Solution

Under development
US$1.75m
2016 -

Originated in 2013 by eleQtra who has led development in its capacity as InfraCo Africa’s principal developer, the Lake Victoria Marine Transport (LVMT) project will pioneer a scheduled roll-on roll-off freight transport service across Lake Victoria, transporting fully laden trucks. LVMT will commission a purpose-built vessel and operate a scheduled freight service, as well as making improvements to facilities at Port Bell (serving Kampala, Uganda) and the Port at Mwanza South, Tanzania where necessary. Delivered in partnership with Grindrod Limited (Grindrod), it is anticipated that LVMT will demonstrate market appetite for a scheduled service, attracting investment from the private sector and Development Finance Institutions to expand freight capacity and to provide additional cross-border routes in the future.

The service is expected to become operational in 2022. The LVMT ferry will carry an anticipated 123,000 tonnes of cargo in its first year, increasing to 337,000 tonnes annually by year five.  With lower freight costs than existing transportation routes, it is anticipated that the project will save the economy US$4.9 million in the first year alone.   Access to a scheduled freight ferry will relieve pressure on roads, offering producers and traders a reliable, sustainable, cost effective and faster route to regional markets, and reducing carbon emissions. Affordable access to markets will facilitate economic development and combat poverty.

InfraCo Africa currently operates a passenger and freight ferry service on Lake Victoria as part of the multi-sector Kalangala Infrastructure Services (KIS) project. Linking Bugala Island to mainland Uganda, KIS’s safe, reliable ferries have demonstrated demand and enhanced trade opportunities, benefits which InfraCo Africa hopes to replicate through LVMT.  PIDG’s Technical Assistance Facility (TAF) and the EU-AITF have supported LVMT’s design and development, providing US$360,000 and EUR2,000,000 respectively in grant funding for feasibility studies around market assessment, technical definition and design, assessment of the legal and institutional framework, port infrastructure, shipping lanes and customs processes. Throughout the development phase of LVMT, InfraCo Africa worked with eleQtra (drawing on experience gained during the development of the KIS project) and with Grindrod (drawing on the company’s established transport and logistics capabilities and understanding of African trade flows) to successfully deliver LVMT.