Uganda is increasingly turning to its railway network to ease the movement of cargo in and out of the country.
While rail transport is cost-effective in terms of time and money, the system has yet to deliver on its full promise.
As of last year, Uganda Railways Corporation (URC) moved more than 290,000 tonnes of cargo, generating more than Shs19b in revenue.
However, this figure falls significantly short of the one million tonnes needed annually to break even.
‘There was a slight improvement in cargo movement compared to the previous year,’ said Benon Kajuna, the URC executive director.
‘We are still stabilizing operations. Last year, we moved about 290,000 tonnes, roughly 25,000 tonnes per month, but the target is to move 70,000 tonnes per month.’
As the company strives to grow its cargo business, there are still unanswered questions, including diversifying its cargo beyond staples like steel, wheat, fuel, and wood to include a broader range of imports.
Optimising a stretched fleet
Currently, URC operates with just two locomotives, which shuttle between Kenya and Kampala, leading to frequent delays.
Earlier this year, cargo was stranded at the border due to maintenance issues and fuel shortages.
Despite these setbacks, Kajuna remains optimistic. ‘We are optimizing the few assets we have to handle both cargo and the growing passenger business,’ he said.
‘Cargo volumes are increasing, albeit slowly. We expect to stabilise once we acquire more assets.’
URC seeks to scale up from the current 295,000 tonnes per year to 1.2 million tonnes annually within five years.
However, to achieve this, URC must cover a Shs1.7 trillion investment gap, largely attributed to a former concessionaire’s failure to invest in the system.
Shifting cargo trends
Originally, Uganda’s railway was designed to transport copper and agricultural exports from the north and southwest.
That business faded in the early 1990s, and the railway now primarily moves steel, petrol, and wheat imports.
Efforts are underway to encourage businesses to shift their cargo to rail, but reliability remains a concern.
Still, the railway is gaining traction for transporting coffee and plywood exports, two sectors on the rise.
Government to the rescue
URC urgently needs a facelift: new locomotives, upgraded container depots, and a refreshed workforce. But with limited revenue, URC is relying on government support.
‘We’re currently earning about Shs19b, which is far below our target,’ Kajuna said. ‘We need government support whenever we fall short financially.’
The Ministry of Finance plans to inject Shs189b over the next two years to help URC stabilize operations.
The funds will go toward rehabilitating more than 600 wagons, purchasing equipment for the Tororo-Gulu line (expected to be operational by February next year), and servicing the critical Malaba-Kampala corridor.
Staffing is also a concern, with ‘most of our workers’, according to Kajuna, past retirement age.
‘We need to recruit and train new staff over the next three years.’
Digitising for the future
Globally, rail systems operate 24/7. In Uganda, however, train services run on an eight-to-five schedule, limiting efficiency and growth.
URC sees digitization as the key to unlocking its potential.
The digital overhaul will begin with internal systems, particularly fuel management, URC’s largest cost centre, before expanding to billing, booking, and payment platforms.
‘Digitisation is already underway for our passenger services. Now we need to develop systems for cargo,’ he says.
This digital shift also serves as a rehearsal for managing the future Standard Gauge Railway (SGR), which will be fully digital once operational.
As Uganda ramps up its manufacturing ambitions, a modernized railway will be essential for moving both imports and exports.
But to get there, URC and the government must invest over Shs3 trillion in the next five years to ensure efficiency and reliability.