People, commodities and money are the three things that are in constant motion in any economy. Our biggest natural resource as a nation is the people who are the main cog in the wheels of productive industry, working to either add or create value through agriculture, manufacturing or services, outputs of which are exchanged for value or other legal tender.
Over the past decade in Kenya and now spreading like a wildfire throughout Africa and the rest of the world under the fintech banner, we have figured out how to move money faster, more securely and more affordably. From mobile money to cryptocurrency, traditional banking and everything in-between, we are spoilt for choice in our preferred mode of movement of key mediums of exchange.
However the movement of people and commodities is stuck in the past, driving up the cost of production, day to day living and resulting in great losses from spoilt or damaged products and innumerable work hours wasted by human resource in transit – until now.
As counties polish up on their competencies and develop their economic zones, the standard gauge railway dubbed “The Madaraka Express” whose official maiden trip happens with H.E. the President today (31st May 2017, 24 hours before the self-rule holiday celebrations of 1st June, a Vision 2030 flagship project under the infrastructure pillar comes into focus.
While attention in terms of future value has been drawn towards decongesting the ports and moving imports faster with containers said to only take six hours from Mombasa to Nairobi instead of the current 48 hours by road, what are the other longer term benefits?
Technology based solutions can and will add tremendous value to some five priority sectors;
That can be summarized aptly by people and commodities.
Urban living and its attendant stresses has been the default for millions of citizens who earn their daily bread from the economic centers that are cities and towns. Housing costs can eat up to 70% of ones take home wage or salary, a necessary evil spurred by intense competition in the labor market and rural to urban migration.
The Madaraka Express which in context for me works out to “freedom express”(hidden pun on Uhuru perchance) will offer a more reliable and affordable core transit system that will open up housing options and if well integrated to other complementary ecosystems will see consumers adopt the different modes available to them that will make travel for work or pleasure less of a chore and keep more money in consumer wallets that can be spent on additional needs.
Local tourism will also see a sustained spike due to the proximity of various nodes along the artery that is Nairobi to Mombasa.
Logistics and allied costs can add up-to 45% on the market price of processed goods and fresh produce. Coupled with poor back-haul optimization of traditional carriers, manufacturers, processors and producers have had to pass on those costs to consumers and suffer from the inefficiencies for decades.
While some may argue that the Madaraka Express will take business away from current carriers with a projected 40% saving on costs, I am of the opinion that the incumbents and new comers will adapt themselves to serve the shorter and more profitable last mile as road infrastructure also gets upgraded.
This will then make it possible for every small-holder farming household with semi commercial ambitions to access far flung local markets; with demand and supply powering local commodity exchanges with the added effect of driving consumption of mobile data and purchase of smart enough phones, increasing utility of mobile money and even making a mark on struggling verticals such as insurance.
Look into and prepare for the adjacent opportunities that are soon docking; and do not miss this train.