FROM MAGAZINE: Rwanda sets sight to become Africa's logistics hub

Landlocked Rwanda has ambitious plans to be a tech-savvy logistics hub in Africa. With a growing regional economy and innovative infrastructure transactions such as the Kigali Logistics Platform, the new airport construction and proposed SGR, the potential exists for significant change, Surya Kannoth reports.

Rwanda has transitioned from suffering one of history’s worst genocides in 1994 to becoming one of the fastest-growing economies on the continent. The country now wants to establish itself as a business and technological hub of Africa. By attracting more foreign investment, Rwanda is also looking to wean itself from foreign aid, which accounts for almost 40 percent of its annual budget.

China, one of its early investors, has made significant investments into the country. Cooperation between the two nations has grown significantly in recent years and it was further boosted by President Xi Jinping’s pledge of $60 billion to Africa under the Forum on China-Africa Cooperation in December 2015.

In 2016, Dubai-based port operator DP World was granted a 25-year concession to develop and operate a new logistics centre in Kigali, Rwanda. Rwanda aims to enhance the country’s logistics industry to support the export of products for regional and international markets. The DP World Kigali Logistics Centre is expected to significantly contribute to the development of this strategy.

The DP World Kigali Logistics project is a greenfield concession agreement. The first phase will be built on 90,000 sqm (969,000 sq ft) with a 12,000 sqm (129,000 sq ft) container yard and a 19,600 sqm (211,000 sq ft) warehousing facility. Estimated annual capacity is 50,000 TEUs and 640,000 tonnes of warehousing space. Total project cost is estimated at $35 million, and further development will be phased in line with demand growth.

The first phase of the construction of a $35 million inland container logistics centre is currently underway on a 30-hectare plot of land in eastern Kigali, Rwanda’s capital. The completed facility will offer warehousing, truck parking, a container yard and other auxiliary services. It is also expected to improve the flow of goods for both regional and international markets.

The project is one of the first competitively tendered PPPs to close in Rwanda, and the first logistics project of its kind in Africa. Rwanda will benefit from the establishment of a world class logistics facility that will increase the efficiency of its trade routes from and to the surrounding countries of Uganda, Tanzania, Kenya and Burundi and the central African region, but the government will only cover a limited amount of the cost while receiving a concession fee from DP World.

Rwanda is now building a new airport at Begusera International Airport (BIA) in the eastern province. The new airport is being built to handle the rising air traffic in the country, as well as bolster intra-African travel, investment and business.

China was looking forward to start works on a new road linking Kigali to the proposed Bugesera airport, which is currently under construction. Reportedly, slated for completion by December 2018, the first phase of the construction will cost $418 million and increase the airport’s annual passenger handling capacity to 1.8 million. During the second phase, which is valued at $400 million, a wide range of extension works will be carried out at the airport.

On the rail front, the governments of Tanzania and Rwanda have commissioned a feasibility study into electrification of the long-planned 521 km cross-border rail link between Isaka and Kigali. The line is intended to connect the landlocked countries of Rwanda and Burundi with the inland container terminal at Isaka in Tanzania, which is linked to Dar es Salaam by an existing metre gauge line. Currently, around 80 percent of Rwanda’s international trade passes through Tanzania, although a rail link running north through Uganda is also on the cards.

In March 2018, the transport ministers of the two countries agreed to establish a Project Implementation Unit to oversee construction, which is expected to begin later this year under the terms of a bilateral agreement signed by Rwandan president Paul Kagame and Tanzanian president John Pombe Magufuli in January.

According to Rwanda’s minister of state for transport Jean de Dieu Uwihanganye, the electrification study will be overseen by the Rwanda Transport Development Agency and the Joint Technical Monitoring Committee. Electric operation would reduce the railway’s environmental impact as well as permitting higher speeds; passenger trains would be able to operate at up to 160 km/h instead of 120 km/h, while freight trains could be accelerated from 80 km/h to 120 km/h.

World’s first drone airport on the anvil

In October 2016, an automated logistics company based out of California Zipline launched the world’s first national drone delivery operation in Rwanda. The company was contracted by the government of Rwanda to establish a distribution center with 15 drones to deliver blood, plasma and platelets to 21 hospitals across the western half of the country. Since launching the service is Rwanda, Zipline has flown 300,000 km delivering 7000 units of blood over 4000 flights approximately a third of which has been in emergency life-saving situations.

The company is now delivering more than 20 percent of Rwanda’s blood supply outside of Kigali. In addition to its impact on lifesaving emergency situations, Zipline’s just-in-time drone delivery has helped transform the country’s medical supply chain. To date, instant drone delivery has helped ensure that hospitals always have access to blood products, increasing the use of some blood products by 175 percent and reducing waste and spoilage by over 95 percent. Zipline is in the process of opening its second distribution center in Rwanda, which will help bring the entire country within range of its life-saving service.

Recently, Zipline unveiled the fastest commercial delivery drone on earth. Zipline’s newest generation of autonomous aircraft flies farther, faster and with more cargo than was ever before possible— even in high altitude, heavy wind, or rain.

The new aircraft is part of a complete redesign of Zipline’s logistics system, which dramatically improves the system’s launch, autonomous flight, and landing capabilities. The improvements will decrease the amount of time between Zipline’s receipt of an order and launch of a fulfillment flight from 10 minutes to 1, increase the number of daily delivery flights that each Zipline distribution center can make from 50 to 500, and expand the radius of each distribution center to serve populations of up to 10 million people.

“Our first generation aircraft and logistics system allowed us to create the first and only drone delivery service in the world, which is helping to save lives in Rwanda every day,” said Zipline CEO Keller Rinaudo.

The government of Rwanda is moving quickly to establish regulatory frameworks for remotely piloted aircrafts, following interest from an investor to build the first airport for drones in the country.

Norman Foster, a world renowned British architect, had expressed his firm’s interest in building the first worldwide drone port in Rwanda. The aim is to enable the speedy delivery of urgently needed medical supplies as well as electronic supplies to the more remote parts of the region, through the use of drones. In his proposal, Foster and his partners in the project said that they intend to commence the construction of three drone ports over a span of four years.

According to Foster’s proposal, the new facility will feature two networks: one that will be dedicated to the delivery of essential emergency and medical supplies and another used for commercial purposes that need the delivery of larger, but still crucial payloads, such as electronics, e-commerce tools and spare parts.

Foster’s company is looking to develop a facility that will be used by countries in the entire region and plans to expand to the entire continent of Africa. In the remarks he made, which accompanied the proposal and the implementation plan for the drone port, the architect stressed that, in the same way mobile phones have supplanted landlines across the continent, cargo drones are capable of overcoming geographical boundaries with minimal need for the construction of vast physical infrastructure.

According to a press statement by Tony Barigye, who is the public relations officer for the RCAA, the aim of the new regulations is to ensure that the adoption of the technology is done in a way that is efficient, safe and secure.

“As soon as the regulations are in force, Rwanda will be able to regulate any projects related to remotely piloted aircraft systems including and not limited to drone operations and all infrastructure required,” he said.

While the project is proposed in subsequent phases, there will be 40 similar facilities set up all over the African continent. Rwanda was chosen for the first drone port since its location is seen as ideal for expansion into neighbouring countries.

In addition to the airport itself, the facility is expected to create an ecosystem around it which could be developed into a commercial hub. It will have a digital fabrication facility, an e-commerce trading center, a health clinic and a courier room.