CONTRIBUTORS
Boscow Okumu
Associate Research Scientist-Impact Evaluation
Christine Ger Ochola
Communications Officer
Mulusew Gerbaba Jebena
Associate Research Scientist – Impact Evaluation
Kenya has made significant investments in large-scale infrastructure projects. However, empirical evidence on the impact of such infrastructure projects, especially at the micro or household level, is largely missing. Impact evaluation plays an important role when measuring the effectiveness of large-scale infrastructure projects since it provides actual evidence of their socioeconomic benefits. It enables policymakers and stakeholders to assess whether investments translate to tangible improvements in people’s lives.
On December 25, 2022, five years after the launch of the Standard Gauge Railway (SGR), a journalist from Citizen TV Kenya described it as a ‘game changer’ and a ‘fortune changer’. In a six-minute video clip (watch here), the journalist traveled to communities affected by the infrastructure project and highlighted how household lives have transformed due to the SGR. This $3.8 billion investment, inaugurated in May 2017, has been instrumental in reshaping Kenya’s economic landscape.
The journalist’s report reinforces a broader global narrative that modern transport infrastructure significantly improves economic welfare. Kenya’s ambitious SGR has revolutionized transportation, trade, and mobility. But beyond the macroeconomic indicators and qualitative reports dubbing it a “fortune changer,” empirical studies exploring its direct impact on household welfare remain limited. Motivated by this knowledge gap, researchers from the African Population and Health Research Center (APHRC) and the State Department for Economic Planning, Kenya, conducted an in-depth study to investigate the true effects of the SGR on household welfare.
The SGR, a flagship project under Kenya’s Vision 2030, was designed to improve connectivity between Mombasa and Nairobi, with extensions to Naivasha and plans for further expansion to Uganda. The railway has facilitated faster, safer, and more cost-effective transportation of goods and passengers, directly impacting household incomes and expenditures.
Using a quasi-experimental approach, in collaboration with the researchers from the State Department for Economic Planning, Kenya, we examined how the introduction of the SGR influenced household welfare by analyzing per capita monthly expenditure before and after the railway’s construction utilizing various datasets from the Kenya National Bureau of Statistics.
Previous studies have used different approaches to evaluate the impact of infrastructure projects, with some using either the difference-in-difference approach or propensity score matching in different contexts. In Kenya, most studies have been descriptive, using mainly qualitative approaches with limited empirical evidence. To enhance accuracy and robustness, this study combined both difference-in-difference and propensity score matching methods and estimated their impact. This methodology minimizes biases and improves the precision of impact estimates, adding significant value to the analysis. This analysis was conducted during the three months of virtual and one week of hands-on training facilitated in June 2024 by APHRC with the support of the Hewlett Foundation to strengthen the Impact Evaluation in Africa (ENICA) project.
The study findings revealed that access to SGR increases household welfare. For instance, households in counties with SGR stations experienced a significant rise in per capita monthly expenditure, averaging Ksh. 1,596 (USD 12.50) higher than those in non-SGR counties. This implies that closeness to the railway promotes economic activity and spending power.
Additionally, poverty rates were lower in regions connected to the SGR, with fewer households classified as food-poor or living in absolute poverty. Improved transportation infrastructure appears to have increased access to economic opportunities, allowing households to secure better living conditions and financial stability. Urban households along the railway corridor benefited significantly from increased job opportunities and better market accessibility. These advantages translated into higher disposable incomes, enabling families to improve their living standards. Similarly, a few available research studies on Kenya’s SGR also show that large-scale infrastructure investments can result in positive socioeconomic impacts at the household level.
However, the findings also highlight disparities in benefits, as households with higher education levels and urban access experienced more pronounced economic gains. This highlights the need for complementary policies that promote inclusive growth, ensuring that rural and lower-income populations also reap the benefits of infrastructure investments like the SGR.
To address these challenges, future policies should prioritize expanding the SGR network to include more rural areas, ensuring that economic benefits reach all regions. i.e., sustained policy interventions are needed to maximize these benefits and ensure that all segments of the population share in the gains.
Investing in last-mile connectivity is also necessary to ensure a smooth journey from railway stations to final destinations. Without effective connections to other modes of transportation, the railway’s impact may be limited. Moreover, promoting equitable economic growth by supporting small businesses and informal traders who rely on the railway for market access would be important for maximizing its full benefits.
As Kenya continues to invest in its transportation sector, the lessons learned from the SGR can inform future projects, ensuring that infrastructure development remains a key driver of economic prosperity and improved quality of life for all Kenyans. Future studies could also look at the impact pathways of SGR access on household welfare, looking at various welfare indicators.