Thursday, 21 September 2017

Annulment of Kenya Presidential election: Pedestal..Judicial activism

The USCJ 's tweet
When the Supreme Court annulled the election of Kenya annulled the election of President Kenyatta three weeks ago, it was a precedent. It was hailed world-wide as a first in Africa, where a Supreme Court Judge had the temerity to invalidate the election of a sitting President. 
However, the Chief Justice of the US supreme court has dismissed the ruling as Pedestal... judicial Activism

When the President in a fit of anger dismissed the ruling as the “work of thugs promising to fix the Judiciary if re-elected, legal minds in Africa went for his Jugular, “lecturing” him on respect for institutions of governance and especially the judiciary.

This is where the legal minds missed the point.  There an ominous threat in the President’s use of the word wakora- Kiswahili for dishonest people. That word for any student of linguistics was an indication that the President knew more than he said.

 While the world was cheering the decision of the Court, some in Kenya could not make sense of a ruling that had no definite culprit. The Court exonerated the President of any wrong doing; blaming the mess on the body the managed the election. The voter turnout was large; the voting process was peaceful and calm; the failures of the electoral commission were not criminal in nature said the Court; the numbers each garnered were not in question. So what went wrong? What justified sabotaging the voter’s will?

Three weeks later, things fell apart.  A Petition was filed with the Judicial Service Commission calling for the dismissal of two of the four Judges who annulled the President’s election.  The judges, the petitioner said, were in “improper contact” with the Lawyers and representatives of the Presidential petitioner, during the hearing of the matter before them. 

The two judges were said to have met with the advocates of the petitioner in a residential flat in a city up- market estate and in a hospital. The calls logs of their telephone numbers were also listed as evidence of such inappropriate contact.
A leaked document from the chief strategist of the Opposition chief also admitted as much. The document advises complete silence over the explosive discovery. It also advises ceasing of all communication with the named Judges.
 The detailed ruling of the finding of September 1st read on Sept.20th exonerated the IEBC and the President of any wrong doing. But there were two dissenting judges in the Supreme Court ruling and the two minced no words tearing the findings of their four colleagues apart. 
Letter allegedly written by Orengo
The two dissenters, who are also long serving judges of the Supreme Court, found no evidence in the petition to warrant invalidation of the election results. They wondered what evidence was adduced before the court to warrant such a decision. The two dissenting judges depicted their colleagues as a lazy lot that depended on the word of the petitioner to annul a lawful and valid election.
One of the dissenting Judges, Lady Justice Njoki Ndungu, accused her four Colleagues of not even verifying the documents filed in the Court Registry. Her verification, she said, found that all documents presented as forgeries were in fact intact in the Court Registry. She wondered why the Court did not order for the recount of the Presidential votes.
Apart from the two dissenting judges in the Apex Court, The chief Justice of the United States of America, john G Roberts in a tweet dismissed the ruling of the Supreme Court of Kenya as “Pedestal ….Judicial activism,” The judgement he said was no more than “redeeming their image and seeking international publicity.”
 If this tweet is true, then his is a harsh indictment if there was any.
Kenyan critics had already dismissed the ruling as a “Court assisted Coup” by regime changers in the NGO world.
 Given such harsh indictment by critics and probably peers, it seems Kenya’s Supreme Court will set another precedent in Africa, of a court that executed itself as Lazy and discredited itself.
 Apart from the dissenting Judges, two other judges also played hide- and- seek.  One fell sick for the duration of the hearing leaving the petition to be heard by a six –Judge Bench instead of a full bench of seven Judges.
One of the four judges that made the majority ruling was “out of the country” on the day of the detailed ruling. But whispers have it he bolted out on realizing there was mischief by his two colleagues. A tweet by the two leading dailies indicated that he pulled out because the allegations of improper conduct on the part of his colleagues “were undeniable.”
So where next after this? Analysts say that President Kenyatta will win the election again. And once in Office, there will be a bomb dropped at Kenya’s apex Court. Three of the seven judge bench are headed out, “whether they have security of tenure or not.” The three include; Chief Justice David Maraga, his deputy Philomena Mwilu and Justice Isaac Lenaola. The three who are also new entrants in the Supreme Court, have their credibility dented beyond repair.
 Snippets of the evidence filed to support allegations of improper contact, were so detailed as to suggest the hand of the country’s spy outfit, the National Intelligence Service, NIS. If this is true, then the three judges should start leaving else they shall be hounded out of office.
There are doubts that the CJ and his deputy even wrote their rulings given that they had difficulties reading the rulings. “They stammered like class- two kids learning to read a complete word,” said an observer. Kenyans too have not spared them. A local critic. Prof. Mutahi Ngunyi, said in a tweet that Justice JB Ojwang, one of the dissenting Judges, executed himself with such confidence “he made the CJ look like crass.” Mutahi wondered why “JB is not the Chief Justice in Kenya.”
 That is a view shared by many Kenyans who want the CJ out.

 The re-alignment in the Supreme Court over the Presidential Vote ruling, is a pointer that a major surgery is due in the Apex court. And the old hands in the Court, Justices, Ojwang, Wanjala, Ndungu and Ibrahim appear to have allowed the new comers, Justices, Maraga, Mwilu and Lenaola to roast in their own fat. Apart from the three losing face among Kenyans, the stand a chance of being a case study at how judges should not rule.

  From Africa Development Magazine

Thursday, 14 September 2017

The economic cost of Raila’s brinkmanship


Kenya’s economic growth this year, which was projected to hit 5.9 per cent, has slowed down. It is projected to slow to over 4.0 per cent.
Kibera: Home of the wretched of the earth.
Raila's constituency for 20 yrs
The country was facing a slow-down in economic activity during the political campaigns, which slowdown eased after the results were announced, declaring President Kenyatta the winner.  However, the Ruling on September 1st, took the country back on the roller coaster.
 In a matter of hours, three hours to be precise, the Nairobi Stock Exchange’s capitalization shaved off Kshs 92 billion, and by the end of the second trading day, Monday September4th, the losses had climbed to Kshs 131billion.
 In the forex market, the shilling which had been gaining since Uhuru was declared President, was also battered. It shred off 35 cents against the US dollar after the ruling. 
It opened at 102/75 buying 102.95 selling Friday morning but slumped to 103.10 buying 103.20 selling. Kenyan debt stock overseas also bled. On that day alone Kenya’s forex reserves were shaved off kshs 356 million. The country’s daily turnover is slightly more than US$10 million.

The middle class has adopted a wait- and–see stance, consuming less and saving more. The shilling is still struggling to recover its Pre- Sept1 strength. Investors have decamped while others have kept their plans on hold.

  The economy was struggling due to drought effects which slowed down agricultural output. Food prices were high driven by shortages caused by the drought.

But now the crisis sparked off by the “conscience ruling” and the political brinkmanship that NASA has adopted since the SCOK ruling that “vindicated” him is bleeding the economy. Why is this? Raila has little appreciation of economic matters.

 According to a strategy Paper dated September, 8th, 2007, ODM identifies Raila’s weaknesses as limited understanding of Economic Matters as a major weakness, potential for linkage with under-development in Nyanza and Political party nomadism. The paper also lists his threats as Kibera’s under development and his penchant for making ad hoc improvised statements.

The paper, minutes of a strategy meeting by the core team comprising of; Prof. Anyang’ Nyong’o the then ODM Secretary General, Prof. Edward Oyugi; Prof. Patrick Wanyande and Mr. Adams Oloo lists deception  and bribery of journalists and editors as some of the ways of covering up for the weaknesses.

 A Policy Brief by the EU intelligence unit has clearly described him as poorly educated. It says, he never attended any institution of higher learning in East Germany. Although registered in the Technical Institut of Magdeburg, he never attended class.

The EU Policy brief says he will not even blink if Kenya was to tip over into chaos if that is the price the country has to pay for his accommodation in the government.  It says he impressed his handlers in Stasi, the East Germany secret Police during the cold war era, with his grasp of political brinkmanship using violence to achieve is ambitions.

 Raila has always been a disruptive person quick top resort to violence to keep his ambitions going. His supporters are quick to resort to violence and destruction at the slightest provocation, even if it’s a rumour.
 It is to be recalled that in 2008 the same brinkmanship devastated the country’s GDP growth from seven Percent in 2007 to just about two per cent in 2008. In the last five years, he spent time sabotaging the sitting government with allegations after allegation of corruption.

 He even fought and destroyed the National Youth Service programme that was upgrading lives in the slums. Although there was some corruption, that was the smokescreen he used to destroy a programme that was a major threat to his political base, the lumpen proletariat living in the slums.

Now we are about to witness another economic slump due to his shenanigans.  We are now at the  deception and disruption stage according to his book, the next step would be destruction!  Kenya, the economic hub of east Africa is being sabotaged by one person and his cohorts. That the Economics costs of Railaism for you.


Saturday, 9 September 2017

Raila’s mantra: deceive, defraud, disrupt and/or destroy

Mpeketoni in 2014: Was the attack meant
 to scuttle the Eurobond?

According to an intelligence review seen by this publication, Opposition leader, Raila Odinga’s political strategy involves 4Ds which have put Kenya on the brink of a precipice.
 The 4Ds are: Deceive, Defraud, Disrupt and/or Destroy. The publication says he learnt this strategy from agents of the foreign intelligence section of Stasi, the East German secret police of the cold war era.
The unit was led by Markus wolf, the famous man without a face who outsmarted western spy agencies due to his ability to elude being photographed.

 According to the publication, Raila was sent to study in East German in the 60s when his Father Jaramogi Oginga Odinga, was Vice-President in Kenya. 

The man only qualified for a certificate in ability to speak German from Herder Institut. The Document, Policy Brief, by the European council of Foreign Relations authored by its EU intelligence and Situation Analysis Centre, describes Raila as a poor student who took four years to gain the certificate.

Titled The Great Unravelling Doomsday scenario: Kenya on the edge of Precipice, the document says Raila was enrolled at the Technical School of Magdenburg but never attended class for a single day. He was busy learning Marxist ideology with East German Marxists “who saw his connections back home as a useful asset in the wider scheme of ideological influence in Africa.”

 Quoting declassified East German documents, the Brief says that Raila was perpetually broke in East German so he turned to smuggling, heading a  drug smuggling ring  to West German and vice versa. “He smuggled European cigarette Brands and Marijuana to his East German handlers through the check point Charlie, the best known Berlin wall crossing point between East and West Berlin, during the cold war era.”
He trained as a LADA Mechanic for Nine months, the document says, for the rest of the time he was being indoctrinated on Marxists ideology by the Stasi. LADA is a Russian made automobile.

 Even here he was a poor student who took longer than others to grasp the basics of Marxist ideology. “He was disorganized and disruptive, never kept time and a raging alcoholic who loved to smoke marijuana,” says the report, quoting the same declassified intelligence files.

“He never kept friends but African students in East German then simply tolerated him because of his status and because he occasionally supplied them with east European prostitutes for a fee,” it says.

While he took longer to understand Communist ideology, he believed in it. He “excelled in the theory of political deception, mobilizing and political brinkmanship.” His instructors were impressed with his  achievement in this side with one noting he had been turned into a useful asset- a useful idiot, says the document.

The report seems to hold the view that Raila will lose again to Kenyatta in the forth-coming elections warning that Kenya could be on the edge of a precipice.  Raila could again reject the loss and do a Besingye- that is get some Luo judges to swear him as President perhaps in Kisumu. That would be treasonable and could lead to blood bath, it warns.
It is not clear if there are madmen among the Luo judges in the Judiciary who can undertake such a treasonable act.
Mobilzing Child Soldiers?
 However, even the Chief Justice and four others made a determination that Uhuru’s election was invalid with giving any ruling.

 The report warns that Raila would not blink if Kenya fell over the precipice if that is the price to pay to get him accommodated in the government.




Chronicling his penchant for Violence the report says that soon after he returned home, he organized the 1982 failed Coup together with Luo officers in Kenya Airforce. He also organized Mwakenya which targeted university students among his other disruptive activities.

It also chronicles fraudulent activities beginning with his father the Late, jaragmogi Oginga odinga, received a huge amount of Money from Russia in the name of Luo thrift Union indicating that the flagship family business EA Spectre was born at about the same time. There is nothing to shows for this Union.

At home we have witnessed well- choreographed deceit which leads to fraud. It would be recalled that in mid -1990s, there was massive mobiization of funds to buy east Africa molasses plant in Muhoroni which ended up as part of the Odinga business empire.

In the recent past, there was huge mobilsation for Okoa Kenya campaign. It is not clear how much was raised and how it was used. Neither is it clear how much was raised in the campaign to support teachers on strike in 2015 and how it was used.

The –adopt- a polling station was another example of a fraudulent mobilsation of funds. Some estimates put the figure at kshs260 million raised for this campaign but was not used for the intended purpose.

On deceit, in the last five years, the NASA leader, has spilled one scandal after another some of which have turned out to be no more than well -choreographed campaigns to destroy the careers of certain Kenyans. The most prominent was the Euro-Bond saga. After failing to sabotage the US$2 billion floatation in 2014, he came up with allegation that the Money was stolen. But he refused to give evidence of such crime when called to do so.
  


The Controller and Auditor General, Robert Ouko, has yet to release a report on his audit mission to the Federal Reserve Bank in new York, almost a year since the mission was completed. 

Monday, 4 September 2017

The economic cost of SCOK Ruling


Kenya's Supreme Court Bench in session
 Kenyans, especially Jubilee supporters, saved the Kenyan economy by restraining themselves after the Supreme Court nullified President Kenyatta’s election.

The world feared an outbreak of violence and investors quickly rushed for the exit door, offloading Kenyan stocks and other debt instruments in droves.

The Kenya shilling felt the pressure, losing 35 cents to the US dollar.  

The Nairobi Stock Exchange’s market capitalization shaved off kshs 92 billion in a single day! While the  was shaved off Kshs 357 million in its forex value.

 The bourse, a barometers of a country’s economic health, suffered a massive off load with all blue-chip scripts suffering a battering. It had to halt trading for an hour when the battering hit the red line.

 In a single five-hour trading day, a total of Shs 1.64 billion was traded. This is, in normal times, the exchange’s turnover in a week. An average of shs 547 million was traded every hour on Friday.
  In the forex market, the shilling which had been gaining since Uhuru was declared President, was also battered. It shred off 35 cents against the US dollar after the ruling.

It opened at 102/75 buying 102.95 selling Friday morning but slumped to 103.10 buying 103.20 selling. Kenyan debt stock overseas also bled. On that day alone Kenya’s forex reserves were shaved off kshs 356 million. The country’s daily turnover is slightly more than US$10 million.

Kenya’s $2 billion sovereign bond maturing in 2024 fell 1.33 cents, reports said, it’s lowest since mid-August. The 2019 issue fell 0.75 cents to 102.75 cents.
 Things only calmed down when the President, drunk as most puritans said he was, addressed the nation, saying he accepts the ruling although he differs with it. His call for peace calmed the markets. And his tour of Burma market removed the uncertainty completely.

 In Jubilee strongholds which were under close watch, the people were shocked but went on their business as usual- no disturbance of any kind. That entrenched the calm in the market.

The Nairobi stock exchange is capitalized at Kshs 2.3 trillion, slightly under a third of the country’s national wealth of Kshs 7.2 trillion. It is therefore a barometer of Kenya’s economic health and a good pointer to the mess, a poorly thought out ruling- whatever its merit- can inflict on the economy.

 Without going to the merits of the ruling, the judges, including the Chief Justice, for all his alleged wisdom, did not consider the implication on the economy, their ruling would have. In just a few hours after the ruling, Kenya lost billions in the value of its stocks and foreign exchange!

 The ruling will also slow down economic growth in the fourth quarter, due to ongoing campaigns for an election to be held within sixty days. It will also cost the tax payer another Kshs50 billion in preparation for the election.

This is a triple economic injustice on Kenyans whose will was sabotaged by the Supreme Court.  First they lost in terms of the country’s wealth, which loss shall never be recovered, they also will lost in terms of tax money that will be squandered on the election. And finally, they lost their sovereign will.

 The uncertainty continued into Monday’s trading because of NASA’s objection to IEBC conducting the election. However, now that the date has been set. It is expected the markets will cool down saving the economy further haemorrhage.

Thursday, 31 August 2017

Five years of Uhuru- How will Kenya look like in 2022?


The SGR Railway Phase 2 has already begun
 Since we don’t see any threat to his Presidency, we can preview a Kenya under Kenyatta in the next five years.
He came to office on a transformation agenda. So we ask: What should we expect from him? How will Kenya be in 2022 when he leaves office? Will it be a prosperous and progressive nation or will it be poor and reactionary?

The odds appear stacked in favor of his transformation agenda.  Good luck, his personality, political environment and motivation combined favor the expectation of a positively transformed Kenya.

 President Kenyatta inherited a robust economy from his predecessor, Mwai Kibaki. 

And despite, a tough environment during his first term, he managed to keep the economy robust.  He inherited a US$60 billion economy and had driven it to a $72 billion economy by the end of last year.

He also inherited a robust 30 year economic blue print “christened Vision2030” whose mantra is a transformed and industrializing Kenya by 2030. So far he has kept to it.

 He has supported the completion of infrastructure projects that were began by his predecessor. He presided over the completion and/or launch of a number of the key projects envisaged in the blue print.
His first term was tumultuous and the learning curve was steep, yet he executed himself impressively. He came to office on a transformation agenda, making Kenya a better place to live and prosper.

He has kept a number of his pre-election promises such as free maternity for expectant mothers, delivered laptops to primary school children despite some major hiccups.  He has set up a number of “one- shop stop e-centres bringing government services closer to the people.
Galana Kulalu: Likely to attract his undivided attention

Kenyatta’s first term was defined by big spending on eye-catching infrastructure and impressive economic growth which ranged above 5 per cent, in a tough climate.

His resolute handling of sensitive matters stunned both friend and foe alike. He borrowed large amounts of money to invest in infrastructure; fought drugs cartels- sinking two ships caught ferrying drugs and allowed drug Lords to be repatriated to the US to face the law.

 He weathered storms at home including Somalia based militant attacks on: School children, shoppers at a mall, a military base in Al Ade in Somalia and civilians in Lamu, Wajir and Mandera counties; dismantled “tenderprenuer” cartels and shrugged off their flack.   “Tenderprenuers” are characters who make their living from fronting bidders for government projects for a cut.

 His administration build the first Railway line in Kenya in 100 years completing the gigantic project with 18 months to spare. 

His administration is likely to focus on completing the SGR line to Kisumu and Malaba, ensure Galana Kulalu is operational, complete some of the on-going mega projects in water, roads, electricity, ensure free education from primary through secondary, built a few thousand more kilometres of tarmacked roads and Start the construction of LAPSSET.

To be fair, many of the projects completed in his first term were began by previous administration. In fact even those that will completed during his second term were initiated by the previous administrations.
We expect more electricity generation capacity to come on the grid adding to the 2234 MW already on the grid.
We also expect oil exports to begin during his watch. The contract for transportation are already in place. In fact the early oil exports programme should have commenced in June but was delayed by technical hiccups.
His uncompromising stand weeded out cheating cartels in the education sector restoring respectability to Kenyan education certificates.

He shrugged off allegations of massive corruption in his government and delivered leased medical equipment to referral hospitals in the 47 counties.  Now Kidney patients can get dialysis in their county Hospitals.

So do we expect President to deliver this time around? The omens point to that direction. For starters, this being his constitutionally authorized last term in office, he is likely to be keen on his legacy than politics. This means that he shall have to deliver on his promises.

He has a large majority in Parliament and even in the counties.  That ensures that he has fewer saboteurs to deal with.  Even in Opposition dominated counties, opposition is likely to be muted given that their leader, the militant Raila Odinga, has been vanguished and is expected to quit politics.

 However, this overwhelming majority could also be exploited to pass legislation that will stifle Kenyans. NGOS that have been critical of him and those that helped sabotage his pet projects and the press too, could find themselves under siege.

Already, two NGOs that were accused of fishing and coaching alleged witnesses against him at the ICC are beginning to feel his weight. For them, this could be payback time. They have sought refuge in the High court seeking orders to protect themselves against de-registration but it may not be long before they cease to exist.

 Alternatively, their freedoms could be severely curtailed. Either way, the omens do not look good for them and could soon follow “tenderprenuers” and other cartels into oblivion.


How will Kenya look like in 2022? Well, we leave that to the omens. But our view is,
it will be a transformed country with reduced unemployment rates, steady economic growth, perhaps above 6.00 per cent, lower corruption index, more industries, higher FDI inflow and for the ordinary Kenyan, more democratic space and wider economic opportunities.

Saturday, 5 August 2017

Museveni deals a death blow to Magufuli's dream on SGR

Northern Corridor is Robust compared to central Corridor
 PRESIDENT Yoweri Museveni has approved the borrowing of $2.9 billion for the construction of the standard gauge railway from the Malaba border with Kenya to Kampala. This deals a death blow to Tanzania’s dream of diverting Uganda’s Railway line south to the Central corridor.

President Museveni authorized the loan on condition that concerns over the technical specifications and project costs raised by the Parliamentary Committee on Infrastructure in February would be addressed.
The parliamentary committee had demanded a complete review of the Uganda-Kenya Standard Gauge Railway Project. It was comparing the project’s costs with the Ethiopian SGR project which cost an estimated US$ 5 million per kilometre. The Malaba- Kampala line will cost an estimated $7.2 million per kilometre.

However, a technical paper, by the Uganda Ministry of Works and Transport ably answered such questions. It argues that the highest cost is in bridges, followed by the earthworks (embankment), followed by track, stations electrification and signaling among others.

For example, the paper argues, on Malaba- Kampala  line, bridges will absorb 35% of the costs, earthworks 25% , the track and station will absorb 10 % of the costs each, while  electrification and signaling will absorb 5% of the costs each and 10% others.

The Ugandan line, the paper argues, will pass through 53 kilometers of swamps meaning the embankments or mounds of stone or concrete have to be built to carry the line across. The line will have an estimated 29.74 kilometres of bridges including a one kilometre bridge across the river Nile, it says. The Ethiopian line on the other hand, has only one 150 metre bridge in the whole stretch. Even the Tanzanian line will have fewer bridges of the same magnitude.
Bridges form the largest Costs centre absorbing 35% of costs

The Paper demonstrates that the Naivasha- Kisumu section of the Kenyan SGR will cost an estimated US$13 million per Kilometer because of the many super bridges to be construction on this section which traverses the rugged Rift valley.

The document, seen by this publication also defines the key factors in the decision to invest in a modern railway line.  
Top on the agenda is savings in transit time, robustness, reliability, and maintenance costs in that order.
The paper, an analysis of the SGR projects in East Africa, demonstrates why the central Corridor is not an option for Uganda. It demonstrates that the Central line is three days slower than the Northern Corridor even if they are built of the same standard. Dar-Es-Salaam port is 1548 Km away from Kampala compared to Mombasa port, which is 1250 km away.

Of the 1548 Km, 1228Km are on land and 320Km are on water- across Lake Victoria. This in itself calls for investment in sea-going vessels and improvement of the Ports in both Mwanza in Tanzania and Port bell in Uganda.

Even with these investments, the document demonstrates, the Tanzanian route in not an option for Uganda whose ambition is to be a middle income country with a GDP per capita of $9500 a year by 2040.
 To get there, Uganda needs to attract investment into heavy industry producing “for high-end markets in Europe, North America, Asia and other developed countries.” Consequently it needs fast, reliable, robust and efficient transport system.
Embankments are the second costs centre absorbing 25%
 In terms of robustness of the line, the paper demonstrates that the Northern corridor SGR, which is Class One Chinese standard, has a capacity of transporting more than 8000 containers per day in 40 trains each carrying 216 containers. The Tanzania route on the other hand, is restricted to 216 containers due to vessel restrictions.

 It will take 5 ferries to carry the 216 containers on the 320 km trip across Lake Victoria. Each ferry has a capacity of 44 containers. To off load and load and transport the 216 containers across the Lake will take an additional 15 hours, says the paper.

This will raise the total transit time on the Tanzanian route to more than 72 hours. And, the report adds a caveat, “that is being optimistic.”  To the contrary, the Kenyan route will take 24 hours to transport freight from Mombasa to Kampala, it says.

Comparing the Ports capacity, the paper says that the Mombasa port is three times bigger than the Port of Dar-Es-salaam. The paper, though, was published before Tanzania inked the deal to expand the Dar- port.

The paper says that the central corridor is not popular with Ugandans who transport only 0.5 million tons of freight per year compared to the Northern Corridor which ships more than 10 million tones a freight a year.

In terms of reliability, the paper tears apart the Tanzanian and Ethiopian lines. Both are low quality compared to the Northern Corridor SGR. The Ethiopian line is Class 2 Chinese standard while Tanzania opted for AREMA (American Railways Maintenance Association) standard. Both are designed to carry a maximum of 20 million tons a year. The Northern corridor -which traverses Kenya-is designed to ship up to 35 million tons a year.

 The implication here, says the paper, is that should demand for railway services rise in both Tanzania and Ethiopia, they will have to build additional lines to meet demand.  The Northern Corridor line, is sufficiently robust to accommodate future demand increases.

The paper advises that for projects designed to last 100 years, the initial sunk capital should not inform the decision to invest. It argues that the life time maintenance cost of a project should inform the decision. In the case of SGR says the paper, the Maintenance cost for the Class one line are lower than the other two

Tuesday, 25 July 2017

Is Al-shabaab planning to determine who wins in Kenya 2017?


 There is a surge in the frequency and intensity of terror attacks on Kenyan Soil. In an- 8 – week period  up to Mid-July, there were 15 terror incidents in Northern Kenya towns and Lamu county at the coast,  a majority of which involved blasts caused by IEDs. 

The Mangled wreckage of an APC hit by Al-shabaab AIED
This is in sharp contrast to the situation between January and April this year, when only one or two incidents were reported per month in Wajir County, says Kenya’s stability and Risk Report for July this year.
The 15 incidents cost 55 lives a majority of them Security agents. Forty security agents including Policemen and Soldiers. The rest were civilians including four school children, nine adults beheaded and a relative of a Permanent Secretary who was killed as the terrorists abducted the PS. She was later rescued by the security forces.

Out of the 15 incidents, thirteen involved IED blasts targeting the security agents. The death toll from the incidents is also a sharp 690 percent rise from the situation in January to April when one death or none at all were recorded per incident. The current spate of attack averages 7 deaths per week.
All security officers were killed by IEDs. This is a worrying trend for targeting security agents destroys their vehicles thus slowing down police response time. It also instills fear on the officers, again slowing down their response time.

Aftermath of Mpeketoni attack in 2016

The 1500 Percent surge in terror activity coincided with the beginning of the Muslim holy month of Ramadhan during which terror activity increases. However, MEARisk warns that this could this be a precursor to bigger attacks.  The slaughter of nine villagers on July 8th, the first of its kind on Kenyan soil, but a common occurrence in Somalia, marked the acceleration of militant cruelty to a new high.

The report says that in April, the Kenya Defense Forces operating under AMISOM in Somalia killed 76 Al-shabaab operatives in Gedo region of Somalia. Before then, in March KDF had killed another 57 militants. Other attacks have also been reported in the Somali media where KDF has killed tens of militants.
So the killing of the 40 officers could easily be dismissed as revenge for Kenyan killings of Al- shabaab militants.
However, there is more to it than just revenge. It will be recalled than in 2013, Al- shabaab militants struck at Nairobi’s Westgate Mall killing 62 people. In 2015, Al-shabaab struck again, killing 148 students of the Garissa university college.
 In June 2014, Al- shabaab struck in Mpeketoni in Lamu County, killing 100 people.  In between 28 bus passengers, most of them teachers and nurses were killed in al-Shabaab attacks in Wajir. Quarry workers were also targeted.
 In February 2016, Al- shabaab attacked a Kenyan military base in El- Adde Somalia, killing an estimated 180 soldiers.
These events may appear unrelated, except that they had one common thread, they were designed to disillusion Kenyans at home to force them to demand the withdrawal of Kenyan forces from Somalia.  The government, for its part, has been firm that they will not be withdrawn.
If the earlier attacks had a political agenda, then they failed because Kenyan troops are still in Somalia thumping Al-shabaab at will.
The surge in terror activity so close to the elections in August 2017 could be a pointer to a political agenda. It could signal Al- shabaab’s desire to influence the forth coming elections in Kenya slated for August 8th, 2017. It could determine the winner!
 In 2014, Al-shabaab hit Mpeketoni just a day before the launch of the” Infamous US$2 billion” sovereign bond. Analysts then saw the attack as an attempt to sabotage the bond. That attempt failed as the bond was oversubscribed by 400 per cent.
 Can similar attacks be shrugged off this time around? This is an election year and Al-shabaab could be working to demoralize voters or to incite them to change the regime. Terrorists are known to influence an election through a surge in terror activities, says the MEARisk report.
Unlike 2013 and 2014, the security forces in Kenya have gained a lot of knowledge about the terror group. They have learnt to work jointly- sharing information and experiences.  This is one of the reasons Nairobi has become safe from Al- shabaab threat. However, this being an election year, Al- shabaab could try to be more cruel and daring.
 Perhaps attacking a crowded campaign rally in Kenya. Terror groups always do that. For instance, early in this decade, the Spanish rebel group, ETA, bombed a Railway station just a day before an election. The incumbent Prime Minister lost the election.

 If a crowded political rally is hit so close to the election, Voters would blame the government for failure to protect them, warns the report, and vote it out.

Monday, 10 July 2017

The Nairobi-Mombasa highway to be a toll road

Snarl-up at Kibarani Mombasa: 
Traffic jams begin at the Island.
The expanded Nairobi- Mombasa Highway will be a toll road, we can report. The highway will cost a whopping US$2.2 billion (Kshs230 billion at current exchange rates) which, according to the feasibility study, will be recouped in 25 years.

This is one of the five major highways slated for tolling. Others are: the Nairobi- Nakuru- Mau summit road; the second Nyali Bridge; the Thika- Nairobi road and the Southern By-pass also in Nairobi.

The implementation of the projects under PPP model means the projects will be undertaken by the private sector who will recover their investment in the course of the life of the projects.

Currently, transport cost accounts for around 30% of the cost of goods and services across the region due to poor infrastructure and the thousands of man-hours lost in traffic daily. These projects will, to a large extend, cut down costs for motorists in terms of fuel savings, lost man hours and vehicle maintenance costs.

The 485km highway will according to government sources, be expanded into a six lane highway from Mombasa to Nairobi.

It is expected to ease traffic snarl ups at the highway which is a critical artery for trade in the region for, it connects the Mombasa port to hinterland including Uganda, Rwanda and Burundi.

It has remained a single-carriage way for long despite increased traffic of buses and trucks ferrying goods and people daily. To enhance its effectiveness, the Nairobi-Nakuru-Mau Summit road is also slated for expansion.

 The government of Kenya is negotiating with the US export-import (Exim) bank for the financing of the multibillion-shilling project and expects to close the deal soon.

“We expect and hope that we are going to start the construction of this road in the next one year once we complete the talks,” said Peter Mundinia, the Director General, Kenha. “This is a major road that requires upgrading to curb the frequent traffic snarl-ups,” he added.

Even then, works have already started at sections of the highway notorious for traffic jams. These sections include the Mombasa-Mariakani section and the Athi River-Machakos turn off along the busy road.
The Athi River-Machakos turn-off, a stretch of 20km will cost US$51.2m the project is being constructed by the China Railway 21st Bureau Group Company Limited.
 The 20km section will be made a ual carriage and will have two new bridges one measuring 98m for Mombasa bound traffic and another of 50m for traffic headed to Nairobi.
The Mombasa bound will be the longest bridge along the Northern Corridor.

The KeNHA expects the upgrade of the turnoff to be completed in 2018. 

Tuesday, 4 July 2017

Africa to launch single air transport market in 2018

Africa to launch single air transport market in 2018

Africa plans to have a single air transport market by 2018 , David Kajange, the Head of the Transport and Tourism Division at the African Union (AU) has announced.
Over 40 countries are expected to be signatories by then. So far, 20 African countries out of 55 have subscribed to the African single air market.
Mr Kajange,  was speaking during the ongoing 29th AU summit, which is underway in Ethiopia’s capital, Addis Ababa.
The single air transport market is one of the goals of AU’s Agenda 2063, aiming to connect Africa through aviation and other transport infrastructure to achieve integration and boost intra-Africa trade.
The single air transport market also aims to boost African nations’ tourism, economic growth and economic development.
“Africa became the most expensive air transport market in the world because of individual nations’ policies and regulations that hinder air connectivity,” said David Kajange.
According to Euroavia International, a firm specializing in consulting services for airports and aviation industry, air transport in Africa is on average twice as expensive as the world average.
Since 1980s, an African Open Skies vision has been there, culminating in the adoption of the Yamassoukro Decision of African Heads of States of November 14, 1999.
Between 2004 and 2014, an increasing business and tourism sector and growing middle class, the market share of African airlines has dropped dramatically despite sustained economic growth on the continent.The loss of market share by African airlines has been estimated by the AU to have been from 60% to below 2%.
Meanwhile the AU is mediating to resolve potential electoral disputes in the Democratic Republic of Congo (DR Congo) and Gabon. Minata Samate Cessouma, Commissioner for Political Affairs at the AU, said that, resolving electoral disputes is at the heart of ensuring welfare of the continent’s youth.
 From Construction Review

Sunday, 18 June 2017

The Central Corridor is no Option for Uganda


Ugandan Line designed  for Double tack wagons
 Tanzania’s efforts to woo Uganda to abandon its Railways link through Kenya in favour of the Central Corridor have come to naught, we can report.
A paper by the Uganda Ministry of Works and Transport has dismissed the route as a low priority route for Uganda.

The document, seen by this publication also defines the key factors in the decision to invest in a modern railway line.

Top on the agenda is savings in transit time, robustness, reliability, and maintenance costs in that order.  In all these variables the central Corridor -which traverses Tanzania- scored poorly, making it a no option for Uganda.


The paper, an analysis of the SGR projects in East Africa, demonstrates why the central Corridor is not an option for Uganda. It demonstrates that the Central line is three days slower than the Northern Corridor even if they are built of the same standard. Dar-Es-Salaam port is 1548 Km away from Kampala compared to Mombasa port which is 1250 km away.
This is an expensive but reliable model

Of the 1548 Km, 1228Km are on land and 320Km are on water- across Lake Victoria. This in itself calls for investment in sea-going vessels and improvement of the Ports in both Mwanza in Tanzania and Port bell in Uganda.

Even with these investments, the document demonstrates, the Tanzanian route in not an option for Uganda whose ambition is to be a middle income country with a GDP per capita of $9500 a year by 2040.

To get there, Uganda needs to attract investment into heavy industry producing “for high-end markets in Europe, North America, Asia and other developed countries.” Consequently it needs fast, reliable, robust and efficient transport system

 In terms of robustness of the line, the paper demonstrates that the Northern corridor SGR, which is Class One Chinese standard, has a capacity of transporting more than 8000 containers per day in 40 trains each carrying 216 containers. The Tanzania route on the other hand, is restricted to 216 containers due to vessel restrictions.

 It will take 5 ferries to carry the 216 containers on  the 320 km trip across Lake Victoria. Each ferry has a capacity of 44 containers. To off load and load and transport the 216 containers across the Lake will take an additional 15 hours, says the paper.

This will raise the total transit time on the Tanzanian route to more than 72 hours. And the report adds a caveat, “that is being optimistic.”  To the contrary, the Kenyan route will take 24 hours to transport freight from Mombasa to Kampala, it says.

Comparing the Ports capacity, the paper says that the Mombasa port is three times bigger than the Port of Dar-Es-salaam. The paper, though, was published before Tanzania inked the deal to expand the Dar- port.

The paper says that the central corridor is not popular with Ugandans who transport only 0.5 million tons of freight per year compared to the Northern Corridor which ships more than 10 million tones a freight a year.

 It questions Tanzania’s contracting mode which, it says, places a lot of risk on the employer- in this case the Tanzania government. The Model- Design and Build- is fraught with risks due to potential for design and construction errors that could impact negatively on train operations. 

The Ugandan Model is ECP/Turnkey which places all design and engineering risks on the contractor. Here the Contractor purchases the Materials and Equipment including Locomotives and Commission’s them.

In terms of reliability, the paper tears apart the Tanzanian and Ethiopian lines. Both are low quality compared to the Northern Corridor SGR. The Ethiopian line is Class 2 Chinese standard while Tanzania opted for AREMA standard. Both are designed to carry a maximum of 20 million tons a year. The Northern corridor -which traverses Kenya-is designed to ship up to 35 million tons a year.

 The implication here, says the paper, is that should demand for railway services rise in both Tanzania and Ethiopia, they will have to build additional lines to meet demand.  The Northern Corridor line, is sufficiently robust to accommodate future demand increases.

The paper advises that for projects designed to last 100 years, the initial sunk capital should not inform the decision to invest. It argues that the life time maintenance cost of a project should inform the decision. In the case of SGR says the paper, the Maintenance cost for the Class one line are lower than the other two.


Wednesday, 24 May 2017

EPAs: Why Kenya's trade with EU will not suffer

Kenyatta: Kenya signed and Ratified EPAs
 Contrary to popular opinion, Kenya's trade with EU is unlikely to suffer any loss should Tanzania and her minions refuse to sign Economic Partnership Agreement. In fact Kenya and Rwanda could gain from this reluctance.
The European Union has stonewalled a fishing expedition by EAC to delay the signing of the Economic Partnership Agreement.  The Union has rejected any discussion on “sanctions in Burundi until the political situation improves.” This is a sign that the EU is losing patience with the laggards.

The reluctance by three EAC member states, led by Tanzania, to pen the Free Trade Area deal with the European Union has turned into a fishing expedition.

A fishing expedition is a situation where one  begins to look for wild reasons to justify a wrong decision. 
Kagame: Rwanda signed and ratified EPAs
 Initially, Tanzania, which has refused to sign the deal twice-in 2014 and 2016- argued that the deal with stymie her industrial growth. Then termed it “colonial” before “ducking off the radar to hoist “sanctions against Burundi.”

 In the last Heads of States Summit held in Dar-Es-salaam last Sunday, Tanzania’s worry about the threat to industrialization simply disappeared and was replace by “sanctions against Burundi.”

This amounts to introduction of red herrings to delay commitment to EPAs. 

The reasons are not hard to find; Uganda, Tanzania and Burundi are classified as Least Developed Countries, LDCs. These countries were handed a lifeline to trade with European Union under an arrangement called Everything But Arms, EBAs which enables them to export to European Union duty-free and quota-free. 

Only Kenya is classified as a developed country which does not qualify for EBAs. Kenya is therefore the greatest beneficiary of EPAs, which  grants her the same benefits as EBAs.

Second, a look at the trade data is also telling. Kenya dominates exports to the European Union. For example in 2016, the whole region, that is EAC, earned 2,443 billion Euros worth of exports. Of these Kenya pocketed 1,280 billion Euros. That is 52.4 per cent of the total exports. Tanzania was a distant second, earning Euros 632 Million accounting for 26 per cent of the total while Uganda earned Euros 443 million accounting for 18 per cent of the total earnings. Rwanda earned the rest, that is, Euros 88 million.

 Analysts fear that the growing European Union impatience with EAC could soon result in the withdrawal of EBAs, which is simply an arrangement born out of EU generosity. If tossed out of the window, both Uganda and Tanzania will be locked out of the EU market with dire consequences to employment at home.

 Tanzanian exports to EU are dominated by the beverages and Tobacco category which accounts for 31.8 per cent earning a cool Euros 201 million in 2016, food and live animals was second accounting for 31.1 per cent earning Euros 197 million.

These basic agricultural commodities are the largest employers in all developing countries. Any disruption of their trade has dire consequences to poverty alleviation and employment.

Unlike Kenya and Rwanda which have already signed and ratified the deal,Tanzania and” her friends” do not have a fall back option should Europe play hard ball. Kenya and Rwanda can now opt to use “variable geometry” which  grants them the right to go ahead and single-handedly pursue trade deals meant for the bloc.

 Since the European Union has rejected the introduction of the Burundi sanctions into EPAs agenda, the two signatories are likely to  pursue their agenda, That means that , contrary to what many say, Kenya and Rwanda 's trade with the EU is unlikely to suffer should the push come to shove.

The trade data exposes Tanzania’s fear of a threat to her industrialization agenda as hollow. Her imports from EU are dominated by machinery and chemical imports which account for 67 per cent of the total imports. While her exports of manufactured goods, largely mineral exports, accounted for 18 per cent of the total.

Such facts must have emerged during the “encouragement sessions” that we reported about last week. This is why Tanzania ducked out of radar, hoisting Burundi sanctions instead.



Thursday, 18 May 2017

EPAs: Why we expect Tanzania to change heart

Presidents Kenyatta of Kenya and JMagufuli of Tanzania:
Working at Cross Purposes on EPAs

ACCORDING  to press reports, the European Union has announced that it is “encouraging” Tanzania to sign the much maligned Economic Partnership Agreements, EPAs.

Tanzania is being “encouraged” because she has been a reluctant bride in the proposed marriage even terming it “colonial.”

Experts in Diplomatese, the language used by diplomats, say that the word “encouraging” hides the real show. The meetings to encourage one to take certain desired action are bare knuckled events where all deck s are laid on the table. And they leave no doubt at all about the potential dangers of not taking the action. Even the public pronouncement by the EU diplomats, say diplomatic experts, is an ominous warning that Tanzania is expected to behave.

That is why the experts expect a Tanzanian about- turn on EPAs. The country is reluctant to sign the dotted lines saying that EPAs are a threat to her industrialization goals. But since she has been “encouraged,” experts expect a change of heart in the near future.

 Tanzania is in a weak position, the major reason for her reluctance to sign the deal is to protect her tax revenue base. For this reason she prefers to be an LDC riding on the generosity of the EU. She exports to the EU market under a preferential arrangement called Everything But Arms, EBAs. However, this is an arrangement tossed to the Least Developed Countries by the EU owing to her generosity.It can be withdrawn without much ado.

 Secondly, Tanzania no longer qualifies for such handouts. The country is no longer an LDC given that its economy posted robust growth for a decade raising its per capita income from a measly $350 in the early 2000s to $950 in 2015.  In fact she may have hit the lower echelons of a middle income country by now.

 Kenya was considered a developed country when its GDP per capita was $600. This means that Tanzania should long have been weaned out of EBAs. It seems like the bureaucrats in Europe have just “discovered” this fact and could soon become tightfisted.

That would leave Tanzania with no preferential arrangement to export to EU. Her exports would thus be locked out of the bloc. Can she afford such a risk?

To be fair  we should ask:  what is wrong with EPAs in Tanzania's eyes?

 An extensive review of Papers, presentations and commentaries revealed that the intense bashing EPAs has suffered in the hands of Tanzanian critics, is not wholly justified.

Contrary to critics view, the arrangement is not an imposition of the European will on poor and hapless African, Caribbean and Pacific group countries.

EPAs are negotiated agreements that are binding on both parties. It is an all-inclusive process where all stakeholders in a country or region are extensively consulted. Consequently, the agreements are the result of a transparent and inclusive process whose aim is to enhance economic development and poverty reduction in ACP countries.

Economic Partnership Agreements are an attempt to create a free trade Area (FTA) between the European Union and the ACP Countries. They grant exports from ACP countries duty-free and quota free-access to the European Union market in a secure, long-term and predictable manner.

 EAC member states initialed the framework for EPAs negotiations in November 2007. That initialization allowed the EAC members to continue exporting to the EU on preferential terms as they negotiated the EPAs.

 An evaluation of the impact of the initialed framework by the Uganda’s Ministry of Tourism Trade and Industry shows that; Uganda’s tariff free exports into EU have increased. It gleefully reported that Uganda can now export meat and other livestock products tariff free. These products previously attracted taxes ranging from 9.6 Euro per 100kg to 176.8 Euro. “Now,” says the report, such products do “not attract any taxes when exported to the EU.”

The key feature of EPAs is reciprocity. This is to say that, EU exports into ACP group should also be granted duty free access into ACP group markets, including into EAC states. This is why Critics fear that EPAs are being used to open the ACP group markets to European products.

Far from it, EPAs are based on the principle of asymmetry which calls for a phased out removal of all trade barriers established between the EU and the ACP countries since 1975. The phase-down period is 25 years from the date the EPAs are signed.

Before the entry of EPAs, trade relationship between EU and ACP group were governed by the Cotonou agreement. This trade regime, which expired on December 31, 2007, allowed ACP group exports into the EU market duty free. Its expiry without an alternative arrangement would have closed the EU market for ACP- and especially EAC -exports.

And Uganda would not have diversified her exports to the EU to include” meat and other livestock products.”

 Cotonou was discriminatory in that, while EU exports were charged duty in the ACP group markets, the latter exported tariff free.  This arrangement contravened the WTO rules. Therefore it was illegal in the eyes of WTO members who vigorously protested against such discrimination.

EPAs were thus initiated in order to comply with the WTO rules which bar non-reciprocal and discriminating preferential trade Agreements. They were also designed to keep the EU markets open for ACP countries on preferential terms.

The market would have been lost if EU fully complied with WTO rules of taxing all imports into its market. This would have been a major blow to the economies of ACP countries, including East Africa.

The EU market absorbs more than 20 percent of East Africa’s exports, making it the largest trading partner. This is the size of market the expiry of Cotonou agreement would have blocked. And the effects in terms of foreign exchange generation and employment in the East Africa would have been devastating.

In addition to allowing duty-free and Quota free exports to EU, the agreements also encourages the creation of regional free trade areas within the ACP. Such regional blocs, RTAs, among them EA Common Market,  to liberalize trade among them thus creating a large market for their weak industries.

Regional trading blocs also synchronise their economic policies and structures so that investment in the blocs becomes predictable. In effect EPAs will also increase trade and economic co-operation within ACP group.

The 120 million people -five Country, East African Community, EAC, is one such Regional trading bloc. It has witnessed increased trade between the countries. Some reports indicate that such trade has yet to reach full potential meaning that the regional has room to expand its trade with itself and reap the full benefits.

In the frame work, East Africa has offered to liberalize 82% of imports from the EU over a twenty five (25) year period. Initially, it was to grant duty free access to 64% of exports in 2010; 16% between 2015– 2023; and 2% between 2020 –2033 if the agreement was signed before 2010.   

This has been the bone of contention with critics accusing the EU of plotting to kill the ACP economies by flooding them with EU’s products.

 However, the Ugandan evaluation  among other sources indicates that a large proportion of 64 per cent that is offered initially is already liberalized by EAC’s common External tariff, CET. These imports fall into the category of raw materials and Capital goods, which are zero rated in the East Africa Community.

The paper indicates that the local business community is the beneficiary for it imports either raw materials or Capital goods as inputs for their production process. That they are tax-free means that the business community’s financial burden has been reduced.

In addition, nearly one fifth of EAC products will never be liberalised forever. This is because they are critical to basic survival in the region. Some of the products on the Sensitive Products list include: live animals; meat and edible meat offal; fish and other marine products; dairy produce; natural honey; cut flowers and ornamental foliage; edible fruit and nuts; peel of citrus fruits or melons; coffee, tea and cereals among others.

 To ensure that ACP countries do not negotiate away family jewels, EPAs have a rendezvous clause which allows countries to refuse to negotiate certain aspects of EPAs until they understood them.