East Africa Economic Report

Samia Suluhu Hassan: Tanzania's President Tanzania’s new president, Samia Suluhu Hassan, celebrated her 100 days in office last week. And this Publication, faithful to our tradition of not rushing to comment on issues welcomes her to the hot seat.  Her middle name in Kiswahili means a solution. So has she been the solution or the problem? Will she be the solution?   The seat she occupies is very hot. She inherits a country that was a pariah in many critical ways owing to her predecessor’s abrasive and isolationist management style.   Her predecessor, John Magufuli, “the bulldozer.” had little respect for Science and due process. It was his way or the highway and that cost him his life. He rattled everyone from Civil Servants, Politicians, to investors to his neighbors.  I must confess that this publication was no fun of him. We are the only publication that branded him “Tanzania’s major risk factor.” Please Read   http://eaers.blogspot.com/2017/02/president...

Lamu Port: Kenya's Brand new Port Reading the persistent criticism of Kenya’s development path, one could be forgiven for thinking that Kenyans elected a government of corrupt fools. The country has developed some mega infrastructure projects in the last 20 years. A large number of them are complete and operational. A large number of others are still under construction. Yet “outcry” about the projects persists. The cacophony of noise is confusing: the cost is bloated, the implementation is slow; it is not the right standard; its build on expensive Chinese loans by expensive Chinese contractors. On completion, the issues turn to the viability of the projects. The protestors embrace conspiracy theories and propagate falsehoods clothed in inept comparisons – comparing Apples with Oranges-so to speak. They ignore the simple economics truth that, price is determined by factors that vary from product to product. They also ignore facts on the ground. Consequently, the protests can be...

Geothermal is now the lead electricity Source in Kenya   You may say $101 billion according to recent estimates by Bretton woods institutions and Africa Development Bank. You won’t be wrong. You could also be wrong. These institutions calculate their estimates based on the country’s recorded GDP figures. And those figures depend on the base year which could be.. well, outdated. Here’s why: There is an animal Economists- and I believe Statisticians too- call rebasing the accounting base year which captures the true size of the economy.    Rebasing is updating the base year to a new year so that the accounting of GDP is updated. Rebasing, therefore, means selecting a new base year.   You see, the economy is not static. It is dynamic. It therefore grows and expands over a period of time. The expansion includes new economic activities that were initially insignificant, but have become significant contributors. It also includes new developments that did not exist prev...

The Southern Bypass in Nairobi.  Completed in 2015 Kenyan anti-debt warriors rattled the IMF last week with their protest over a US$2.35 billion loan to the  country. The three-year program, to be released in tranches, will cushion the country as it grapples with the crisis induced by COVID-19. These include reduction of debt vulnerabilities, that is, to ensure Kenya does not default on previous loans among others. The pandemic and its effects are a global reality and containment measures resulted in a self-inflicted economic pain, not just in Kenya, but globally. Some sectors such as air travel ground to a halt, the hospitality and entertainment industry simply collapsed, while others cut down operations. All measures resulted in a huge threat to employment with retrenchments and furloughs. Air travel may never recover to its pre-pandemic levels due to the growing adoption of digital conferencing. In effect, the economic downturn is no fault of our own. Tax revenues dec...

A new Highway  A Review of a number of reports published here gives a cause to cheer East Africa’s investment strategy. The region has focused heavily on developing transport and energy infrastructure to create an enabling environment for future economic growth.  By 2018, billions of US dollars had been sunk into infrastructure - Roads, Railways, Airports, Seaports, and electricity generation. Consequently, the stock of roads has increased to hundreds of thousands of Kilometers from tens of thousands in the 1990s; paved roads have risen from a few thousands to tens of thousands of Kilometers. We are seeing expressways, elevated roads, and interchanges. Power generation capacity has expanded as has the sources and for the first time, some countries are self-sufficient in green power capacity. Power is being generated from wind, Solar, and Geothermal sources in addition to the traditional Hydro sources. As the stock of enabling infrastructure is increasing, East Afric...

Magufuli: "RemarkablyTrumpian" These are headlines from Tanzania in the first week of February: “ Zanzibar VP Seif Hamad says in  hospital after Covid-19 diagnosis, Tanzania embarks on steam therapy to fight coronavirus, Tanzanians urged to use traditional medicine for Covid-19,” and they debunk the myth of a Corona free- Lockdown- free- mask –free Utopia . Instead, these are signals to a country deep in trouble and desperate for a false solution. The last two headlines are an inadvertent admission that Coronavirus is real in Tanzania.   It is ravaging the country, anecdotal evidence suggests. This reality is a slap in the face for President Magufuli who downplayed the virus and its control protocols. He must now confront the consequences of his miscalculation. President Magufuli, described by the US publication, The Daily Beast, as “remarkably Trumpian,” downplayed the pandemic citing economic reasons. Now he is opposing the vaccines to cover the economic consequences...

Ouarzazate Power plant Morocco: The tallest  power tower in the world Africa is ramping up its war against energy poverty, we can report. It has deployed some 10.5 GW of wind and solar power in less than 20 years. Much more is in the Pipeline and by 2030, the continent will have installed at least 100GW of green energy. Africa is easily the powerhouse in renewables. According to data from the African Deve lopment Bank, the continent has the potential to generate 10 Terra Watts(TW) from solar energy, 350 Gigawatts from hydro, 110 Gigawatts from Wind and 15 Gigawatts from Geothermal sources. Already some 10.5 GW of both Solar and Wind power, have been installed in the five leading energy markets. The five are; South Africa, Morocco, Egypt, Ethiopia, and Kenya.  Available data shows that Egypt is the leader with 3.5 GW of wind power and 1.5 GW of Solar in place. Morocco is second with 1.2 GW of wind power and 700MW of solar. However, new plants launched during 2020 are expected...