East Africa Economic Report

This is not how to lower cost of living There is a justifiable outcry over the high cost of living, not just in Kenya, but globally. Everywhere the shoe is pinching.   Have our feet grown bigger or has the shoe tightened? Whatever the case, the shoe is pinching. When did it begin to pinch and why?  Let’s begin with when?  A little recent history is a good starting point: Back in 2020, a nasty epidemic hit the world. It was vicious, spreading fast, and claiming lives faster than wars. It was the COVID-19 epidemic.  To check its spread and protect their people, countries instituted lockdowns that lasted for months.  The world economy was devastated!  Lockdowns meant joblessness, no money, and no tax revenue for governments. Towards the end of 2020, the lockdowns were lifted worldwide leading to massive supply chain bottlenecks because of excess demand for goods and inputs.  And, before the world handled that shock successfully, Russia invaded Ukraine in a war that still rages on.

By The Conversation In December 2018, a leaked letter from the Kenyan auditor-general’s office sparked a rumor that Kenya had staked its bustling Mombasa Port as collateral for the Chinese-financed Standard Gauge Railway. Our new research shows why the collateral rumour is wrong. The former auditor-general, Edward Ouko, was completing the 2017/18 audit of the national ports authority. He warned that the port authority’s assets – of which Mombasa Port is the most valuable – risked being taken over by China Eximbank if Kenya defaulted on the US$3.6 billion railway loans. The profitable Mombasa Port is East Africa’s main international trade gateway. Launched in 2017, the railway was intended to seamlessly link the port to Kenya’s capital, Nairobi, and landlocked countries beyond. The Kenyan fears mirrored another tale widely circulated earlier in 2018. In that story, China was said to have “seized” Hambantota Port in Sri Lanka when the island nation had trouble repaying Chinese lo

The new Railway hardware: Project inundated with graft claims  The Media in Africa is increasingly becoming the purveyor of falsehoods. It sees graft in every development project in Africa even without an iota of evidence.  Take for instance the Supreme Court of Kenya, SOCK, ruling two weeks ago that acquitted the Kenya Railways Corporation, KRC, of any wrongdoing in the procurement of the contract to construct the Standard Gauge Railway, SGR.  The Court ruled that the Corporation was implementing a directive of the Executive, which by Law, is allowed to initiate development projects in Kenya.  The Corporation did not initiate the project, and therefore, could be guilty of contravening either the procurement law or the Constitution of Kenya. This is another Landmark ruling by the SCOK. The Court found that the implementing agency, the Kenya Railways Corporation, was enforcing instructions by the Executive since the acquisition of the contract was a Government- to -Government deal.

When the bulldozers came calling Southend Mall in Nairobi On April 21, 2023, the Supreme Court of Kenya made a landmark ruling on land grabbing in the country. It ruled, “The doctrine of bona fide purchase for value does not apply where the root of the title to land is challenged.” That short sentence shattered an investor’s dream to own a prime beach property as its root was challenged. An 18 million shilling investment for a 1.2-acre beach plot evaporated. The ruling by the SCOK is now the law. Moreover, it has spooked land fraudsters. Previously, all a buyer needed was a title Deed to the land to claim legal ownership. Now the root of the title must be clean for the title deed to be valid. This ruling means that the responsibility to carry out due diligence in the purchase of land lies with the buyer. Shoddy research could bring the buyer to tears. Not only the investor but also financial institutions that could accept titles to such land as security for loans. They will be holding

Quality Roads: 60,00Km deficit The UN Economic Commission for Africa, UNECA, has just published a report on the effect of AfCFTA, on the transport sector. It says that the FTA will nearly double intra-Africa trade by 2030. This will raise demand for transport services by nearly 50 percent by 2030 resulting in new demand for transport equipment- Trucks, Wagons, Airplanes, and Marine Vessels.  In turn, the increased equipment will put pressure on the existing transport infrastructure- roads, Railroads, Airports, and Sea Ports. This demand spiral will cost US$571 billion to meet, says the report.  The report quantifies gaps in the sector that could stymie the FTA’s effect and the cost of meeting the new demand for transport infrastructure and equipment. Transport equipment will cost $411 billion while infrastructure will cost US$160 billion says the report. The bulk of the costs will fall on the private sector, that is, Truckers who will cough up S$345.5 billion for the more than two mi

 The Tanzania Railways Corporation is inching towards commissioning the Standard Gauge Railways in the near future. At the same time, it will decommission a lot of “fiction analysts and Writers” as the reality of the line hits home. In fact, the process has already begun.               Analysis of Hardware for each of the three lines Corporation Locomotives Coaches wagons Total ERC 41   1130 1171 KRC 57 40 1620 1717 TRC 17 80 1420 1517 The three top largest and most robust economies in East Africa will each have a Standard Gauge Railway line. There will be no room for fiction anymore. The narrative will shift to “what is,” from “what should be.”  We will be ticking the boxes on each line and comparing them. Two of the boxes can be checked already, the costs and quality of the lines, and the c