East Africa Economic Report

Design plan of JKIA Green Field  In Nairobi, Kenya IT IS THAT TIME of the year when we take stock of the past year. We review how much progress we made in economic development in east Africa. The region has enjoyed robust economic growth for much of the last decade which robustness has spilled into the current decade. Rather, bottlenecks defined by the robustness of the last decade are being removed in this one. Chief among all bottlenecks was infrastructure -roads, railway lines, hydro dams, geothermal wells, sea ports and airports. There is a reason to focus on infrastructure:  Fossil fuels have been discovered in the top three of the five east common market countries. Consequently demand for infrastructure to service this new economic factor has shot up. Some mega projects, which just a few years ago would have been quietly dismissed as pipe dreams are becoming reality.  Tanzania is so far the leader in discovery of fossil fuel with confirmed 40trillion Cu...

Dar-Es salaam Port:Where the central  Corridor beings and Ends THE PURPORTED rivalry between Tanzania and Kenya on matters of infrastructure development is hot hair, say experts. The time to invest in the central corridor is now. And Tanzania need not feel guilty of seeking investment partners on the corridor.  There is nothing new in Tanzania entering into joint investment projects. She has done the Arusha-Namanga-Athi-river road with Kenya and is also doing the –Voi-Taveta-Holili – Moshi road jointly with Kenya. Therefore the notion that Tanzania is investing on this corridor to spite Kenya is dumb, say experts in Nairobi. A substantial stretch of the Central corridor traverses Tanzania. Therefore it is in the country’s interest to connect unlinked regions for trade and development.  It is also in the country’s interest and those of her neighbours to extend the central corridor to her neighbours since by definition, the corridor ends and starts at the Da...

AFTER SEVERAL postponements, Kenya’s President, Uhuru Kenyatta will preside over the ground breaking ceremony for Nairobi’s green field terminal at JKIA, to day, December 3 rd .  The US$ 653 million terminal has been has been on the balance for a while due to financial considerations. The terminal will be developed on a design, build, finance, operate and transfer (DBFOT) basis. It will not get any guarantees from the Kenya government. Consequently, financiers were slow footed in taking the risk. The terminal will be guaranteed entirely by the strength of the balance sheet of Kenya Airports Authority, the agency that owns airports in Kenya. However, the authority will now foot 15 per cent of the costs. The agency increased the airport tax to $40 for departing passengers since last year. By now,it has accumulated a tidy sum that it is using to begin construction work at the terminal, said Engineer Joseph Kamau, the Cabinet Secretary in charge of transport. All necessar...

David Cameron The UK PM:  Misreading the signs? CONNECT THE DOTS and tell me what picture emerges. In the last four Months a flurry of events, have happened in Kenya. In early September Nigeria was given 46 oil exploration blocks in Kenya. In October, Tullow Oil, the British owned oil exploration firm that has been active in Kenya, discovering commercially viable wells almost on a monthly basis, ran into trouble with the local community. In November, Kenya’s President attends the Africa-Arab summit in Kuwait. Here the President Called on Arab-Oil Producers to help Kenya exploit her oil and LNG discoveries. Read anything? I read a warning shot to the west.  Kenya has grown horns and is poking the soft belly of those not taking note. “Choices have consequences,” so said the Former US assistant Secretary of State, Johnny Carlson, as he appeared to warn Kenyans against voting in the Jubilee Alliance. It seems now the same logic is being applied on the West by Kenya. And t...

The 6000 MW Grand Renaissance Dam  WHEN THE NEWS broke out that Kenya has struck a deal to import 400MW of electricity from Ethiopia, a common question arose: Does Ethiopia have the capacity? Is Kenya wasting good money chasing for bad?  That was slightly over a year ago. Now I know better. I have been disabused of my ignorance. Ethiopia not only has the capacity but the potential to supply the entire east African region with electricity. She is a sleeping electric energy giant-a country with a capacity to supply 67 per cent of Africa’s current population. Ethiopia, which is emerging from years of communist rule and wars, is not only a champion on track races where her athletes give Kenyans a run for their money; she is a star performer in other areas: Her economy has been growing at an average 8 per cent rate for more than a decade.  Consequently, the country of 90 million people has seen demand for electricity grows by 32 per cent a year. This means tha...

JUST HOW MANY active Al-shabaab operatives are remaining in Somalia? Or just how many are left in the world?  Reports from the front line indicate that the ragtag army of social misfits may have been obliterated in the last one week. The operation  led by the Kenya Defense Forces (KDF) under AMISOM,  targeted  Al Shabaab training camps and its senior commanders in the tri-border area between Middle Juba, Lower Shabelle and Bay region.  Two senior commanders were killed by a KDF drone at jillib on Sunday, October 26 th , the day the operations were launched. A few days later, the Kenya Air force bombarded hurguun training camp in Dinsoor region. The camp is said to host 400 people 300 of who are trainees. An estimated 300 people were killed. Intelligence reports indicate that the dead were buried in mass graves on Friday, November 1 st , a day after the attack. The same day, October jillib was again attacked by ground troops using heavy artillery. The si...

    Hardly a month since they raided the WestGate Mall in Nairobi,the Kenya defense forces have attacked and wrecked an al-shabaab training camp in Somalia. KDF have confirmed that the "courtesy call was successful."  However, It is not clear who else was involved. intelligence sources have hailed the attack as pay back time. Two days ago, intelligence reports say, two senior commanders were killed in a drone attack in Baraawe in South Somalia. Among the dead was a commander named Anta, a Bomb expert. Kenya Defense forces were also reported to have assaulted an al-shabaab camp in “Jillip deep in South Somalia.” And now as we write, the same sources report that a training camp in South Somalia is under drone attack. An intelligence source in London is quoted as reporting heavy Bombardment at a camp Known as Hurguun 30 Km from Dinsoor. There are reports of continuous bombardment of the camp which is characteristic of Military jets, rather than drones. The number ...

Ashegoda windfarm: The largest wind project in Africa ETHIOPIA HAS JUST commissioned a 120MW wind power farm, the largest operating wind power farm in sub-Saharan Africa so far. This brings to 170MW the quantity of Ethiopia’s electricity produced by wind power. In the process, Ethiopia has now become the leader in wind power generation in Africa beating Kenya, to a poor second- at least for the time being.  Kenya has very ambitious plans, including being home to Africa’s largest wind power project, the Lake Turkana Wind power Project, which is just crawling off the ground.  Other projects include the proposed 100MW Kipeto Energy sponsored by the American multinational GE in the Ngong area at a cost of US$ 300 million; Aeolus (Kinangop and Ngong Hills) and Isiolo Wind farm.  The Ashegoda project in Ethiopia cost US$ 290 million was built by French firm Vergnet SA was funded by concessional loans from BNP Paribas and the French Development Agency (AFD). T...

AS NEW OIL discoveries are made almost on a monthly basis, it is time to face hard questions and seek answers. Among these are question as whither oil supply in the next decade and beyond? Whither the price? Who will be the losers and who shall be the winners? What impact on world economic growth? Specifically will Africa gain or lose? Transport and energy Infrastructure  are what Africa need to trade with itsel f Africa, which is likely to be fastest growing region in the next five years, stands at the threshold of rapid balanced, all inclusive development, experts say. Although some countries could suffer temporary setbacks due to revenue declines, continent is well poised to maintain its development thrust. This is because some of the fastest growing countries in the continent are just now discovering Fossil fuels such as oil and LNG.  They have not even sold a single barrel and have thus not tasted oil money. To these countries energy prices are the bottle n...

FOUR MONTHS AGO, when the African Union raised issues with the ICC, we asked whether Africa’s assertiveness can be ignored http://eaers.blogspot.com/2013/05/assertive-africa-can-it-be-ignored.html .   At that time we focused on economic causes for Africa’s confidence saying the world must take note. Bujagali Hydro project in Uganda: We ended our analysis with the question; who shall blink first, Africa or the West?   Following last week’s no nonsense AU summit where Africa gave the UNSC an ultimatum, the West has blinked first. Now western Diplomats are said to be drafting a resolution to be adopted by the UNSC adjourning the ICC trial of President Uhuru Kenyatta and His deputy William Ruto for a year, subject to extension.  In our analysis mentioned earlier, we advised the west to respect Africa’s new found boldness.   It seems like the west has finally realized that Africa has come of age and will brook no nonsense. It should brace for more of Afr...

  WE ALL KNOW that the informal sector is the leading employer in Kenya. Official data shows that in 2011, the formal sector employed 2.123 million people while the informal sector employed 9.9 million Kenyans. This leads to the question: where do these people live? A majority lives in informal urban settlements, popularly known as slums. Much of what we hear about slums is squalor and debauchery.  A section Of Kibera: The slum has more TVs than the affluent neighbourhoods True, there is poverty, moral decadence and dirt: There are no flash toilets in the slums, nor is there running water and plush homes. But slums are bustling with entreprenuers. Thanks to robust economic growth in Kenya, slums are turning into beacons of enterprise rather than by-words for squalor, Poverty, crime, debauchery. A one week survey by this publication established that slum dwellers are an enterprising lot. Many earn more per day than their peers in the formal sector employment. Perha...