East Africa Economic Report

THREE YEARS AGO, South Sudan, then the world's youngest country, was born. It was a nation full of hope and whose prospects were bright. It had functioning oil fields which pumped 375,000 barrels per day, she also enjoyed the good will of the world. Everything was going for her. Investors trooped into the country seeking for opportunities. Soon, South Sudan was receiving proposals for such mega project as the US$3 billion Juba-Lamu oil pipeline.  All those prospects evaporated In December last year when a civil war broke out. The civil war pitted the government of President Salva Kiir against Rebels led by Riek Machar, his former vice president. Oil wells have been damaged while the meagre revenue from the little oil available is being squandered on war. A nation that sits on Sub-Saharan Africa's third biggest reserves of crude is now a beggar nation staring at a potential famine. Oil Output has declined to 165,000 bpd from 375,000 bpd before the war broke. With ...

A REPORT published by the Standard Bank of South Africa last month is dishonest.   The report , Understanding the African Middle Class should be renamed Distorting the African middle class. It proposes that, nearly two decades of economic growth in Africa has had little effect on poverty reduction.   This is the antithesis of the “Africa rising narrative,” whose thesis is that robust economic growth in the continent over the last two decades has reduced poverty and widened the middle income class. The Africa rising is an accepted narrative world- wide.  The Understanding ….Africa report  states that, of the approximately 110 million households studied across 11 countries, 94 million (or 86 per cent) of them were located in the low-income category, suggesting poverty levels are as much as two times the figures shown in official records. It defines Low-income people as those spending less than $5,500 in a year or $15 per day while the lower middle class s...

KENYA  is now the leader in geothermal power generation in Africa. Her capacity now stands at 400 MW and will  rise to 680 MW by the end of this year when KenGen, the state owned power generator commissions all 280 MW from its Ol karia wells.  Such an increase will stamp further Kenya's position as the runaway leader in geothermal electricity generation in Africa. Since the new capacity will be used to retire the expensive thermal capacity, the cost of electricity is expected to decline by up to 47 per cent before the end of this year.  This has raised expectations of a general price decrease come 2015. Already, the price of electricity is down 9 per cent on last month's prices  following the commissioning of 140Mw geothermal power in July. The decline is expected to pick momentum after the commissioning of another 280MW of geothermal power later this month. This will increase the supply of geothermal power to 680MW from 260MW just two months ago. Of th...

KENYA HAS AWARDED the first of several tenders for the development of coal-fired power stations in the country. The Lamu coal-fired project was awarded to a consortium led by the Oman based Gulf Energy LLC and Centum investment, a local investment firm. The project will produce 960MW of coal-generated power on 25 years power purchase agreement. Apart from being the first coal-fired power generator in Kenya, the project is also the first major independent power producer in the country.  It is thus a curtain raiser as far as PPP in power generation is concerned. It will increase the supply of electricity by almost 50per cent.  As of now, the country produces 1668MW a majority of it is generated by Kengen, the largest generating company in Kenya.  KenGen will add another 280MW to the national grid later this month thus raising the total capacity to 1948 MW. The Lamu project will add 960MW which is 49.3 percent of the capacity at the end of September 2014. Th...