East Africa Economic Report

Lokichar field in Kenya. The sweet smell of petrodollars  Kenya and Uganda are salivating over petrol dollars. And there is a stampede for the sweet aroma. Kenya will haul its first crude barrels out of Lokichar fields this Sunday. But Uganda is not far behind.  And both appear set to hit the market come December 2018 in a Pilot programme called the Early Oil export. Kenya is first off the blocks to ship 80,000 barrels from Lokichar to Mombasa for storage until, 400,000 barrels, enough to fill a tanker. Uganda is planning to evacuate 48,000 barrels stored in Hoima Basin fields and is in the process of awarding the contract for the transportation of the crude to Mombasa by road.  It could be shipping its first consignment by the end of June or early July, Uganda watchers say.  The Crude will also be stored in Mombasa at the tanks of the defunct Kenya Petroleum Oil refineries. This means that both countries will have to up their pumping activity in the comin...

Noor Haji: The DPP stamping his authority The fight against graft in Kenya has picked momentum. It has beaten all other previous attempts in terms of speed, breadth, and potential impact. This round of investigations appears designed to be a precedent setter- a deterrent.  Seems like the 40 days of the thief are over. In addition to prosecution, the suspects could also lose the property acquired with proceeds from sleaze.  This will be followed, if the example of the KPLC contractors is anything to by, by blacklisting the same firms so that they cannot do any business with the government in the future. Also, the banks through the funds were channeled are staring at prosecution and heavy fines while the managers could find themselves jobless if they escape prosecution. Some employees of the power distributor, Kenya Power and Lighting, have been sacked for their involvement in graft and 350 companies which they had approved to render services to the firm have had...

The Monsters that will transport the crude Kenya will begin its Pilot oil exports next month. All contentious issues have been cleared and the country is ready to export oil in a few weeks’ time. Kenya’s crude is said to be among the best in the world, at par with the Brent Crude C1 which is now selling at $78.94 at the world market. This means Kenya will gain a windfall of roughly $24 a barrel.  The government and Tullow oil last year said the pilot scheme was viable at the then market price of $56 a barrel. The contentious issue with the Turkana community regarding revenue sharing was the last hurdle in the process. All other technical issues such as the acquisition of transporters have been cleared.  As at February last year, Kenya had 70,000 barrels of crude stored in tanks at the Lokichar Basin where the Wells are with a daily production potential of 2,000barrels.  The country is planning to export 2,000 barrels a day in a pilot project that will e...

   Corruption is becoming a dangerous business in Kenya! In the last two days, five people convicted of graft have been fined a total of Ksh 100 million (US$1 million) and sentenced to jail for a total of 20 years! That sounds like a clear deterrent if there was any.  And if that is not deterrent enough, the entry of spies into the investigation of graft is a warning shot that the days of graft are running short. The spies, of the National Intelligence Service, NIS, are in the thick of investigations in the latest scam to hit the National Youth Service, NYS. The department is said to have paid a whopping Kshs 9 billion, (US$90 million) to ghost suppliers in the last two years. This so soon after the then Cabinet Secretary for Devolution, Anne Waiguru, was hounded out of office over graft scam in the same department. Waiguru was hounded out over an alleged loss of Kshs 791 million (US$7.9million). That ten times more was stolen after her departure is disturbing. It...

 Politicians and journalists in East Africa have formed a habit of commenting on investment in the infrastructure sector without proper understanding. They thus mislead the public to believe they are short-changed. It is easy to point at their failure as deliberate misreporting. However, given the spread of the practice in East Africa, it is clear that the commentators lack the capacity to write technical reports, which makes their work worthless.  On reporting on roads construction and costing they focus on the distance, ignoring the number of roads on the distance. That is they count the cows instead of counting their legs which is the practice in road construction. This is because roads have either two lanes or more and each lane is counted as a tarmacked road.  A good example was the sustained criticism of Kenya’s Standard Gauge Railway project from Mombasa to Nairobi.  While it was condemned as the den of corruption, investigations established that ...