East Africa Economic Report

Soldiers guarding a crude oil storage Tank in South Sudan   In November 2020, we ran a story on the risk facing the fossil fuels industry, we asked; whither the industry and the economies that depend on it to fund national development?   https://eaers.blogspot.com/2020/11/whither-fossil-fuels-and-dependent.html Now, a recent report on the Ugandan oil industry provides the answer- and it is gloomy. The Ugandan oil industry comprises the upstream wells, the Midstream oil evacuation pipeline, EACOP, and the downstream oil refinery. The crude oil prices, on the other hand, are declining with no prospect of turning north significantly in the future. Developing this industry could thus be spending good money in pursuit of bad. The world is shifting away from fossil fuels due to climate concerns.   The report, “ understanding the impact for a low carbon transition on Uganda’s planned oil industry” by Climate Policy Initiative, CPI, suggests that the industry is stillborn. ...

Presidents Museveni and Magufuli This bromance almost derailed a  major development project  According to a report in Uganda’s Daily Monitor , the government of Uganda will construct 2700 KM of Standard Gauge Railway regardless of whether Kenya extends its section to the border or not. The work, says the report, quoting the Coordinator of the Project, Eng. Perez Wamburu will begin in the financial year 2021/2022. This is good news for the project that was almost derailed by populist, Zombie ideas. Wamburu expressed confidence that the Chinese Exim Bank will approve its loan application, perhaps early next year. Uganda’s decision adds the pressure on Kenya to extend the line to Malaba, on the Kenya-Uganda border. The China Exim Bank withheld funding for the whole project after a tiff between Kenya and Uganda forced Kenya to redesign the line to terminate in the Kisumu City of Kenya, on the shores of Lake Victoria.   Trouble for the line began in 2016 due to meddling ...

 ETHIO- DJIBOUTI RAILWAY SUFFERS FROM THEFT AND VANDALISM, LEADING TO HEAVY REVENUE LOSS. Workers building embankments on the Kenyan SGR This headline, in an Ethiopian publication, Addis Standard of December7th, 2020, dismayed me. It reported about a meeting held by the Management of Ethiopia Railways Corporation and local residents of the Amhara Region. The purpose was to educate the local people on the benefits of the Railway line and to motivate them to protect it.   The Corporation, said the Managers, had lost 114 million Ethiopian Birr (US$2.961 million), in the quarter ending September 31, 2020, due to vandalism and theft of Railway infrastructure. This crime, said the Managers had forced the train, an electric train, to slow its speed from 80Kph to 50 Kph thus slowing freight movement between Addis-Ababa and Djibouti port, by six hours. The 705 MK journey would normally take 12 hours but now extends to 18 hours.   The Addis-Djibouti Railway line is the first ...