Christine Mungai and Charles Onyango-Obbo wrote a very interesting three piece report about the future of East Africa in The EastAfrican some months back (who will be the engine of Greater East Africa? ) and after reading the three pieces, I noticed some interesting facts especially from the first report. But let me start from the beginning. When Kenya, Uganda, South Sudan and Ethiopia launched the ambitious Lamu port-South Sudan- Ethiopia-Transport (LAPSSET) Corridor, one country was missing, Tanzania.
South Sudan has proven oil reserves in its disputed border lands with Sudan, Kenya is in the process of verifying its potential and commercial viability and Uganda, 15 years after discovery, believes it ready to get the pumps running. Ethiopia is the only exception, however it has been conducting surveys on the same hoping its close proximity and similar geological formations to the new oil countries might provide promising signs.
LAPSSET, a $25 billion undertaking, should work to the advantage of all involved especially since all the other countries are landlocked and need an easier route out for export. South Sudan wants to avoid the conflict ridden Sudan, having had their differences even before they separated. A cheaper shorter route would have been through Ethiopia then out through the 705,000 container per year terminal in Djibouti, but then again Ethiopia and Djibouti don’t see eye to eye.
Another option was through Somalia but with an unstable government, terrorist sponsored militia and the threat of pirates that is also not so much of an option. Ethiopia being land locked as well, has both of those scenarios to look at so the only route to look at was Kenya. Uganda on the other hand had two options, Kenya or Tanzania. Kenya holds two advantages it has a railway line that extends to Uganda and they could avoid having to go around Lake Victoria to put up the pipe line though Tanzania making that route longer. The pipe line could have however still gone down Burundi and Rwanda then down through Tanzania, providing a cheaper fossil fuel option for both countries even before exporting its oil, but Rwanda has been keen on clean energy to sustain its growing economy especially with methane from Lake Kivu and geothermal fields. That would mean Uganda could do business with three countries even before they ship their oil out.
Back to LAPSSET. Recently, the presidents of Kenya, Uganda and Rwanda have been holding numerous closed door meetings with infrastructure deals being discussed. Rwanda is indirectly placing itself into the LAPSSET project again avoiding Tanzania. The standard gauge railway line between the three countries will greatly ease transport of goods between the countries but Uganda and Kenya already had one planned to Lamu in addition to the already existing century old railway line that runs through both countries. With three countries now involved the chances of another failed revival of the hundred year old railway might be minimal. However, Uganda might also see this a faster way to export their oil before the LAPSSET project is completed.
So why avoid Tanzania with all their infrastructure projects going on which are also on a much larger scale? Tanzania have a $32 billion Mwambani port and Railway corridor (Mwarporc) in Tanga. It is largely similar to the one in Lamu as it is also a new port. The standard gauge railway will go through Uganda to the DR Congo. It might not be running through three potential oil rich countries but considering DR Congo is estimated to have mineral resources worth $ 24 TRILLION, it is strategic. The second major project is in Bagamayo, where the Chinese – surprise, surprise – have been contracted to build a port capable of handling 20 million containers an year. Compare this to half a million containers being handled by the port in Dar es Salaam and 800,000 port of Mombasa and you understand the scale of the project. A new berth was built in Mombasa but that is nowhere close to adding to the extra capacity the Bagamayo port will handle. Rwanda, Burundi and Uganda would have found this option a better option for their exports but other than Burundi the rest of them still chose Kenya.
Now make no mistake Tanzania doesn’t have oil but it has another fossil fuel, natural gas as well as coal in equal vast quantities. Tanzania has an estimated 5 billion tonnes of coal and 200 trillion cubic feet of natural gas and are planning to use this to boost their energy supply that has forced them to export electricity from its East African neighbors. The infrastructure projects will help to ease transport and export but it looks like it is trying to go it alone with some of the projects it has. You could see this as a rebellion from Tanzania but you could also see it as a potential opening to investment in the greater East Africa extending to the Far East. Congo could have its minerals shipped from the Indian Ocean instead of the Atlantic. But look at it this way, the Indian Ocean is shared by three continents Africa, Asia and Australia. These continents hold over half of the world’s population, counting the populations of India, Russia and China combined. China’s investments are very strategic also.
Image credit: Appfrica via flickr
They have invested $ 9 billion in Congo alone in return for some of its minerals, then went ahead to invest in helping build a port in Tanzania. Taking the minerals through the Atlantic is a much longer route than through rail into Tanzania and then shipped to China. Tanzania might miss out on the oil frenzy but it will recoup all that if Congo comes into play. Tanzania will also count on its relative stability. Apart from the recent happenings in Zanzibar, calling for cessation it has been stable for a longer time than any of the east African community countries. If – God forbid – Kenya would have a re occurrence of post-election violence, they would try to pull away investors from shipping through Mombasa and through its ports.
With the planned 40,000 megawatts, 80 billion Grand Inga dam in the works in Congo, the biggest hydro-power project in the world, Tanzania could also look at Congo as more of a trade partner that the rest of the East African nations. However if the LAPSSET project becomes fully functional and devoid of politics and interference, it might leave Tanzania in a precarious position with only itself and conflict prone Congo as trade partners. If that becomes the case I will bet you we will be hearing of deals for a railway and pipeline also to Tanzania as we also seek to gain from their natural gas and them from oil from the three oil nations.
The future does look bright for all of East Africa whatever the case.
