News / Africa

Kenya Attacks Undermine Plans for East African Trade Hub

Kenyan police officers patrol Mavuno villages near Mpeketoni after unidentified gunmen recently attacked the coastal Kenyan town of Mpeketoni, June 17, 2014.
Kenyan police officers patrol Mavuno villages near Mpeketoni after unidentified gunmen recently attacked the coastal Kenyan town of Mpeketoni, June 17, 2014.
Reuters
The latest in a string of militant attacks on Kenya's coast has dealt a fresh blow to the economy, but the threat this time goes beyond the tourist trade to an ambitious $25.5 billion port and transport scheme next to the historic town of Lamu.
 
Lamu residents, often working in tourism like others along Kenya's palm-fringed coastline, have seen visitors flee with each assault, growing used to empty alleyways that once bustled with visitors and idle dhows awaiting clients on the waterfront.
 
But, till now, most attacks targeted Mombasa, 240 km (150 miles) south. This week gunmen hit closer to Lamu, striking twice in 24 hours around Mpeketoni town just 30 km (20 miles) from the 14th century Arab trading post. About 65 people died.
 
“Our future hinges on getting our port,” said Munawar Abdalla, 36, a local mason crafting ornate chairs styled with ebony and camel bone. “But if there's no peace here how can the Lamu port work out. I'm very worried.”
 
Lamu is at the heart of a grand scheme that aims to connect new oil fields of Uganda and Kenya, and possibly the wells of  South Sudan, by pipeline to the Indian Ocean. It also aims to link land-locked Ethiopia, an emerging economic power, to a brand new container port along a planned north Kenyan highway.
 
Critics have always said raising $25.5 billion for a 32-berth port, new roads and other infrastructure by 2030 was optimistic at the best of times. But attacks on Lamu's doorstep make the tough task of raising financing an even harder sell.
 
It may force plans to be stripped back, reducing it to a pipeline and oil terminal to deal with crude flows from Uganda and Kenya that may reach 500,000 barrels per day in a few years.
 
“This is a big important political economic project but if you don't achieve the safety of whatever staff you have working on this project, it will be hard to attract foreign investors,” said Mark Bohlund, an Africa economist at IHS Global Insight.
 
The project is dubbed LAPSSET, which stands for Lamu Port-South Sudan-Ethiopia Transport. It was dreamed up before Kenya or Uganda found commercial oil and is a bid to keep Kenya as east Africa's main trade gateway, easing pressure on its congested Mombasa port. But it has struggled to secure backers.

Driving up costs
 
A Chinese firm was awarded a $484 million contract to build three berths early last year, but there has been no sign of work starting. Meanwhile, a rival $10 billion port project in southern neighbor Tanzania powers ahead with Chinese backing.
 
Fresh worries around Lamu, which is 110 km (70 miles) from war-torn Somalia to the north, will drive up insurance premiums and could make any work pricier if fewer firms compete.
 
“It absolutely raises the cost of the project,” said Clare Allenson, Africa expert at Eurasia Group consultancy. “You will have to invest heavily in private security and other precautions and insurance for all elements of the project will go up.”
 
The government insists it is tackling the security problem.
 
Although Kenya has blamed a string of assaults in recent months in Mombasa and the capital Nairobi on Somalia's al-Shabab militant group, President Uhuru Kenyatta said his political rivals were the ones behind the Mpeketoni attacks.
 
That drew heated denials from opponents and raised eyebrows among experts after al-Shabab claimed responsibility, even if they acknowledge the Mpeketoni attacks on a poor area showed different tactics to al-Shabab's raid on Nairobi's upscale shopping mall last year in which 67 people died.
 
The government insists Kenya is still a safe place to invest, while those behind the port project remain upbeat.
 
“I don't want us to overplay this,” LAPSSET Chief Executive Silvester Kasuku told Reuters from Nairobi offices, adding the latest attack would not hurt the project “in any meaningful way because any issue over insecurity is not just unique to Kenya.”
 
Yet, there is still little activity at the port site, a short boat ride from Lamu through the mangroves.
 
A gleaming four-story building stands above the mangrove bushes, home to Kenya Ports Administration, but the bay which it overlooks shows no sign of dredging or other work for the container berths. Some workers on site are nervous.
 
“We are now worried about security because of these attacks,” said one worker this week, near the remote concrete port authority building sheathed in a mirror glass and stone exterior. “We don't have any police here.”
 
Some analysts say the planned berths may never be built, limiting the project to a pipeline and oil terminal without the grander trimmings of highways, railways and container ships.

Risk Appetite
 
“The pipeline and oil component still has promise but the broader scheme ... is at risk,” Allenson said. “There is a pretty big difference between risk appetite for oil projects versus broader shipping [plans].”
 
Energy firms, long used to extracting oil from tough places, are unlikely to be fazed. Britain's Tullow Oil is determined to pipe oil it has discovered in Kenya's northeastern Turkana region and Uganda to the coast.
 
That means crossing north Kenya, a region close to Somalia where attacks between rival groups over land and other disputes are common. A cheaper pipeline above ground could be target.
 
Tullow, which works with Africa Oil in Kenya, has said it plans to bury the piping, citing both environmental and security reasons. It has also said the pipeline route and other details have yet to be confirmed as studies are still going on.
 
Exports from Kenya and Uganda, where France's Total and China's CNOOC also operate, could start in about three years, possibly trucking oil out initially.
 
Kenya and Uganda have begun work on plans for the pipeline that could cost $2.5 billion to $5 billion. South Sudan, which now exports oil via a pipeline through Sudan, could join in.
 
Yet, with plans still in the works, some fret that tensions in Lamu will increase. Mahmoud Abdulkadir, a 62-year-old Muslim preacher, worries radical Islamist ideas that have won over youths further south on Kenya's coast may be spreading north.
 
He points to Swahili graffiti near Lamu's 19th century fort that reads “Boko Haram ndio njia”, or “Boko Haram is the way”, a reference to the Islamist insurrection in Nigeria on the other side of Africa.
 
One senior security official said al-Shabab and radical Islamist groups had been playing on the disputes and rivalries between ethnic groups over land ownership and other issues, which might explain why Mpeketoni was hit.
 
“Al-Shababhas been exploiting local grievances,” he said.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid