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

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials and human rights organizations assert that Pakistani authorities are using deadly attack at school in Peshawar as pretext to push out Afghan refugees More

At Boston Bombing Hearing, Sides Spar Over Boat

At final pre-trial hearing, lawyers for suspect Dzhokhar Tsarnaev, prosecutors disagree on whether vessel where he hid from police can be shown to jurors More

Iran Judiciary 'Picks' Lawyer for Detained WP Reporter

Masoud Shafii has been attempting to secure official recognition as Rezaian’s attorney, but is not allowed to see his client in prison 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 Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More