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The East African : December 30th 2013
The EastAfrican NEWS DECEMBER 28, 2013 - JANUARY 3, 2014 Home-grown terror FOR A seemingly homogenous country — same language, religion, culture and ethnicity — Somalia is a baffling case: It has experienced anarchy on a scale not seen in modern histroy. Since the fall of Mohammed Siad Barre in 1991, the leaders of the more than 500 clans and sub-clans, have divvyed up the country into small fiefdoms. This status quo was firmly entrenched after the infamous “Black Hawk Down” incident in 1993, when American troops were captured, killed and humiliated. Over the next decade, Somalia was left to its own devices. UNHCR data shows that, by April 2013, over one million Somalis had fled the country and registered as refugees, nearly half of them to Kenya and over a quarter million to Ethiopia. But there Darkness falls IN 2006, a shadowy company called Richmond Development Ltd was picked by Tanzania Electricity Supply Company (Tanesco) —Tanzania’s power utility—ahead of a long queue of international firms that applied for a tender to generate 100MW of thermal-fired electricity in the country. Later that year, Richmond withdrew from the contract, bringing in a United Arab Emiratesregistered company called Dowans Holdings S.A to “inherit” the contract. But Dowans failed to supply the electricity. Tanesco terminated the contract after it was ordered to do so by parliament, following the unearthing of a massive scandal that cost four ministers their jobs in 2008 and the eventual dissolution of the Cabinet by President Jakaya Kikwete. Dowans then sued Tanesco at the International Chamber of Commerce for breach of contract, and in late 2010, IN 2006, a “junior senator” from Illinois, as some Kenyan government officials derisively referred to him, visited Kenya. It was not the first time Barack Obama was stepping into his “ancestral land,” but this visit was certainly more high-profile than the last, nearly 20 years earlier, when he was simply a young black man searching for his identity, Obama had gained a lot of attention through his well received keynote address at the Democratic Party Convention in 2004. In his the Chamber awarded Dowans $65.8 million. This year, Tanzania’s Court of Appeal dealt the final blow to the cash-strapped utility by upholding the 2010 decison. The result is that Tanzania continues to grapple with unending power blackouts and rationing, raising the cost of doing business, threatening the survival of small enterprises, and dampening competitiveness. According to a 2010 report by Africa Infrastructure Country Diagnostics, an initiative of the African Development Bank, the economic costs of outages in Tanzania are the highest in the region. It is estimated that the burden of power outages on the Tanzania’s economy is as high as 4 per cent of GDP. High hidden costs — underpricing, collection losses and distribution losses — are a major budgetary burden and comprise as much as 2.1 per cent of GDP. The audacity of hope speech, he blended elements of his personal story with a vision for an America with opportunities for all. In 2008, riding on the wings of a well-oiled campaign machine, the senator made history by becoming the first black US president, news that electrified the entire continent, Kenya in particular. The symbolism was potent, and Kenya “owned” Obama’s victory as if a Kenyan had ascended to the pinnacle of power in the world’s most powerful country, and many were US President Barack Obama. optimistic that this would herald a more focused engagement with Africa and African issues by the US. If nothing else, it was a much-needed self-esteem boost for Kenya—the postelection violence earlier that year had put Kenyans in a very unfamiliar position, that of appearing as another African basket-case. Obama, now in his second term, has addressed African issues only marginally. Keen to cultivate an image as a president for “all Americans,” Obama’s apparent lack of a concrete agenda for Africa has been seen as a political strategy to avoid alienating American voters who would criticise him for appearing to “favour” Africa. has always been talk of a “Greater Somalia,” a panSomali state that unites all ethnic Somali peoples in East Africa— southern Ethiopia, Djibouti, and northeastern Kenya. Somalia was thus a perfect opportunity for countries in the region to wage proxy wars against each other. Meanwhile, the coming to power of the Islamic Courts Union (ICU), was seen as a threat by the US, which encouraged Ethiopia to invade Somalia in 2006 and routed the ICU. A year later, the first battalion of the African Union Mission in Somalia (Amisom), comprising soldiers from Uganda and later Burundi, arrived in Somalia. But a hardline splinter group of the ICU — Al Shabaab — regrouped, then retaliated by “exporting terror”—first to Uganda, where a 2010 bomb killed 76 in Kampala; RWANDA EMERGED from a devastating genocide in 1994 in which over 800,000 Tutsis and moderate Hutus were massacred, to become the shining example of East Africa. How did it happen? The answer is the fastidious, exacting and no-nonsense Paul Kagame, current president. Keen to make over Rwanda’s image from a den of butchery and brutality, Kagame embarked on far-reaching reforms that would see the annual economic growth average 8 per cent per year since 2004. He is credited with reducing corruption, expanding security and health care and education, and increasing women’s rights. Rwanda is now ranked as one of the most competitive places to do business in Africa, aided by widespread adoption of ICT in government and digitisation of records. The country has opened its doors to expatriates who then tourist kidnappings on the Kenya coast. Kenya responded by sending its army into Somalia. The international community was not spared as Somali pirates began hijacking ships on the high seas even outside Somalia’s territorial waters — an estimated 3,741 crew members of 125 different nationalities have been captured to date. Kenyan forces captured Al Shabaab’s key base Kismayu in late 2012, but Al Shabaab did not relent, realigning itself with global terror group Al Qaeda. In September 2013, gunmen attacked a popular shopping mall in Nairobi, killing over 70 in a four-day siege. Somalia thus remains on the international community’s radar, as combined regional and international efforts to contain the terror threat in the Horn of Africa continue. Punching above its weight could help in rebuilding the nation; East African companies have set up shop in the country. At least one million Rwandans have been lifted out of poverty in just five years, according to the Rwandan Household Living Conditions Survey, released in 2012. To some observers, the Kagame government’s impressive delivery on public services was partly a “bribe” to the Hutu majority to accept Tutsidominated RPF rule; that because of the genocide, the price of failure and therefore possible collapse of the RPF would be too high — possibly another genocide. But Kagame has also been accused of being a dictator and propping up rebel groups in the DRC—a charge he has strenuously denied. Rwanda under Kagame has invaded DRC twice, arguing that it needed to root out the génocidaires hiding across the border. All that glitters THE 1980S and part of the 1990s saw economic growth in the region slide, stagnate, and even reverse. But by the late 1990s, African countries experienced a boom in commodity prices, and with it, rapid growth. This sparked a scramble for exploration of oil and gas in East Africa. Uganda discovered one billion barrels of oil in its Albertine Basin in 2006. Tanzania followed with massive discoveries of natural gas, equivalent to 7.5 billion barrels of oil. Kenya, too, announced significant discoveries of oil in Turkana County in 2012. But the commodity boom is only part of the story. East African governments have improved macroeconomic conditions, undertaken reforms to create a better business climate, and adopted policies to energise markets. They have increased the openness of trade, lowered corporate taxes, strengthened regulatory and legal systems, and provided critical physical and social infrastructure. However, East Africa’s economies have not experienced deep structural transformation. Production is dominated by the primary sector, either in agriculture or in minerals, and no country has a viable, internationally competitive manufacturing sector. Economic growth based only on rising commodity prices or on exporting the same things with the same technologies is not sustainable. Sustainability requires improvements in the economic structure, through diversification, increased capability to produce high technology products and services, higher productivity, greater international competitiveness, and the expansion of formal sector employment. 13 Guess who’s coming to dinner An oil rig in Turkana, where Kenya discovered oil in 2012. IN RECENT years, China and India have become the most important economic partners of Africa. Beijing’s investment and aid aim to tap into both natural resources and a growing middle class. China-Africa trade, just $1 billion in 1990, rose to $10 billion in 2000, then increased 15-fold to $150 billion in 2011, surpassing the US as Africa’s largest trading partner. In 2012, the figure rose to $198 billion, with some analysts now predicting that the figure will rise to $385 billion by 2015. Chinese aid and development packages have been attractive to African governments because of their “no strings attached” nature. East Africa has seen a surge in trade with China, receiving about $11 billion in investment and development aid from China over the past decade, reflecting the Asian giant’s rising influence in the region. China is targeting infrastructure development projects across the region, entering a market where nations such as Japan and traditional economic big boys like the European Union and the US have hitherto dominated. In Tanzania, China is funding a $1-billion 523-kilometre long natural gas pipeline from Mnazi Bay and Songo Songo Island in the south, to Dar es Salaam. In Kenya, China has provided a $1.4 billion loan to the geothermal sector. Rwanda is courting China to finance the $600 million Bugesera International Airport. At the last ChinaAfrica conference, Beijing committed to advancing the continent at least $20 billion in loans over the next three years. Strengthening East Africa’s infrastructure, therefore, not only supports economic activity inland, but positions the region to better engage with what could be the 21st century’s superpowers — a strong orientation toward the East African seaboard, and the rise of the Indian Ocean as an even more important economic zone than it already is.
December 23rd 2013
January 6th 2014