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Ideas & Debate

Why we should watch neighbours in economic race

Kenyans take the country’s regional hub status for granted. Some argue this is warranted because Kenya has the largest GDP in the region, has been one of the most stable countries over the years, has notable diplomatic clout, houses several regional headquarters of multinational companies, is home to innovation and has better social and physical infrastructure than most of its neighbours.

But focus even at the regional level reveals that Kenya should wake up to the fact that there is a tussle for the crown of the title of ‘Regional Hub’.

Emerging analysis seems to indicate Tanzania strives to become a transportation and tourism hub, Rwanda is focused on becoming a business and trade logistics hub, Burundi is making strides in becoming the regional leader in food security and Ethiopia seems committed to becoming the region’s energy hub.

Kenya ought to be aware of Tanzania’s tourism ambitions and how that may further cripple what used to be one of our top forex earners.

Without the looming threat of terror attacks, Tanzania is positioning itself as safe alternative to Kenya both for the safari experience in the mainland and the coastal experience in Zanzibar.

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In terms of transportation Tanzania is again taking on Kenya and seeks dominance in the area that straddles the Indian Ocean and Nile Basin via the Dar es Salaam port.

Further there are plans to construct a new port in Bagamoyo and another at Mtwara, the latter which could serve northern Mozambique and Malawi.

Rwanda has made the greatest strides in the region in making it easier to start and conduct business in the country; Kenyans seems to have taken note of this.

However, Kigali’s ambition in trade logistics has been more subtle. Kenya sees itself as the natural leader in this area having attracted international logistics firms to the country reflecting the country’s role in connecting the region as well as the logistics needs linked to mega infrastructure projects planned in East Africa.

However, Rwanda has clear ambitions in changing this to become the centre of trade logistics services in the region by developing a dry port in its capital (the Kigali logistics platform) to enable quick turnaround of logistics services and reduce associated costs with the ultimate aim of exporting logistics services to neighbouring countries.

Nobody links Burundi to the term regional hub. However, the country has a focused strategy on rice production with a view to becoming a hub for food security.

Rice may seem like an arbitrary crop choice, but research done by an agricultural organisation found that increased production of rice could be an important factor that could save the region $500 million spent on imports annually.

Burundi seems set to beat Kenya to become a leading regional hub for food security by producing high quality, high yielding rice varieties while providing sustainable methods of growing rice to boost regional food security.

Finally, Ethiopia is the one Kenya should watch when it comes to energy. Ethiopia has a grand 25-year plan to make the country the best and cheapest energy supplier in the region.

With an aim of generating up to $1 billion annually in revenues, Ethiopia is digging in for the long haul, investing in energy to not only power Ethiopia and the region but export power to Sudan, Somalia and even Egypt.

Kenyans should get out of the comfort zone and wake up to the reality that countries in the region have ambitions of becoming regional hubs.

They have developed clear strategies on how to do so and are implementing these plans aggressively.

Ms Were is a development economist; E-mail: [email protected]; twitter: @anzetse

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