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Ideas & Debate

Stabilise EAC neighbours to grow trade and investment opportunities

A scarred hotel building in Mogadishu, Somalia. Peace in the Great Lakes region will mean more business opportunities  in Kenya and the rest of the East African Community. Photo/AFP
A scarred hotel building in Mogadishu, Somalia. Peace in the Great Lakes region will mean more business opportunities in Kenya and the rest of the East African Community. Photo/AFP 

Last month, I was seated in a Bujumbura lakeside hotel in front of a pristine sandy beach. Across Lake Tanganyika, one could see the expansive sleeping giant of Africa, the Democratic Republic of Congo (DRC).

It made me think of how times have by-passed the DRC and what opportunities a modernised and peaceful DRC would offer to the East African Community (EAC).

Of the five countries of EAC, four of them border DRC, presenting a wide geographical contact for an expanded regional market.

The DRC is a country with many resources that are the envy of rest of Africa and an attraction to the resource-hungry global industrial countries.

The country has failed to get its political and economic governance structures right ever since 1960 when the country became independent from its Belgian colonisers, and indications are that they have a long way to go.

It is easier for eastern DRC to access Mombasa and Dar es Salaam than their Kinshasa capital, making eastern DRC essentially and naturally part of EAC infrastructure and market.

The Katanga side of southern DRC has its logistics and trade links pegged to South Africa while the western Atlantic side of DRC has different trade orientations.

Discoveries of oil and gas in Uganda and Kenya, and methane gas in Rwanda are all located in the Rift Valley’s geographical and geological features that now seem prone to hydrocarbon deposits.

The Western branch of the Rift Valley forms nearly most of the eastern border between EAC and DRC, and stretches from the southern tip of Lake Tanganyika to Lake Albert in Uganda.

Any oil and gas found in EAC countries along the western rift as has happened in Uganda and Rwanda can be expected to be duplicated in equal quantities on the DRC side.

If DRC remains unstable, opportunities for inter-state cross-border joint ventures and synergy for oil and gas development will be missed. Further, potential for conflicts will always be there.

DRC is just one of the countries around EAC which when politically stabilised will provide extended markets for the EAC.

We have the newly independent South Sudan whose continued conflicts with Sudan have become a major disappointment.

South Sudan borders mainly Uganda and also Kenya and has applied to join EAC.

South Sudan is part of the justification for the LAPSSET (Lamu Port) corridor project that plans to establish petroleum, rail, highway and fibre optic infrastructure to link South Sudan to the proposed new Lamu economic zone and corridor.

It is encouraging to see the level of interest that Kenyan businesses have shown in South Sudan. While global and regional goodwill for South Sudan remains enormous, Juba has to firstly put its house in order.

When I visited Western Equatorial province of South Sudan a couple of years ago, I realised how easy it will be to connect EAC trade to the Central African Republic (and northern parts of DRC) through South Sudan once the Lamu project is realised.

Perhaps it is Somalia to the northeast of Kenya that may spring a surprise economic comeback when the ongoing war is concluded and when the Somali leaders and communities resolve to create a new nation.

Somalia has a well capitalised Diaspora, and enterprising citizens who can easily launch their country into a successful economic trajectory, once they choose peace and order.

For Kenya and EAC, a peaceful Somalia will increase scope for regional trade and specifically help to open up the north eastern parts of Kenya.

The Lamu corridor developments may be just in time should Somalia stabilise as a formal trade partner.

Ethiopia to the north is a stable country co-operating with Kenya. The southern parts of Ethiopia are an integral part of the proposed LAPSSET project and will offer excellent opportunities for trade with Kenya, once infrastructural links are completed.

The agreement to import electricity from Ethiopia is a good sign of inter-state trade and co-operation already taking place.

The ongoing successes with oil exploration around Lake Turkana may extend to the Ethiopian side of the Lake, and this may lead to oil production development joint ventures.

However, before we grow appetite for trade with countries around the EAC, we should demonstrate that we have fully used a full intra-state trade potential within EAC, which currently is not the case.

The World Bank, in a recent review of Kenya stated that intra-EAC trade will help to cushion the country’s shaky balance of payments from the vagaries of high oil prices, bad weather, and external economic impacts.

Wachira is the director, Petroleum Focus. [email protected]

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