The night Bus to Mombasa

After penning the piece on Lamu port ,I was send on an urgent assignment to Mombasa. I took the night bus. In fact, the 11o'clock bus, which is  the last bus from Nairobi.


As I watched the night pass-by I  noticed that a majority of the towns along this highway, from Mlolongo to Mazeras operate 24 hours. I noted road side Kiosks and vendors selling  fruits, vegetables, snacks and candies.


 Boda boda men were on hand waiting for any willing customer; Restaurants were up selling their stuff. In most of the towns, especially from Mtito Andei to Salama I counted not less than 50 long -haul trucks parked. That is business to the local economy folks.


As the night wore thin and day began to break, we approached Mombasa and the towns from Taru all the way to Mazera were a bee-hive of activity.


Since the thoughts of what could be in store for lamu were still fresh in my mind,I began to ask: Is this what is in store for  lamu and the long stretch of arid land to Moyale and beyond? 


The opening of Lamu Port is not just good news for Ethiopia and south Sudan. But even the folks along its route will gain immensely. Soon we shall find the entire route open 24 hour a day. No wonder the port, it is said, will generate an additional three percent to Kenya's Gross domestic Product, GDP. The Port will also gain  in status when it links with the Mombasa-Addis  road at Isiolo.  see http://eaers.blogspot.com/2012/02/road-that-open-950million-volume-of.html

Lamu Port's Construction begins Friday

 Kenya’s town of Lamu will this Friday March 2, 2012 be thrown into a lime light of gargantuan proportions. It will play host to three presidents in an event that will change Lamu forever.

The three Presidents will be there for the ground breaking ceremony to mark the beginning on the construction of Lamu Port. The second seaport in Kenya, Lamu is also the head port in the Lamu-South Sudan Ethiopia transport Corridor.

Consequently the presidents of South Sudan, Salva Kiir and Ethiopian PM, Meles Zenawi will witness the groundbreaking ceremony by the Kenya President, Mwai Kibaki.   The Kenya government is said to have set aside US$2.5 billion for the construction of 3 of the 32 bays. Seehttp://eaers.blogspot.com/2012/02/kenya-to-begin-construction-of-gateway.html

South Sudan plans to build a US$4 billion Oil Pipeline from its wells 2000 KM away to Lamu Port. Ethiopia is also looking at Lamu as the shortest export route for her. What’s more the construction of the port could motivate the construction of the trans-Africa Railway line between Lamu in the Indian Ocean coast and Port of Doula in Cameroon on the Atlantic Ocean.

The visit is therefore a significant one for a town only known for cultural tourism and donkey racing during Maulid celebrations. Lamu is not just another seaport. It is a series of projects linking Africa to the world. Not only that, it will also open Kenya’s God forsaken Northern frontier for economic exploitation. Africa had better sit up and take 

Kenya rated second best investment destination in Africa

Kenya has been rated top frontier investment market in Africa, second only to Nigeria, in a survey conducted by the Economist Intelligence Unit (EIU.

The survey sampled 158 international fund managers and investment bankers. Of these 76 (48%) rated Kenya as offering the best prospects for institutional investors over the next five years.

The other 81 (52%) said Nigeria was better. The survey is set to generate renewed international investor interest in the stock market, stemming the sell tide sparked off by the Crisis in Eurozone. The market capitalisation has shed off 28 per cent so far.

The survey showed a shift to long-term investment strategies from more speculative and short-term bets. A third of the respondents said they will invest at least five per cent of their portfolio in Africa. This new finding is in sync with our earlier report that said Africa is the next best investment destination. See http://eaers.blogspot.com/2012/01/africa-next-big-investment-story.html

 This comes as good news for Kenya that is now seeking a huge pile of cash to build infrastructure. The country needs more than US $44 billion in the next five- to -eight years to build new ports, roads and railways and to improve water and electricity supply.http://eaers.blogspot.com/2011/12/kenya-rearing-to-become-ppp-playing.html

 To sweeten the deal, Kenya will next month table for debate in Parliament a PPP, said Joseph Kinyua, permanent secretary at the Treasury. The bill will clarify the legal basis for Public-private partnerships, PPPs, and streamline the contracts.

Kinyua told a meeting of government departments and private sector representatives that the Treasury would raise some funds for these projects from the private sector.

"It is currently estimated that there is a funding gap of approximately $44 billion that is needed to address the infrastructure requirements in the next five to eight years," he said.

"The PPP (Public-Private Partnership) arrangements, therefore, offer an opportunity for Kenya to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities in order to close this huge funding gap."

Kenya’s development Blue-Print - the Vision 2030 - forecasts the economy to grow by 10 percent a year by 2030. The government project that the country will become a middle-income country by 2030. Infrastructure development is the driver of this ambitious plan.

In its 2011/12 (July-June) fiscal budget, the government proposed to raise 35.85 billion shillings ($432.7 million) in infrastructure bonds, up from 30.5 billion shillings the previous year.

The government is also in the process of getting a $600 million two-year syndicated international loan to finance infrastructure development. 

A large Commercial bank? Hop over to Rwanda

Rwanda is looking to license large commercial banks that have the financial muscle to bankroll large investment projects in the east African country. 


A good economic c performer, Rwanda's economic growth is project at 7.6 percent this year. The Governor of the central bank Governor Claver Gatete  told the press in Nairobi  that his country is eyeing banks with the financial muscle to lend Upto US$100million.


Rwanda boast of  nine commercial banks and hundreds of microfinance institutions. However, it wants  banks that can underwrite the country's economic development .


The banking industry in Rwanda was healthy, Gatete said, with the capital adequacy ratio standing at at 27 percent last year, against a statutory requirement of 15 percent. generally the operating environment is suitable.


Last year, Bank of Kigali, one of the largest banks in rwanda listed at the local Bourse. Kenya commercisl bank, one of the largest bank in kenya, was the first to list at the Kigali securities exchnage tw years ago. Now Equitybank another large Kenyan bank has been lisenced to operate in Rwanda


Gatete also said Rwanda plans to reduce loan defaults in the industry to 5 percent of total loans in the medium-term, and cut non-performing loans in the industry to under 7 percent this year from 8 percent, to ensure the sector's continued health.


Total outstanding credit by banks in the country stood at 509 billion Rwandan francs ($847 million) at the end of last year, he said.


Gatete said the main risks facing the country's projected growth of 7.6 percent this year - from a forecast 8.8 percent in 2011 - stemmed from the euro zone debt crisis.


"It all depends on external shocks. We don't know what is happening in the euro zone which is one of our big trading partner," he said.


"We don't know what factors will drive oil prices. It also depends on whether the famine in the Horn of Africa will persist."


The projected growth for this year will be driven by the agricultural sector, tourism and exports, which grew by 53 percent last year to almost $400 million, Gatete said.


"We expect significant growth this year now that the government is making it a priority to support the export market," he said.


Year-on-year inflation is projected to stay below 7.5 percent this year after hitting a high of 8.3 percent in 2011.


Gatete said the franc's exchange rate would be stable to the dollar with market forces determining the rate.


"For us, we intervene when there is any kind of shock ... we have sufficient reserves," he said, adding the central bank holds forex worth 7.7 months of import cover, way above the stautory four months.

Tanzania gets euro 50 M loan for airports

Tanzania has signed a 50 million euro loan facility with the European Investment Bank (EIB) to upgrade regional airports to boost tourism and air transport, the local press reported today. Tanzania is east Africa's second-biggest economy.

The cash will be used to upgrade Kigoma, Tabora, Bukoba, Shinyanga and Sumbawanga airports. "This project will significantly open up and ease transport to and from the regions as it will provide access to cost-efficient air transport ... some of the regions are potential for tourism activities,"  said Ramadham Khijjah, permanent secretary in Tanzania's finance ministry.

Projects include the replacement of runways, and the reconstruction of taxiways and passenger terminal buildings.EIB is  a key player in Tanzania's infrastructure development, with the bank having previously loaned the country $134.5 million for a power project.

Tanzania earned $1.4 billion from tourism in the year ended October 2011 from $1.2 billion a year ago, helped by a rise in tourist arrivals, according to central bank statistics.

Kenya-Airways in the largest Rights issue in EA

A KQ aircraft.The youngest fleet in Africa

Kenya Airways’ will soon raise US$262 million through a rights issue floated in the three securities in East Africa by the end of this first half of this year. The Kenyan national carrier is cross-listed in the three exchanges.

The issue, the largest in East Africa is meant to support the airline’s 10- year expansion plan. The plan incorporates both fleet and destination expansion. The airline plans to raise its fleet to 107 aircraft by 2020 from the current 37 aircraft<its plans to acquire twelve cargo freighters by 2022.

Kenya Airways is the most profitable and successful privatized airline in Africa. In fact it is a case study of successful airline privatization. It is owned 23 per cent by the Kenya government, 26 percent by the Dutch Airliner KLM, and 51 per cent by local investors.

The airline has already ordered Nine Boeing 787 Dreamliner to be delivered in the next three years or so. It has the youngest fleet in Africa with many of its aircraft being less than 5 years old.

Kenya Airways or KQ as it is popularly known. It flies to 56 destinations world wide. 41 of these are in Africa. It plans to increase its destinations to 115 destinations from the current 56.

The rights issue is expected to boost the number of shares at the Uganda and the Dar es Salaam bourses.

Readers of this blog also read www.eaers.blogspot.com