Thursday, 25 September 2014

The corrupt fuel violence in Kenya

CORRUPT businessmen and politicians have been fanning insecurity in Kenya. They use violence as a red herring to divert attention from corruption to insecurity in a bid to cover their trucks or to blackmail the government into stopping criminal investigations. A case in point is the violence in Lamu County in June and July this year.

 Corrupt characters had grabbed huge tracts of land- to be precise- some 500,000 acres of public land.  The land covers much of the area set aside for the proposed   US$23 billion Lamu Port-South Sudan - Ethiopia transport corridor, LAPSSET.  The land is public land occupied by squatters. The grabbers therefore hired goons- who pretended to be Al-shabaab militants- to violently evict them.

This opened a Pandora’s Box.  Investigations into the cause of the violence unearthed the scandal.  The land grab was executed by 22 entities that grabbed 500,000 acres in 2011/2012. It is note worth that that was the period immediately preceding the general election in Kenya in 2013. Kenya’s President Uhuru Kenyatta pulled fast and bold one on the avaricious:  He shocked the nation by announcing that just a group of 22 entities, had grabbed some 500, 000 acres of public land in Lamu County. The president ordered the repossession of the land and also investigation with a view to prosecuting the culprits.

The presidential announcement solved a paradox: Lamu is a sparsely populated County, where population density is just sixteen per square Kilometre: Why does the region suffer landlessness and violence related to land ownership?  Now 500,000acres of land measures some 2000 square kilometres. This is enough land to accommodate some 32,000 people.  This means that the 22 well-healed land grabbers displaced some 32,000 people.

The land is a prime piece of real estate considering that it borders the site of the proposed US$25 billion Lamu Port south Sudan Ethiopia transport (LAPSSET) corridor. This corridor’s developments include the Lamu Mega Port on 9000 hectares of land, a 2000km high speed Railway line, a Crude Oil pipeline, a120, 000bpd Crude oil refinery, a highway  a resort city and an economic zone.
 The Port will also be at the head of the equatorial bridge, a Railway line connecting Lamu Port on the Indian Ocean to Douala port in Cameroun on the Atlantic Coast. This makes the land a real gold hence a prime target for grabbing.  LAPSSET will turn the backwater Lamu County into a bustling energy and logistics hub in east Africa thus increasing demand for land and consequently pushing up its price.

Construction of the first three berths begins in the 32-berth port was proposed to begin this month hence the urgency to evict the squatters.  At least 100 people were slaughtered in an orgy of violence lasting about three weekends.

 The predators according to intelligence reports were business men and politicians from both the coast and up country.  A majority appears to be members or supporters of the opposition party, ODM, which is an affiliate of the CORD coalition, the official opposition party in Kenya. One of the kingpins of the opposition, Siaya senator James Orengo was the Minister in charge of Lands in 2011/2012 when the land was dished out.  Orengo is a Member of the Opposition CORD coalition led by Raila Odinga who was the Prime Minster in the last coalition government.  He and Orengo are also at the fore front of change the Constitution Movement. Ironically, among the issues they want voted for is Corruption and insecurity. He has already recorded a statement with the Police over the land grab.
 The corrupt are adept creating smokescreens and red herring s to cover up its shenanigans. For instance, when the violence broke out in Mpeketoni in Mid- June, the government blamed local political networks.  The opposition led by Raila Odinga, stopped short of calling the President an idiot insisting that the violence is perpetuated by the Somali militant group-Al- Shabaab. Interestingly, the Somalia based Al-shabaab militants “claimed responsibility for the carnage.”  However, a person suspected to be an ODM supporter, was later arrested for using a fake Al-shabaab twitter account to issue the said admission.

 The admission by Al-shabaab was puzzling; the Militants are under siege, nay on the run, in Somalia.  Few thought they have the stomach to attack targets across the borders.   The land scandal has blown the cover on the avaricious in Kenya.

A part from displacing people from their land and therefore their daily economic activities, the violence has devastated the tourism sector.

The coastal economy is largely depended on tourism.  The sector, which was just emerging from bad business caused by uncertainties associated with last year’s elections, is now back in the doldrums. Travel advisories by western source markets have emptied the white sandy beaches of tourists.
The industry employs some 500,000 people directly and millions others indirectly.  These jobs are at stake.  Hotels have already declared a significant proportion of these employees redundant.  The national economic growth rate which is forecast at 5.5 to per cent this year is also threatened. The crisis in the tourism sector could shave off up to one per cent off the forecast growth. Last year, the decline in tourist numbers shaved off 0.7 per cent of economic growth.

It is perhaps this realisation that informed the bold move by the government to cancel the title deeds and repossess the land. In addition, to stop the bloodletting and hemorrhage of the economy, the government sent the military to hunt down the criminals with a devastating effect.

Intelligence reports indicate that a large number of the criminals were killed in security forces’ raids on their hideout in the expansive Boni forest. If government sustains its aggressive stance on crime, insecurity will decline. In fact, in august, insecurity was down significantly.

Tuesday, 16 September 2014

East Africa’s EOI for Pipeline extension

Kenya, Uganda and Rwanda have invited EOI (Expression Of Interest) to build a 784-kilometre pipeline to transport while petroleum products. The project, to be built in in two phases will transport refined petroleum products from Kenya to both Uganda and Rwanda.
The project, part of east African regional integration plans, involves extending an existing pipeline that runs from the Kenyan port of Mombasa and the western town of Eldoret.

The extension will link that pipeline to Kampala and Kigali and also serve markets in Tanzania, Burundi, South Sudan and the Democratic Republic of Congo. Products now have to be trucked by road.

Uganda and Kenya have discovered commercial quantities of oil and plan to start production in about three years. Those finds are among a series of discoveries along Africa's eastern coast and Rift Valley which runs through Kenya and other states.

As well as exporting crude, Uganda plans to refine some oil, making products that could flow through the pipeline extension. Plans include modifying the existing pipeline, which pumps products from the coast inland, so products can flow both ways.
 Interested parties should submit the bids by Sept. 30.

 The advertisement does not have a price tag. However, previously the tag was estimated at $300 million.

The existing products pipeline is owned and operated by the state-run Kenya Pipeline Company (KPC).

The extension would be built in two phases, comprising a 350-km stretch between Eldoret and Kampala and a 434-km pipeline between the Ugandan capital to Kigali.  It also includes construction of storage terminal at Kampala, Mbarara and Kigali.

Separate to the products pipeline, Kenya, Uganda and Rwanda invited bids in June for a consultant to oversee a feasibility study and initial design for a 1,300-kilometre oil export pipeline to the Kenyan coast. 

Tuesday, 9 September 2014

EOI call for Kenya's oil jetty

Kenya's National Oil Corp has floated an EOI for a project adviser  for a new oil jetty in the port city of Mombasa.

 The tendedr, published on Monday, NOCK invites firms to submit expressions of interest by Sept. 29 to act as adviser for the Public Private Partnership (PPP) project.

"The successful candidate will  review the original feasibility study to cater for the oil discoveries which have made Kenya a potential oil exporter.

 The initial plans unveiled in 2012 for the oil jetty, or single buoy mooring, and storage facilities were pushed back to change the scope and design after oil was found in Kenya. The initial plan was to cost some US$500 million.

"We originally envisaged to work with a specific jetty design as a net importer of oil but that changed because of the discovery of oil deposits in Kenya in 2012," NOCK spokesman Temesi Mukani  told Reuters.

The tender document said the project aimed to ensure the port was more efficient, cut delays and made Kenya's coast a competitive choice for oil tankers. Another objective is to "provide the infrastructure that will support east African states to export their discoveries to global markets".

The main export route discussed up until now for Kenyan and Ugandan oil, both still a few years from major production, would be via a planned pipeline in north Kenya to a new port at Lamu.
Kenya is under pressure to boost storage facilities and develop a strategic reserve to stabilise petroleum supplies. The country has no strategic reserves and relies on oil marketers' 21-day reserves required under industry regulations.

Crude has also been found in next door Uganda, part of a string of hydrocarbons finds along Africa's east coast and the Rift Valley that passes through Kenya and neighbouring states.

Fuel prices have a big impact on inflation in the east African nation, which relies heavily on diesel for transport, power generation and agriculture, while kerosene is used in many households for cooking and lighting.

Wednesday, 3 September 2014

Kenya Bourse's IPO oversubscribed

NAIROBI, Sept 3 (Reuters) - The Nairobi Securities Exchange (NSE) has raised 627 million Kenyan shillings ($7.1 million) for expansion in an oversubscribed initial public offering as part of plans to demutualise the bourse.
Demutualisation is seen as a way of curbing the influence stockbrokers have over the exchange's management, which has been criticised for reacting slowly to breaches in regulations.
The funds raised will be used to develop new products such as derivatives, exchange-traded funds and Sharia-compliant indexes, NSE Chief Executive Peter Mwangi said in a statement late on Tuesday.
The completion of the IPO makes the NSE the second African exchange after the Johannesburg Stock Exchange to be demutualised and transition from a private, mutual company to a public, listed company.
The NSE had said it was seeking to raise 627 million shillings by selling up to 66 million new shares at a price of 9.50 shillings per share. Investors applied for 504,189,700 new shares worth 4.8 billion shillings garnering a subscription of 764 percent, and an over subscription of 664 percent.
The new shareholders will be able to trade their NSE shares next Tuesday, the NSE said.

Following the listing - planned since 2005 - the NSE shares will trade like any other company on the bourse.