Friday, March 2, 2012

Kenya's Big Port Gamble

Amid much fanfare and in the presence of international dignitaries, Kenya broke ground today on a major port complex that, if successful, could propel the country into the ranks of “developed” nations and serve as a catalyst for regional stability.  Or it could also turn into a multi-billion dollar boondoggle for the East African nation....

The port complex near the town of Lamu on the Indian Ocean coastline in southern Kenya will be the country's largest-ever infrastructure project, with initial construction costs budgeted at a whopping $24.5 billion.  It will include berths for 32 ocean-going ships along with an oil export facility.  But the port will not just be for Kenya's benefit – a new railway, super-highway and oil pipeline will link Lamu to Ethiopia and South Sudan as well.

This last link is especially important.  When South Sudan left Sudan last summer, they took with them the bulk of Sudan's oil reserves.  The South Sudanese economy is almost totally reliant on oil sales for revenue, but all of the existing infrastructure links South Sudan's oil fields with refineries and export terminals in Sudan.  When South Sudan embargoed shipments of oil north to Sudan over a payment dispute earlier this year, there was some fear that the dispute could reignite fighting between the two sides – South Sudan previously fought a decades-long war for independence against the Khartoum-based government in the north.

For South Sudan Lamu represents nothing short of an economic lifeline, a way to export their only commodity while avoiding the bottleneck in Sudan.  South Sudan's President Salva Kiir was on hand for the official groundbreaking along with his counterpart, Ethiopian Prime Minister Meles Zenawi – Ethiopia lost their own Red Sea coastline following the independence of the region of Eritrea in 1993.  For their part, Kenya is banking on Lamu to help to move them towards their goal of being considered a developed nation by 2030.

There are, however, some problems with the Lamu project.  It is a huge expense for Kenya to undertake right now, despite the potential it provides for future economic growth; those projections though are speculative, Kenya is assuming that Lamu will become a transportation hub in the decades to come, something that is far from a sure bet.  Pristine mangrove forests and coral reefs are being destroyed so that the port facilities can be constructed, leaving environmentalists to worry about the long-term impacts the project will have on the local ecosystem.  And according to the BBC World Service, the indigenous Lamu people opposed the project as an unnecessary seizure of their historic lands.  The Lamu have also said that they have not been adequately compensated for their losses because land in their society was traditionally handed down through extended families by custom and without official land deeds, meaning official ownership of much of the land was difficult, if not impossible, to prove.

But the Lamu port project is moving forward, whether it becomes the catalyst for regional development and stability that leaders promised at the groundbreaking remains to be seen.
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