Locking in funds Africa-style

Kenya intends to spend $25bn overall on its second major port, both to provide an export gateway for oil-rich southern Sudan but also to stimulate trade and economic development in Kenya’s under-developed northern region as well as offer landlocked Uganda an alternative port gateway.

The Kenyan government has agreed with South Sudan to build a 2,000 km pipeline to the coastal town of Lamu. This will reduce South Sudan’s dependence on having to use Sudan for oil exports, the neighbour with which it has uneasy relations and with whom it has already faced one major dispute over oil transit fees.

The Lamu project is also part of a wider plan, known as the Lamu Port-Southern Sudan-Ethiopia Transport Corridor, which aims to spur economic development in all the countries involved. The transit route could also provide farmers in southern Ethiopia, who grow crops including coffee and corn, with access to international markets and lead to further investment in Kenya’s Turkana region, the site of Kenya’s first oil find.

Another nation marching ahead with finding funds for port development is Djibouti which has plans to build five new ports in the next four years. While the country mainly serves Ethiopia in a transit trade context, it also includes in its port development plans the goal of serving South Sudan.

Earlier this year, the Djibouti Ports and Free Zones Authority reported that it had secured up to 85% of the necessary external finance, was in detailed discussions for the remainder and intended to contribute 35% of the overall funding from internal revenues. The planned new ports include Tadjourah, located on the north coast of Djibouti, for Potash and the port of Goubet for salt exports as well as the port of Damerjog for livestock.

Development strategy is coming to fruition in Africa.