President Uhuru Kenyatta
President Uhuru Kenyatta’s ugly altercation with Mombasa Governor Hassan Joho made headlines this week — three major dailies had the spat as the lead story on Thursday, with different versions of the President’s now infamous words to Joho: “I am not your wife!”
The President had gone to Mombasa to relaunch Mtongwe ferry services, which used to be a major link between Mombasa Island and the South Coast, but whose operations were halted in 2012.
The two old ferries in use at the time were decommissioned for being unseaworthy, and Kenyans will remember Mtongwe for the ferry disaster in 1994 that claimed 270 lives. It was Kenya’s worst maritime accident.
It comes just a few days after the President had similarly strong language for Turkana Governor Josephat Nanok. The latter had criticised government plans to amend the Petroleum Exploration and Production Bill and reduce oil share benefit to local communities to five per cent instead of the 10 per cent earlier proposed.
Much of the focus of the commentary this week has been on Uhuru’s scolding of Joho — particularly that he would choose to use the word “wife” as an insult. That choice was not accidental — such casual misogyny is ubiquitous and pervasive in the experience of most Kenyan women. In Turkana, the words “shetani” (devil) and mjinga (“fool”) were used.
But there’s more to this week’s drama than the public quarreling of the President and the governors, and it has to do with the strategic locations of Mombasa and Turkana — and their geopolitical importance for Jubilee’s second term.
In both cases, political and economic realignments outside Kenya’s borders have put pressure on the Jubilee administration, and heightened the need to exert more control on them in the short to medium-term.
Starting with Mombasa, the coastal city is the main trade gateway for Kenya, and an extensive economic hinterland in the eastern African region that includes Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo.
But the Port of Mombasa has long been chronically underperforming, in a region where port inefficiencies mean that freight costs represent 35 to 40 per cent of import costs for the region, compared to eight per cent in European ports, according to data from the African Development Bank (AfDB).
Upgrading the port has been a priority of the Jubilee government since it came into power.
‘Coalition of the willing’
In 2013, President Kenyatta — with Rwanda’s Paul Kagame, and Uganda’s Yoweri Museveni present — commissioned Berth 19 at the port and dredging of the channel to great fanfare, which would allow bigger vessels to dock.
Shipping lines benefit from economies of scale when they operate larger vessels because they can bring in more volumes, reducing the cost of shipping cargo.
At the time, Tanzania sulked and complained that it had been left out of what was called the “coalition of the willing”, but then in 2015, the “Bulldozer” John Magufuli happened.
One of Magufuli’s first orders of business as Tanzania’s President was to crackdown on corruption at Tanzania Port Authority, firing its director general, Awadhi Massawe, and the Permanent Secretary in the Transport ministry, Shaaban Mwinjaka, following the ‘disappearance’ of more than 2,700 shipping containers at the port.
The World Bank said in a 2014 report that inefficiencies at Dar es Salaam port was costing Tanzania and its neighbours up to $2.6 billion a year; Magufuli has been determined to fix that and make Tanzania, through Dar es Salaam and Tanga ports, the gateway of choice for the eastern African hinterland.
Kenya, typical in its complacency as the “leading economy in East Africa” never thought it would happen — until Uganda announced in April last year that it would export its crude oil through Tanzania instead of through Kenya, as had earlier been taken for granted.
Uganda’s decision seemed to catch Kenyan officials by surprise—- building a pipeline through northern Kenya seemed like a no-brainer, for a country that was used to being the regional “big brother”.
Uganda’s deposits are much larger than Kenya’s, and so it would make commercial sense for Kenya to piggyback on that oil and railway infrastructure that was supposed to go all the way from Hoima in Uganda, through northern Kenya, and on to Lamu, as part of the bigger Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) project. But Ugandan officials said they had decided to go the southern route because the Tanga port in Tanzania “is fully operational while Lamu port in Kenya is still to be built.”
Uganda was also worried that the northern Kenya route would run near areas close to Somalia, which might expose the pipeline to attacks by Al-Shabaab militants.
With that, the commercial viability of LAPSSET was thrown into a tailspin.
Meanwhile, Ethiopia is ramping up on infrastructure development as well, which may mean that it (as well as oil-producing South Sudan) will not need to hitch on to LAPSSET after all.
Landlocked Ethiopia has been on an intensive investment spree in rail infrastructure, with a line from Djibouti to Addis Ababa opened last year, and another project linking Addis Ababa with the cities of Jimma, Bedele and Ambo launched a few months later.
Another railway from a port in the Djiboutian town of Tadjourah port to Bahir Dar city and from the capital south to the cities of Hawassa and Arba Minch is expected to be completed by July 2020.
That has left Kenya with few options for moving its Turkana oil deposits. With neither Uganda nor South Sudan’s much larger volumes to bank on, LAPSSET’s shine has diminished considerably.
Instead of building its own pipeline or even railway, Kenya has resorted to transporting its oil exports by road, at least for now.
But even that is running into headwinds. The ambitious target of exporting the first 20,000 barrels of crude oil by May seems to be an uphill task — a 296km road linking the oil fields in Lokichar, Turkana, to Kitale is only 20 per cent complete, as of this month.
The government has now resorted to an “emergency upgrade” at a cost of $310 million.
It doesn’t help that global crude oil prices are about 60 per cent lower than when that Turkana’s oil deposits were first announced.
The low oil prices are not part of the usual commodity booms and busts that happen all the time. They have persisted since mid-2014, and are driven by technological advances in the United States that have made previously unexploitable shale deposits now commercially viable.
That ramped up production volumes, and depressed prices.
The problem with this kind of shifts is that you cannot un-invent technology, which means that even if the big global oil producers try to push up oil prices by restricting supply, it cannot work in the long term.
And to make matters worse, in the longer term, some of Turkana’s oil may not even be exploitable at all. Because of climate change, global scientific consensus is that there are hydrocarbon reserves that must remain unexploited if the earth is to escape an environmental catastrophe, otherwise termed “unburnable carbon”. At the current rates of energy consumption, unburnable carbon will be reached in just 16 years.
According to recent paper published in journal Nature, 431 million barrels of oil, or a third of global proven reserves are unburnable if climate scenarios are to hold above two degrees. The same goes of 49 per cent of proven gas reserves (or 95 trillion cubic metres) and 82 per cent of coal reserves (or 819 gigatons).
For Africa, 23 billion barrels of the continent’s oil, or 21 per cent of the continent’s proven oil reserves must remain unexploited if global temperatures are to hold at two degrees Celsius.
This is equivalent to the entire proven oil reserves of Angola, Chad, Congo-Brazzaville, Egypt, Equatorial Guinea and Gabon — combined.
Similarly, a third of proven gas reserves, or 4.4 trillion cubic metres of gas, is deemed unburnable; and for coal, which is particularly a heavy carbon polluter, 85 per cent of the continent’s coal reserves must remain under the ground.
Analysts have already started to sound the warning on a carbon bubble in the financial markets, with the risk of investors soon holding “stranded assets”.
With all these pressures, Kenya’s oil bonanza is getting more difficult to deliver. No wonder the squeezing of the oil share revenue for the local community from 10 per cent to five per cent — and the Uhuru-Nanok spat this week.
In that way, the President’s irritation in Turkana and Mombasa are not accidental. They are inextricably linked, and evidence of Jubilee’s increasing desperation for delivering a “dividend” that would secure the legacy of its second term in office.
With a rising Ethiopia, a distracted South Sudan, a “disloyal” Uganda, an increasingly assertive Tanzania, no wonder the President is grasping for control.
—Christine Mungai is a writer, journalist and executive editor of Africa data visualiser and explainer site Africapedia.com