This archive report was first published on 26 October 2019.
As Kenya prepares to open the first phase of its multi-billion dollar Lamu Port, a key component of the Lamu Port South Sudan Ethiopia Transport (Lapsset) Corridor, it's worth examining the region's infrastructure ambitions.
Kenya's Lamu Port is set to become the second new logistics corridor in the region, following the Djibouti-Ethiopia standard gauge rail that went into service a few years ago.
However, the region's infrastructure deficit is a pressing issue, and it's not clear whether these grandiose projects are the solution.
Multiple corridors provide critical redundancy in the event of failure, but their economic efficiency needs to be looked at in more practical terms, rather than just academic theory.
For instance, the Lapsset Corridor aims to link Lamu, South Sudan, and Ethiopia along a logistics umbilical cord comprising rail, an oil pipeline, electric power, and roads.
But does it need to be this way? Probably not, because a shorter inland SGR leg would probably be better for South Sudan at this point in time, committing less capital.
Kenya also plans to build an oil refinery at Lamu, while Kampala wants one at its Hoima oil hub in western Uganda. A single refinery jointly-owned by Uganda, South Sudan, and Kenya would probably make more economic sense.
However, the region's infrastructure ambitions are being approached from the spirit of competition rather than complementarity, exposing the region to expensive infrastructure that it may never afford or sustain.
As a result, the region's countries are already saddled with worrying current account deficits thanks to a recent surge in debt-financed infrastructure projects.
Published on October 26, 2019 by The EastAfrican.
