East Africa’s new great oil game
Four leaders dominate the East African diplomatic chess-board, its diplomacy, its soldiering and its business interests. With new railways and road networks, together with new pipelines and electric power grids, they are forging political alliances that will allow them to reshape the region.
At international gatherings such as the African Union summit in Addis Ababa, the four gravitate towards each other: Ethiopia’s Hailemariam Desalegn, Kenya’s Uhuru Kenyatta, Rwanda’s Paul Kagame and Uganda’s Yoweri Museveni.
We have refused to be a proxy for foreign powers in this conflict. It’s a major shift in our regional diplomatic orientation
Photographers and reporters catch them sharing jokes and exchanging notes about diplomatic tactics.
Differing in age and political experience, they argue about many details but there is a critical point of consensus. If East Africa is to grasp the economic opportunities now available, there must be a determined effort to integrate its markets and economies, even if that means making concessions and compromises in the short term.
All four run interventionist foreign policies – Ethiopia, Kenya and Uganda sent troops into Somalia, while Rwandan and Ugandan troops have been both invited to and expelled from the Democratic Republic of Congo.
They all favour a statist hand on the economic tiller, but they are all building up business classes on whose political loyalty they can rely. All have supported Kenyatta in his attempts to avoid prosecution at the International Criminal Court.
Economic growth and breaking away from dependence on Western markets are common imperatives. None of them enthuse about democracy, particularly in its Western, liberal variants.
Their shared political credo is a kind of pragmatic authoritarianism. Like China’s Deng Xiaoping, they do not care whether the cat is black or white as long as it catches mice. Above all, these leaders’ solidarity is informed by a common economic interest.
As Gabriel Negatu, regional director of the African Development Bank, points out: “East Africa is the most promising regional bloc. [It] has registered between 5 and 6% growth annually for the past decade. We estimate that regional gross domestic product will expand 18-fold by the middle of the century, from $185bn in 2010 to $3.5trn by 2050. This era is comparable to the period immediately after independence.”
This economic promise is based on the depth and scale of integration, says Negatu. If Ethiopia is drawn into the East African Community (EAC), there could be a single market of more than 200 million people. Regional competition and transport links are incentives.
Although Uganda discovered oil in Bunyoro in 2006, production was delayed by disputes with oil companies over the size of a planned local refinery and pipeline routes. Following Kenya’s discovery of oil in Turkana in 2010, Kampala has speeded up its plans and signed a pipeline deal with Nairobi.
The dragon’s desire
On 5 February, Uganda signed an agreement worth more than $8bn with the China National Offshore Oil Company, France’s Total and Ireland’s Tullow to build a refinery at Lake Albert, an export pipeline to Kenya’s coast and an oil-fired power station. Such investment depends critically on integration.
“Assuming the reform agenda progresses – a moderate level of customs harmonisation and deepening of a regional trade integration – this would have a tremendous effect on regional growth,” says Angus Downie, a research analyst with the Lomé-based Ecobank.
What you are seeing today, regardless of the differences, is a strong consensus within the region to sort out our own issues
By 2020, two mammoth railway projects are due for completion: firstly the Dar es Salaam-Isaka-Kigali route; and secondly the Mombasa-Nairobi-Kigali route. The railways are two of the largest attempts at regional transformation for a century.
They are both critically dependent on China’s state-owned banks and construction companies. Through a combination of grants, loans and tied aid agreements, China is almost single- handedly reshaping the region.
“Look, even if you had four, five or six World Banks, there is no way they would have sunk in this kind of capital to individual projects in one region. There is not a bank or an international bond issue that would commit these kinds of resources to single-issue projects. It is just too risky,” says a Nairobi-based economic analyst.
He adds: “Let’s agree, despite all the talk of corruption associated with them, that these are transformative projects that the region needs.”
But the political economy is another matter: the rush for growth is sharpening inequalities and political discontent. “Not only the rate of growth matters, but also the quality. Governments need to ensure that it is shared across the board,” says Negatu.
A recent report by the Society for International Development sounds alarm bells: “The trouble in East Africa is that the speed of change is overwhelming the capacity of the industrial and service sectors to provide the jobs and alternative livelihood opportunities.”
Elsewhere, it says: “A formal wage-paying job is a privilege for a tiny minority of East Africa. Just 1.6% of Uganda’s, 4% of Burundi’s, 5% of Tanzania’s and 6% of Kenya’s working populations are formally employed.”
Social contract unravelled
Without adept political management, the prospect of economies expanding quickly but without a commensurate increase in jobs would worsen inequalities and social tensions. Fast-growing cities such as Nairobi and Kampala are drawing in migrants from across the region, but very few formal jobs are available.
Instead, the shanty towns expand inexorably, housing disenchanted new arrivals who feel cut off from the new economy. Providing them with basic state services and jobs will test the ingenuity of governments.
For governments tempted to ignore the new underclass, South Sudan serves as a cautionary tale. An abiding weakness of governments in East Africa is their ethnocentrism: their tendency to favour crassly their ethnic support bases in the allocation of public sector jobs, appointments, commercial opportunities and government tenders.
South Sudan’s crisis may have been exacerbated by its weak institutions, but the best illustration of this was the government’s failure to rein in cronyism, corruption and ethnic rivalries in the state sector.
In South Sudan, these weaknesses caused a war. In other countries in the region, they produce bad elections and policy-making, and hold back burgeoning economies.
The ugandan play
The explosion of fighting in South Sudan in December 2013 has produced much soul searching and ad hoc diplomacy. Every supporter of Africa’s newest state believed they had a right to admonish and advise the two war- ring sides, much to the irritation of East Africa’s leaders.
“People say that South Sudan is a failed state. I disagree. South Sudan is a state that never was,” says Mabior Garang de Mabior, son of Sudan People’s Liberation Movement founder John Garang and a member of former vice-president Riek Machar’s negotiating team.
“The first republic of South Sudan is dead. We should now begin considering how to constitute the second republic,” he argues.
Beyond clashes between the supporters of Riek and President Salva Kiir, South Sudan’s crisis is testing the solidity of regional diplomacy. The biggest danger is that the national conflict could escalate and draw in countries from the region.
Immediately problematic was the continued presence of Uganda’s troops, with their avowed mission to shore up Salva’s government. The January ceasefire agreement contained a clause about withdrawal of foreign troops, but its ambiguity has allowed Juba and Kampala to ignore it.
How the Ugandan troops issue is handled will determine the direction and duration of the crisis, according to officials at the Intergovernmental Authority on Development (IGAD), the eight-member regional development and security body.
President Museveni mounted a robust defence of the role of Uganda’s troops in South Sudan in January, finding a justification in the region’s interlocking linguistic, ethnic, political and economic relationships.
At a meeting in Angola of the International Conference on the Great Lakes Region, Museveni described the region’s problems as ideological and organisational but criticised politicians for lacking discipline: “The manipulation of tribes and religions is a pseudo ideology – is a false ideology – not reflecting the interests of the people but hose of the opportunists and parasites spurred on by foreign interests.”
Arguing for the interdependence of the region, he continued: “With the conflicts in eastern [Democratic Republic of ] Congo and South Sudan, the food prices in Uganda have collapsed to the detriment of the farmers that were getting used to the higher prices because of the bigger demand in the region.”
However, Uganda’s neighbours worry about the risks of the South Sudan conflict spreading and undermining regional integration.
“If violence continues and escalates, we don’t want proxy militias acting on behalf of individual countries. That’s our main fear at the moment,” says a Kenyan diplomat in Nairobi who requested anonymity. He refers to the risk that Khartoum’s Islamist regime might exploit the South Sudan crisis for its own ends. It was that risk that partly motivated Kampala’s intervention.
The individual power plays within the region are a threat to the East African integration project.
Last year, Tanzania’s President Jakaya Kikwete urged dialogue between Kagame and the rebels in the Forces Démocratiques de Libération du Rwanda, precipitating a cold war within the EAC.
Frustrated by Tanzania’s hesitancy to fast-track regional integration, Rwanda, Uganda and Kenya formed a ‘coalition of the willing’ that briefly threatened to break up the EAC. Uganda’s intervention in South Sudan and Ethiopia’s increasing impatience with Museveni’s intransigence on troop withdrawal are exposing similar fault lines.
Of proxies and brokers
“A split within IGAD is problematic. Kenya is desperately holding on to an honest broker position. We have refused to be a proxy for foreign powers in this conflict. It’s a major shift in our regional diplomatic orientation,” says the Kenyan diplomat, who is eager to shake off his country’s role as a Western client state.
Museveni has been strengthened by Uganda’s intervention and its close relations with the factions of the ruling Sudan People’s Liberation Army according to an analyst in Kampala, who adds: “Meles [Zenawi] is gone; Gaddafi and Mubarak are gone; Obasanjo and Mbeki are gone. When Museveni now looks across the political landscape he only sees one potentate… himself.”
Other diplomats argue that Uganda’s speedy intervention prevented much worse bloodletting in South Sudan: “If Museveni had not gone in when he did, it would be Salva in the bush right now. That was the difference.”
Is the region, after a decade of peace and relative stability, staring at a possible return to a chaotic past? It is not an easy question to answer, says Martin Kimani, Kenya’s ambassador to the United Nations in Nairobi and the government’s point man in the South Sudan crisis.
“This crisis actually gives South Sudan the opportunity to rebuild itself in its own image,” says Kimani. The crisis also represents the end of the road for the West’s state-building project in the South financed by billions of aid dollars.
A successful resolution of the crisis would be a victory for regional diplomacy.
“What you are seeing today, regardless of the differences, is a strong consensus within the region to sort out our own issues. There is no leader in the region that has proclaimed any support for a violent takeover in Juba. That is a major achievement,” says Kimani. ●