Tag Archives: Rift Valley Railroad

Weekend Reading

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“How Africa’s most threatening terrorist group lost control of Somalia” in The Atlantic.

Kenya signs deal with China to build standard gauge railroad from Mombasa that would complete with lagging Rift Valley Railroad concession. The East African

Around the Bend

Kenya teachers strike to enter its fourth week Monday.Business Daily

“For Ethiopia’s new premier, a tightrope act” Africa Review.

Hailemariam, Meles Zenawi’s deputy, was last week finally elected chairman of the Ethiopian People’s Revolutionary Democratic Front (EPRDF) after a furious behind-the-scenes battle for control of the powerful ruling party.

He was consequently due to be sworn in on September 21 as prime minister in what is the first peaceful and constitutional power transition in Ethiopia’s recent history.

The new premier would be in place until the next general election set for 2015, a tenure probably too short to consolidate any meaningful political base and influence, suggesting an authoritarian Meles-like approach to matters of government would leave him vulnerable.

His appointment is also a major milestone in Ethiopian politics as it marks the first time a minority ethnic group has ascended to power in the country’s modern history.

All Ethiopian leaders have tended to emerge from the north, particularly the Amhara and Tigray ethnic groups. Hailemariam is from the marginalised Wolyta ethnic group of the South. He is also a Pentecostal Protestant adherent, unlike his predecessors who have all been Coptic (Orthodox ) Christians.
. . . .

Hailemariam would be less impressive on the international stage such as the G8 or UN climate summits where his predecessor excelled as he spoke on behalf of the continent, but western allies mainly the US have reaffirmed their cooperation with Ethiopia.

President Barack Obama spoke with Hailemariam early this month.

But at home, the new man at the helm faces an uneasy two years ahead, with ruling party confrontations and government power squabbles, already simmering under the surface, prone to erupting into the public domain.

Political and economic competition between the old guard and the new leadership could deepen existing fault lines, and for many Ethiopia watchers, it is only a matter of time.

Any divisions in the authoritarian ruling party tends to greatly affect Ethiopia’s political sphere, and Hailemariam will need to be adept at putting together smart compromises, unlike Meles who is remembered for running a one-man show, and with an iron fist.

“In Uganda, mixed reactions to Africa’s youngest MP” VOA

Corruption and Geopolitics

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The Economist has highlighted the ongoing competition in Africa, including in Kenya, between Iran and Israel: “A Search For Allies in a Hostile World“.  In the East Africa/Greater Horn region, Sudan is Iran’s key ally and Ethiopia is Israel’s.

With diplomatic battles approaching over sanctions for Iran’s nuclear program in the context of all of the existing competition for influence, resources and business opportunities, the leverage for existing African players to extract corrupt rents are likely to increase. The Kenya Publicity Tour to Washington last week invited the US to once again move away from a strong stand on corruption and move on with greater government to government support and incentives for investment without waiting to see actual reforms in light of the 2007 election debacle.

To date we haven’t seen accountability for the multi-year theft of public education funds that triggered first the UK and then the US to freeze a small amount of education assistance.  While the PM and others are pressing for the resignation of the Education Minister, the funds have gone missing each year of the first Kibaki Administration as well, as indicated in the report from Transparency International.  Removing the current minister (who presumably would remain a Member of Parliament and, if patterns hold, soon enough get another ministerial appointment in another agency) is not a substantive answer.

Likewise, action on the Rift Valley Railroad concession remains elusive and deferred.  And accounting for the “Internally Displaced Funds” associated with the “Internally Displaced Persons” from the post-election violence remains outstanding. And the bills continue to come due, literally, from the Anglo Leasing scandal (you may remember this as the scandal that was supposedly caught in time to prevent major loss to the taxpayers–doesn’t seem to be working out that way).

Key players, at least, in the US government supported Kibaki’s re-election in 2007 in spite of the corruption concerns. Is Kenya better off now? What US interests were actually advanced? In particular, how is the situation in Somalia better now than it was in the fall of 2007? Let’s “don’t get fooled again” and maintain a focus on helping Kenyans who share the values to which we aspire to build a stronger and more prosperous country–by maintaining a strong and steady focus on improved governance and fighting corruption. We have a bad record on the geopolitical gamesmanship in Kenya, in my estimation, and values aside, I don’t think it has worked very well.

Working on(or over?) the Railroad–“What is emerging as one of Kenya’s most infamous privatisation scandals” and “the new scramble for Africa”

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In the category of: Now They Tell Us—

The Daily Nation is replete with stories and commentary on the Mombasa-Kampala railroad and the various claims and disputes among the parties to the Rift Valley Railroad concession, granted in 2005 for a term of 25 years and reporting about the original “wheeling and dealing” that set up the current failure of the operation.

Today’s installment asserts “Future of Rail Firm to be Decided Wednesday” at a meeting between the Kenyan and Ugandan governments and feuding shareholders.

When Kibera slum dwellers uprooted the railroad tracks during the 2008 post-election violence, it seemed to be taken by some from the West as confirmation of a violent and uncontrollable nature of the Opposition, as well as perhaps by some as consistent with certain ethnic stereotypes–and was said to be be a major international incident due to reduced supplies to Uganda, Rwanda and Burundi. Unfortunately, it would appear that even greater property damage has been done–albeit more genteelly and more discretely, by better dressed people with a lot more money–over a period of years in the privatization. I say nothing in defense of vandalism here, but just simply point out that some forms of property destruction get condemned while others get financed.

How plan to privatize railways became Kenya’s public sector reform nightmare; Desire to save face traunched the reality that Kenya and Uganda were handing over a national asset in a fundamentally flawed deal

The World Bank extended a Sh6 billion loan to pay off the sacked workers. But, despite all these concessions, Mr Puffet turned up with an empty pocket on November 1.

According to experts who have been involved in such deals, it would have been possible to detect that Mr Puffet did not have money right from the start if the due diligence conducted was thorough and if the Treasury had demanded for guarantees that the money is available.

To save the situation, the governments and the International Finance Corporation (IFC), which is owned by the World Bank, hastily amended the contracts by introducing two legal devices that would enable Mr Puffet to raise the money required in 30 days before he could be handed over the railway.

Mr Puffet and his financial adviser from PWC, Mr Vishal Agarwal, started by knocking on the usual doors looking for the cash at firms such as major private equity shops and investment houses, but many could not touch the deal — despite the world then being awash with excess money — because either the window to close the deal was too short, or they were put off by the political risk and the shareholding squabbles that plagued Rift Valley Railways (RVR).

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