African Trade: After Rwanda, Uganda snub Kenya targets Ethiopia for rail and pipeline deals

By Fred Oluoch
Kenya is seeking Ethiopia’s participation in regional infrastructure projects after Uganda and Rwanda pulled out of the joint oil pipeline and the standard gauge railway.

In a bid to stem its increasing isolation in the region, President Uhuru Kenyatta invited Ethiopian Prime Minister Hailemariam Desalegn for a three-day official visit last week.

The visit saw the two countries agree to fast-track the construction of an oil pipeline from Lamu Port to Addis Ababa by the end of 2016, as well as a Joint Railway Commission that links the two countries.

Ethiopia now provides the much desirable fallback position after Uganda first pulled out of the joint crude oil pipeline to Lamu in favour of the Tanga Port in Tanzania, while Rwanda said it was weighing its options on a rail link to either the ports of Tanzania or Kenya.

According to President Kenyatta’s spokesman Manoah Esipisu, the discussions focused on the speedy implementation of a special status agreement (SSA), reviewed the progress of the ongoing Lamu Port and Lamu South Sudan, Ethiopia Transport (Lapsset) and other energy-related projects and sought stronger co-operation on border management and in reducing human trafficking.

The SSA covers trade, investment, and infrastructure and food and cross-border security.

The $23 billion Lapsset will now get a new lease of life as the two countries strengthen the SSA signed in 2012 and fast-track related projects.

President Kenyatta said there will be a special focus on completing the Lamu and Isiolo airports to improve aviation links with Ethiopia. The two countries signed five MOUs to co-operate in the oil and gas sector, health, sports, education and livestock.

Free movement
The two countries also agreed to speed up the construction of the Moyale One Stop Border Post, which will facilitate the movement of people, goods and services and work towards progressive tariff concession.

Kenya is also negotiating for flexible visa conditions for its investors in Ethiopia.
Increased bilateral relations will benefit both countries as Kenya is looking to secure a larger market for its companies in Ethiopia — the second most populous country after Nigeria — while landlocked Ethiopia wants to have an alternative transport corridor, to Djibouti Port for its goods.

Kenya is seeking to penetrate Ethiopia’s manufacturing, agribusiness, financial services, and telecommunications sectors. But Ethiopia still prohibits foreign participation in its trading, financial services, transport and telecommunication sectors.




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