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Kenya woos investors to multibillion port project, eyes trade with Sudan, Ethiopia

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NAIROBI – Kenya on Wednesday appealed to foreign investors to take up opportunities in the multibillion regional infrastructure project at Kenya’s coastal town of Lamu which is expected to transform transport in the East Africa region.

  Prime Minister Raila Odinga said Lamu Port project, officially known as Lamu-Southern Sudan Ethiopia Transport (LAPSSET), would change the way Africa relates and does business with the rest of the world as it will see Africa trade more with itself. “Many analysts in Europe and elsewhere dismiss potentials of trade with other African economies. But market in Africa is not as small as they think,” the PM said according to a statement issued in Nairobi today.

Presidents Mwai Kibaki of Kenya, Salva Kiir of South Sudan and Ethiopian Prime Minister Meles Zenawi presided over the port’s groundbreaking ceremony of the East Africa’s largest port, road and railway projects last Friday. The key project has seven components that include; construction of the Lamu Port at the Manda Bay; construction of railway line from Lamu to Isiolo, Isiolo to South Sudan, and Isiolo to Ethiopia; construction of airports at Isiolo, Lamu and Lake Turkana and construction of highway from Lamu to Isiolo, Isiolo to South Sudan, and Isiolo to Ethiopia.

The new transport corridor, whose main works is expected to take up to 30 years to be fully completed, is expected to increase Kenya’s economic growth rate from about 6 per cent to over 10 per cent. The entire project is estimated to cost 24 billion U.S. dollars. Odinga said the combined GDP of Sub-Saharan Africa is about 1 trillion dollars adding that Africa’s GDP will double to 2 trillion dollars by the end of this decade, and quadruple to 4 trillion dollars by the end of next decade.

“Africa also has enormous natural resources. We have land. Africa is one of a few countries left where population will continue to grow. This means huge and growing markets for consumer goods,” said the PM who is attending the gathering of the Crans Montana Forum on Africa in Brussels.

He lamented that the international community is often quick to pick negative perceptions of Africa and equally quick to dismiss positive steps the Continent is making. He cited under-development, poverty, and political instability as some of the myths rapidly embraced about Africa, adding that the world ought to recognise that “the Africa of today and that of yesterday are two very different continents”.

Odinga said the project, expected to provide the landlocked countries of the region with a direct and dependable route to the sea and link South Sudan, Ethiopia, as well as the entire East and Central African region to international markets, would play a critical role in the economic transformation in Africa. He said that a thriving intra-African trade and investment is necessary for the continent’s take off power, adding that such trade potential has however been frustrated by the lack of infrastructure that connects and integrates the Continent.

“I am convinced that as a result of the LAPPSET, trade and investment between our countries will reap a quantum jump. Once the LAPPSET is completed or even concurrently, we will extend the railways and highways beyond South Sudan to the West,” he said. “Our aim is to construct railways and highways that connect the Indian Ocean and the Atlantic Coast,” the PM said.

According to ministry of transport, Kenya, Ethiopia and South Sudan are expected to account for around 21 per cent, 33 per cent and 46 percent of the total freight transport volume that includes the crude oil transmission volume. Ethiopia, now landlocked and the direct route to the former Red Sea ports of Massawa and Assab literally sealed off by a hostile Eritrea, depends almost entirely on the port of Djibouti for imports and exports.

Analysts say Addis Ababa is seeking redundancy by establishing a second route to Kenya’s Indian Ocean coast to avoid potential interference with the Djibouti to Addis transport corridor which is perilously close to Eritrea and prone to be struck with relative ease.

The PM said the fact is that Africa is emerging as a global power in the economic, social as well as political spheres at a time the traditional economic powers, G7, are no longer dominant. “The G7’s share of world Gross National Income is now less than one half. Apart from the United States, economies of G7 are struggling. This is a fact we must accept,” he said. He called on investors to help African countries achieve the Green Revolution and food sufficiency. (Xinhua)

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LUKE MULUNDA
LUKE MULUNDAhttp://Businesstoday.co.ke
Managing Editor, BUSINESS TODAY. Email: [email protected]. ke
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