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Kenyatta’s visit clears oil, trade huddles

By Agather Atuhaire

President Uhuru Kenyatta and President Yoweri Museveni’s talks during the former’s three-day visit cleared huddles that could make trade between the two countries smoother.The major outcome of the talks was the agreement between the two presidents over the route of the planned oil pipeline expected to cost about US$5 billion.

The Presidents settled on the northern route, Hoima -Lokichar-Lamu, clearing a statement that oil companies say was one of the main reasons holding back their final investment decision on developing discoveries in the two countries.

A State House press statement noted that the agreement is subject to Kenya guaranteeing among others, security on the Kenya side of the pipeline, financing of the project, transit fees/tariffs in any case not higher than would be payable on an alternative route and implementation of the project without further delay.

Kenya has been pushing for this route because it is critical to its major infrastructure project—LAPSSET, which is planned to connect East Africa’s biggest economy to South Sudan, Ethiopia, and now Uganda.

Agreeing on the pipeline route also moves Uganda a step close to commercialisation of its oil reserves. Uganda has discovered about 6.5 billion barrels of oil.  On the refined products pipeline from Mombasa via Eldoret to Kampala, the two presidents agreed to develop a reverse flow petroleum product pipeline capable of transporting imported petroleum products to Uganda and also exporting from the refinery in Uganda to Kenya.

“President Museveni expressed his government’s desire to develop the least cost route to transport her oil to the East African coast,” the State House presser noted.

The decision on the route comes a year after Japan’s Toyota Tsusho was contracted to produce a feasibility study. Completion of the pipeline is expected before 2019—around the same time oil could start flowing.Apart from the pipeline, Kenya and Uganda are also working on the development of northern corridor projects which include a standard gauge railway from Mombasa to Kampala and to Kigali.

“With its completion,” Kenyatta said, “the standard gauge railway will dramatically reduce cargo transport costs by 60%.”

Museveni agreed with the Kenyan President saying that the completion of the railway will ensure that cargo from Mombasa to Kampala takes 24 hours from the current three days. Such projects are expected to be a trade game changer.

Kenyan exports to Uganda are estimated at US$ 700 million compared to imports worth USD 180 million. A host of Kenyan companies including Kenya Commercial Bank, Equity Bank and Uchumi are major operators in Uganda making Kenya, the largest regional investor in East Africa.

President Museveni commended President Kenyatta for implementing initiatives that are bridging the trade gap.

The two presidents observed that bilateral trade has potential to grow further and reaffirmed their commitment to the free movement of goods, labour and services, including the elimination of all trade barriers.During his visit, President Uhuru Kenyatta toured CIPLA Quality Chemical Industries, a Pharmaceutical plant manufacturing Anti-Retrovirals (ARVs) and Anti-Malarial drugs.

President Uhuru also addressed a Business Forum which was attended by the private sector from the two countries. He encouraged the use of Forums to strengthen economic cooperation through establishing networks and partnerships to stimulate innovation and competitiveness in businesses. Uhuru also witnessed the signing of a Memorandum of Understanding between the Uganda National Chamber of Commerce and Industry (UNCCI) and the Kenya National Chamber of Commerce and Industry (KNCCI) to promote common interests

They welcomed the establishment of the Uganda-Kenya Joint Ministerial Commission as an important framework for deepening and expanding bilateral cooperation.

Such a platform is expected to deal with issues like the trade disputes over sugar exports into Kenya from Uganda, treatment of Ugandan cargo importers at the port of Mombasa and restrictions by Ugandan Authorities on Kenyan beef and cigarette exports. Since 2013 when he ascended Kenya’s presidency, Kenyatta has been one of the biggest enthusiasts of the East African integration. He has on several occasions said that East Africa will not attain the desired levels of prosperity if it does not work together. A view Museveni shares and preaches all the time.

“When we talk of integration we talk of families of Africa, businesses in Africa to transform to a modern and prosperous region,”  President Museveni said on Aug.10 before inviting Uhuru to address the Ugandan parliament, “Secondly, Security; the Americans these days are talking of superiority on land, in air, on sea. We should also be focusing to achieve this.”

Presidents Museveni, Uhuru, and Paul Kagame of Rwanda formed recently drove an aggressive tripartite initiative for fast tracking integration when their colleagues Tanzania and Burundi appeared to lag behind. They had about four meetings under this arrangement.When he addressed parliament, Uhuru emphasised the need for cooperation and strong partnership if the region is to overcome the challenges that have hindered them from attaining socio-economic independence, 50 years after gaining independence from its colonial masters.

“There’s an African proverb which says that if you want to go fast, move alone but if you want to go far, move with others,” Uhuru said adding that the East African countries were already growing at the same pace as the Asian tigers did.

“We understand that the only way to catch up with them is to produce more goods and services that are globally competitive,” Uhuru said, “to trade more regionally, and to access exponentially greater amounts of investment. Our partnership as countries is critical in making this happen.”

The tripartite initiative also had in mind the idea of increasing and sharing power generation to improve industrialisation. Kenyatta said that the two countries together with their partners are still working towards that endeavor.

“We are looking at ways of making transmission and interconnectivity reliable and broadly accessible,” he said.

Uhuru also commented on the aspect of security and stability of the region’s neighbouring countries, which he said was important if the region was to achieve the goals it has set. “Our neighbours in South Sudan, Burundi and DR Congo are also facing major security challenges and our dreams of becoming a prosperous hub will never become a reality if our neighbours continue to have instabilities,” he said.

He says it is the job of Kenya and Uganda to work towards forging the security and stability that will promote sustained peace in the region.Kenya and Uganda are already leading initiatives aimed at restoring peace in Somalia, South Sudan and Burundi, where Uhuru said they will remain on the frontline until peace is realized.“Our armies stand shoulder-to-shoulder in Somalia battling a foe whose only aim is the destruction of hope and the bitter division of our people according to their faith,” he noted.He says that corruption has, both in Uganda and Kenya, remained a stumbling block and has damaged the ability to grow at the desired pace.

“We in Kenya and Uganda must remain steadfast in fighting this vice because it is one battle that we must win,” he said.

He called upon all players including civil society and the opposition to work towards achieving these objectives saying that they are not limited to those in power.

Although he recognised the importance of democracy he urged the citizenry not to misuse and misinterpret it to mean using distortions and lies to paint governments as failures.“We must be able to make political progress without destroying our countries in the process,” Uhuru said, “a living democracy is anchored in love of country, respect for those with different views, an adherence to debate based on facts, and a willingness to learn from one another.”

Kenyatta also extended an invitation to President Museveni to visit Kenya on a date to be mutually determined through diplomatic channels.

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