Is Tanzania ousting Kenya as East Africa's powerhouse?

[Xplorer]

Kenya needs to rethink mega projects and their benefits



In Summary
It may soon dawn on us that not only was the SGR a very bad idea, but that it will put the country in such serious debt that Kenya could soon be rushing to the International Monetary Fund for a bailout loan.
By Rasna Warah


The decision by Uganda and Rwanda to ditch Kenya’s proposed oil pipeline in favour of Tanzania’s should ring alarm bells in terms of what this means, not just for the economy but for the viability of the standard gauge railway that is being touted by the government as a game changer.

It may soon dawn on us that not only was the SGR a very bad idea, but that it will put the country in such serious debt that Kenya could soon be rushing to the International Monetary Fund for a bailout loan.

Huge loans

Already the IMF has warned Kenya that the country’s debt burden and the huge loans from China can bring the country’s debt to unsustainable levels.

By arrogantly excluding Tanzania from discussions and assuming that it could play big brother to its neighbours, Kenya shot itself in the foot and lost the goodwill that it took for granted.

Kampala and Kigali probably realised that Kenyans had been taken for a ride and, therefore, put their heads together and decided that rather than rely on Kenya for its transport needs, it should turn to Magufuli’s Tanzania.

At least Tanzania does not have the perennial conflicts that Kenya seems to have every election cycle and with less corruption, Ugandan and Rwandan goods will probably be safer and cheaper to export and import from there.

The question we must ask now is whether the Chinese hoodwinked us into undertaking the SGR project knowing full well that it was not viable.

A couple of years ago, public policy consultant Kiriro wa Ngugi and economist David Ndii warned Kenyans that the SGR was a scam that would likely negatively impact coming generations for decades.

At an Ufungamano multi-sectoral forum, Ngugi demonstrated why the reasons used to justify the SGR do not make sense.

One of the justifications — that a high-speed railway will move more cargo in a shorter period of time — does not take into consideration the fact that high-speed railways are better suited for passenger services, not cargo.

In Japan, for instance, all high-speed trains are for passengers only.

One important reason countries decide to choose a particular type of rail network is because it is compatible with rail networks in neighbouring countries.

It does not make sense to build an SGR when the countries it is supposed to be linking with are still using metre gauge railway networks.

What would have made more sense, argued Ngugi, is if we upgraded the existing metre gauge railway network from Mombasa to Kisumu, which would be a much cheaper and more efficient option.

A World Bank study estimated that the upgrading and refurbishment of the existing railway line would cost about Sh150 billion, compared to the Sh1 trillion that will likely be spent on the SGR if the line extends from Mombasa to Malaba.

This is what Brazil did with its metre gauge railway network, which carries millions of tonnes of cargo quite efficiently.

Upgrading could have been funded by levies from the cargo itself rather than through huge borrowing from foreign banks.

One also wonders why the existing network, which is of immense historical and sentimental value to Kenyans, was abandoned in favour of a completely new one.

The secrecy around the SGR’s engineering and design plans also means that the public does not know for sure what the quality of the end result will be.

From the looks of it, Kenya may soon no longer be the economic powerhouse of the region.

I recently read a research paper by the Brookings Institution that showed that Kenya’s economy has not transformed in any significant way in recent years despite reasonably healthy economic growth rates.

The share of manufacturing output has remained stagnant and in agriculture, the country’s mainstay, productivity remains low.

In addition, the country’s “fragile democracy” poses a serious challenge to sustained economic growth.

Terrorist attacks have also impacted growth and high levels of unemployment among youth threaten security further.

Economic advisers

President Uhuru Kenyatta’s economic advisers have clearly not spelt out these challenges to him, nor have they given him a true assessment of the real cost of the mega infrastructure projects that his government has undertaken, and which show no signs of paying serious financial dividends in the near future.

Rasna Warah is an analyst and commentator based in Nairobi. rasna.warah@gmail.com

 

[Towashi wa 2]

Tuache porojo wabongo,kuipita kenya ni ndoto kwa miaka ya hivi karibuni unless tumegrow uchumi kwa zaidi ya 10% sasa kwa sera za ujamaa na vipaombeleless tena numerous tutafikaje? Ethiopia imekuza uchumi kwa double digit kwa mda mrefu ndio maana inaipumulia kenya kisogoni,yet bado ghana,tunisia,sudan na ethiopia

 

[Eyce]

Look at the pic, look at all the countries in top 10, all the countries have vast mineral resources, atleast 75% of their exports are natural resources... all those countries except for Kenya. we got there by working on 30% of our land mass. our greatest asset bieng only the sweat of our human capital. you bettet hope kenya never developes its semi-desert areas to become productive and livable for the rest of kenya to disparse. or also better hope kenya never discovers vast mineral resources.

For tz to get to kenya, you'll have to go thrue ethiopia, ghana, Tunisia, Lybia... are you up for it?


and yes, from the worldbank website it looks that way, that in % terms, more kenyans live under the dollar..... but I give you homework, go to the world bank site and click that place that talks about poverty but instead of using the deault 1 dolla a day, raise the criteria to 2dollars a day and see what happens, on the kenyan site, the population living below 2 dollars a day is still less than 50, but on the tanzanian site , it suddenly moves to 70% of the population ! our middle class is way bigger than of the rest of EA combined....... So bitch please. Kenya is working to getthe rest of the minority out of poverty, while tz is working to get atleast a simple majority into middleclass

Wakati Tanzania inawekeza nguvu zake katika kuikomboa Afrika...kenya ilikuwa busy kuukomaza uchumi wao katika capitalism...
guess ilikuwa ni isolation policy kama ya u.s.a

Wakati Tanzania inaingia katika socialism na kuanguka nayo...kenya ilikuwa busy inakomaza uchumi wao

Wakati Tanzania inapigana vita vya uganda... kenya ilikuwa inaukomaza ubepari na uchumi wake..guess mlikuwa hata masuppliers

Wakati former EAC inaanguka....who benefited more
[emoji15] [emoji15] [emoji15] [emoji15] [emoji15] [emoji15]

guess natural resources ni only factor for the development.....
Tanzania imepitia nyakati tofauti hadi kuwa hapa lakini what about kenya ambayo kila siku hulilia uchaguzi uliopita

 

[Eyce]

Tuache porojo wabongo,kuipita kenya ni ndoto kwa miaka ya hivi karibuni unless tumegrow uchumi kwa zaidi ya 10% sasa kwa sera za ujamaa na vipaombeleless tena numerous tutafikaje? Ethiopia imekuza uchumi kwa double digit kwa mda mrefu ndio maana inaipumulia kenya kisogoni,yet bado ghana,tunisia,sudan na ethiopia

Unaijua Tanzania vizuri maana nisije kumuelimisha mtu aliyeishia dar alafu akahisi anaijua Tanzania vyema..... totally wrong

 

[Xplorer]

Tanzania's Promising Future

By Peter Kohli, June 03, 2016, 08:53:27 AM EDT

The article that piqued my interest, was one asking the question if Tanzania is the Switzerland of Africa? It’s an interesting article, written by a political science professor from LaGrange College in Georgia and his opening paragraph made me read on. “The East African country of Tanzania has long been considered an island of stability where chaos appears to reign across the continent, and even its region of East Africa.”

I decided then to do some of my own research to see if I could validate his thesis and also because of all the bad news coming out of that continent. A government trying to do the right thing by its people should be highlighted because it is a rarity, not just in Africa but globally.

The recent discovery of natural gas has given a boost to the strategic importance of the country and will no doubt transform the economy, from one based heavily on agriculture, which contributors about 25% of the GDP. By recent estimates the natural gas reserves are in the range of between 55 and 60trillion cubic feet, which if converted, would be equivalent to more than 12 billion barrels of oil.


The one thing that Tanzania needs to do though, is to manage the resources efficiently and effectively. This I believe will happen under the administration of the new president, John Magafuli, who was elected on the 29 of October 2015 with 58% of the vote. He is known to be a devout Catholic and corruption free and ran on a message of stamping out corruption.

He has also earned himself the nickname ‘bulldozer’ for his determination to build roads across the country. He is committed to improving the education standards and development of Tanzania’s natural resources to benefit the population.

The Tanzanian GDP for the last quarter of 2015 grew at a rate of 7.1% due to substantial increases in defense, communication, financial, and insurance sectors. Recently, according to Bloomberg, the government has been advocating insurance companies to merge in order to strengthen the industry, so that they can adequately service the upcoming boom in the energy sector. To that end, Lloyds of London has sought a license to operate in Tanzania.

The Dar es Salaam stock market benchmark index (DARSDSEI) has a year to date return of 5.28%, with standouts being the Tanzania Cigarette Company (TCC:TZ), Swissport Tanzania (SWIS:TZ), and National Microfinance Bank (NMB:TZ). With the recent discovery of natural gas and political stability in the country, Tanzania seems to have a very promising future, and as far as being called the Switzerland of Africa, I will have to leave that for others

 

[maulana majaliwa]

Kwa serikali hii ya awamu ya 5 ya ukusanyaji kodi kwa bidii kubana matumizi yasiyo ya lazima na kuelekeza fedha kwenye miradi ya maendeleo niwazi hatua kadhaa za maendeleo lazima zitapigwa

 

[Towashi wa 2]

Tangu lini contraction policies zikaleta maendeleo? Hizi hua ni sera za kuokoa jahazi lisizame,usitegemee kubinya alafu eti uchumi utapanuka sahauni.Gesi haiwezi leta maendeleo ni kama precious metals zingine ambavyo hazijaleta maendeleo,mbaya zaidi tuna deficit ya economic strategic thinking/priorities rationality as far as positive economic externalities and multiplier effects are concerned.

 

[Kafrican]

Wakati Tanzania inawekeza nguvu zake katika kuikomboa Afrika...kenya ilikuwa busy kuukomaza uchumi wao katika capitalism...
guess ilikuwa ni isolation policy kama ya u.s.a

Wakati Tanzania inaingia katika socialism na kuanguka nayo...kenya ilikuwa busy inakomaza uchumi wao

Wakati Tanzania inapigana vita vya uganda... kenya ilikuwa inaukomaza ubepari na uchumi wake..guess mlikuwa hata masuppliers

Wakati former EAC inaanguka....who benefited more
[emoji15] [emoji15] [emoji15] [emoji15] [emoji15] [emoji15]

guess natural resources ni only factor for the development.....
Tanzania imepitia nyakati tofauti hadi kuwa hapa lakini what about kenya ambayo kila siku hulilia uchaguzi uliopita

Hayo umeongelea yote ni kelele za nyani anaposhindwa kuparaga mgomba..... tushawahi jadili hayo yote hapa jf na tukadhihirisha ilikua uongo mtupu. enda ukaangalie uchumi wetu na wenu tangu muaka wa 1963..... hapo mwanzoni tulikua hatujaachana mbali..... alafu pia sisi tulikua na shida zetu ambazo zilikua na impact kubwa kiuchumi kuliko hata hizo zenu za 'tulisaidia nchi kupata uhuru', baada ya uhuru, kenya ilikua na shifta insugency, baada ya hapo kenya ilikumbwa na janga la ukame mkali zaidi ambapo tulipoteza asilimia 70% ya ngombe na mbuzi zetu na uchumi wetu ulidorora, wakati wa moi ambae aliongoza kwa miaka 24, uchumi wetu ulikua haukui, tulibaki almost stagnant....

hapa Eastern Africa, Ethiopia imesadia nchi nyingi za africa kuliko nyengine, imepigana kivita kwa miaka mimngi kuliko nchi nyengine, Sudan pia imepatwa na shida zake nyingi sana ya vita vya ndani kwa ndani, vyengine hata vikasababisha igawanyike mara mbili, lakini hizo nchi zote ziko na uchumi mkubwa kuliko tz na hauni zikilialia eti hoo, sisi tulifanya hivi na vile

 

[Xplorer]

Hayo umeongelea yote ni kelele za nyani anaposhindwa kuparaga mgomba..... tushawahi jadili hayo yote hapa jf na tukadhihirisha ilikua uongo mtupu. enda ukaangalie uchumi wetu na wenu tangu muaka wa 1963..... hapo mwanzoni tulikua hatujaachana mbali..... alafu pia sisi tulikua na shida zetu ambazo zilikua na impact kubwa kiuchumi kuliko hata hizo zenu za 'tulisaidia nchi kupata uhuru', baada ya uhuru, kenya ilikua na shifta insugency, baada ya hapo kenya ilikumbwa na janga la ukame mkali zaidi ambapo tulipoteza asilimia 70% ya ngombe na mbuzi zetu na uchumi wetu ulidorora, wakati wa moi ambae aliongoza kwa miaka 24, uchumi wetu ulikua haukui, tulibaki almost stagnant....

hapa Eastern Africa, Ethiopia imesadia nchi nyingi za africa kuliko nyengine, imepigana kivita kwa miaka mimngi kuliko nchi nyengine, Sudan pia imepatwa na shida zake nyingi sana ya vita vya ndani kwa ndani, vyengine hata vikasababisha igawanyike mara mbili, lakini hizo nchi zote ziko na uchumi mkubwa kuliko tz na hauni zikilialia eti hoo, sisi tulifanya hivi na vile

Nyie mmegundua 600million barrels of oil mmepiga kelele hadi dunia nzima imejua,while our gase deposits is equivalent to 12bn barrels of oil yaani ni mara mbili hata ya ile ya Uganda na bado tumetulia tu tunapiga hatua kimyakimya.

 

[saadeque]

Nyie mmegundua 600million barrels of oil mmepiga kelele hadi dunia nzima imejua,while our gase deposits is equivalent to 12bn barrels of oil yaani ni mara mbili hata ya ile ya Uganda na bado tumetulia tu tunapiga hatua kimyakimya.

what is the monetary value of that gas and our oil..Tuanzie hapo mwanzo

 

[Kafrican]

Nyie mmegundua 600million barrels of oil mmepiga kelele hadi dunia nzima imejua,while our gase deposits is equivalent to 12bn barrels of oil yaani ni mara mbili hata ya ile ya Uganda na bado tumetulia tu tunapiga hatua kimyakimya.

sasa ya oil yametoka wapi?

anyway, sisi husherehekea kila jambo zuri linalo kumba kenya, mambo ya voliboli, raga, mbio, criketi,... kwahivyo si jambo la ajabu tukisherekea $10Billion worth of oil . bado uchimbaji unafanyika, tulia hapo bado game haijaisha

 

[Geza Ulole]

saadeque, ushaambiwa 60TCf is equivalent to 12 bln barrel za oil, sasa hilo swala la monetary value linatoka wapi? zidisha kutoka gharama ya barrel at the moment kujua Tanzania's reserves ni kiasi gani! Hivi kiingereza ni kigumu namna hiyo?

 

[Xplorer]

what is the monetary value of that gas and our oil..Tuanzie hapo mwanzo

1barrel =5437 cubic feet of gases
1bn barrel=5.4trillion cubic feet of gases
10bn barrel =54trillion cubic feet of gases

Gas iliyopo Tanzania hadi sasa ni zaidi ya 57tcf.

kama unataka monetary value unaweza ukapiga mwenyewe hesabu na kuangalia iwapo 1barrel of oil inauzwa $40,hiyo 10bn barrel itakuwa na thamani kiasi gani na hizo za kwenu 1bn barrels zitakuwa na thamani kiasi gani.

mkiambiwa hamna haja ya kujenga bomba wala refinery plant mnakataa.

 

[Towashi wa 2]

By the way future ya gas ni kubwa na valuable kuliko oil,nadhani mnasikia wenzenu wenye mafuta wanavyofulia kwa sasa,endeleeni kuhangaika na huto tumapipa twenu

 

[Geza Ulole]

1barrel =5437 cubic feet of gases
1bn barrel=5.4trillion cubic feet of gases
10bn barrel =54trillion cubic feet of gases

Gas iliyopo Tanzania hadi sasa ni zaidi ya 57tcf.

kama unataka monetary value unaweza ukapiga mwenyewe hesabu na kuangalia iwapo 1barrel of oil inauzwa $40,hiyo 10bn barrel itakuwa na thamani kiasi gani na hizo za kwenu 1bn barrels zitakuwa na thamani kiasi gani.

mkiambiwa hamna haja ya kujenga bomba wala refinery plant mnakataa.

Right now 1 barrel of oil ni $49 and gas reserves zimefika 60TCf in Tanzania with new discoveries around the Ruvu basin!

 

[Geza Ulole]

Oil cuts loss, ends above $49 on talk of OPEC output ceiling

Published: June 1, 2016 3:11 p.m. ET


Official OPEC meeting set for Thursday

Getty Images

By


MyraP. Saefong
Markets/commodities reporter

JennyW. Hsu

Oil futures settled narrowly lower on Wednesday, recouping most of their earlier losses after news reports said that members of the Organization of the Petroleum Exporting Countries may consider placing a ceiling on crude production.

The news comes ahead of Thursday’s biannual OPEC meeting. The market also awaits weekly U.S. government data on petroleum supplies, also due Thursday.

Time (EDT)Crude Oil - Electronic Jul 20162 Jun8:004:003 Jun8:004:00
US:CLN6
$48.0$48.5$49.0$49.5
July West Texas Intermediate crude CLN6, -0.55% settled at $49.01 a barrel, down 9 cents, or 0.2%, on the New York Mercantile Exchange, trading off the session’s low of $47.75. Prices fell 0.5% on Tuesday, but ended the month of May with a gain of 6.9%. August Brent crude LCOQ6, -0.40% on London’s ICE Futures exchange fell 17 cents, or 0.3%, to $49.72 a barrel.


OPEC members meeting behind closed doors ahead of the official cartel meeting Thursday in Vienna have revived the idea of a collective crude production ceiling, according to a report from The Wall Street Journal.

The group previously had a production ceiling of 30 million barrels a day, which it routinely overshot, but put an end to that limit back in December.

Any move to cap production “would likely come with a significant asterisk,” Robbie Fraser, commodity analyst at Schneider Electric, told MarketWatch. The limit “would almost certainly be placed at a high enough level to avoid burdening any member countries.”

So “a cap tomorrow would likely do little to impact current fundamentals, but could prove a nice head start on negotiations later this year,” he said.

But Tyler Richey, co-editor of The 7:00’s Report, said he’d “find it hard to believe that a ‘cap’ would be agreed upon because of the continuing disagreements within OPEC, specifically Iran remaining adamant about boosting production regardless of what the rest of the ‘cartel’ does.”

Saudi Arabia, the group’s biggest producer, is considering backing the limit, the WSJ report said. Nigeria, Qatar, Algeria and Venezuela are also supportive of the idea, it said, citing a person involved in the talks.

Oil cuts loss, ends above $49 on talk of OPEC output ceiling

 

[Geza Ulole]

1barrel =5437 cubic feet of gases
1bn barrel=5.4trillion cubic feet of gases
10bn barrel =54trillion cubic feet of gases

Gas iliyopo Tanzania hadi sasa ni zaidi ya 57tcf.

kama unataka monetary value unaweza ukapiga mwenyewe hesabu na kuangalia iwapo 1barrel of oil inauzwa $40,hiyo 10bn barrel itakuwa na thamani kiasi gani na hizo za kwenu 1bn barrels zitakuwa na thamani kiasi gani.

mkiambiwa hamna haja ya kujenga bomba wala refinery plant mnakataa.

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[Geza Ulole]

By the way future ya gas ni kubwa na valuable kuliko oil,nadhani mnasikia wenzenu wenye mafuta wanavyofulia kwa sasa,endeleeni kuhangaika na huto tumapipa twenu

ila oil price zina-rebound mpaka mwaka kesho May itakuwa imefika $60 per barrel!

 

[Geza Ulole]

In March

Dodsal Group Discovers Gas Reserves Worth $8 Billion in Tanzania
Dubai-based energy company believes discovery could transform East African country’s economy

ENLARGE
Dodsal Group found natural gas deposits at a field in the Ruvu Basin which is located about 50 kilometers west of Dar es Salaam in Tanzania. Photo: Reuters
By
Nicolas Parasie
March 28, 2016 9:16 a.m. ET
3 COMMENTS
DUBAI—Dubai-based Dodsal Group said on Monday that it has discovered gas reserves worth an estimated $8 billion in Tanzania, which could help lift the eastern African nation’s economy.

The family-owned conglomerate said it struck 2.7 trillion cubic feet of natural gas deposits at a field in the Ruvu Basin which is located about 50 kilometers west of the country’s largest city, Dar es Salaam. It began exploring the site in 2009, two years after obtaining the concession rights there.

“It’s a game changer, this will change the economy of the country,” said Rajen Kilachand, chairman and president of the Dodsal Group. The onshore gas discovery will boost the Eastern African country’s reserves to more than 57 trillion cubic feet, Mr. Kilachand said. Most of Tanzania’s earlier-discovered gas reserves are located off its coast.

Related

• Frontier Markets: Tanzania Says Gas Reserves Rise 18% to Reach 55 Trillion Cubic Feet (June 8, 2015)

Mr. Kilachand said the gas discovery will help to eliminate the country’s fuel import bills. The group also said the gas discovery will stimulate the local economy by creating jobs and boost Tanzania’s competitiveness.

Oil and gas discoveries in Eastern Africa in recent years have transformed the region into a potentially major energy supplier, which has attracted the interest from international energy groups such as BG Group, now part of Royal Dutch Shell, and Exxon Mobil.

Dodsal has already spent $200 million on its Tanzania project and plans a further $300 million of investments in the next two years to build its exploration and production capabilities there. Mr. Kilachand said, as part of the agreement with the government, profits will be shared “more or less 50-50.” He expects to bring the gas to market by the first quarter of 2018.

Based on the price of gas in Tanzania, the natural gas deposits are valued at $8 billion. Dodsal said the wells could contain more gas, giving it a potential value of $11 billion. In addition, the company said it is exploring a third well which according to initial assessments contains even more gas than the discovery announced today.

Write to Nicolas Parasie at nicolas.parasie@wsj.com

Dodsal Group Discovers Gas Reserves Worth $8 Billion in Tanzania

 

[Geza Ulole]

Dodsal Group makes big Tanzania natural gas find
DUBAI, March 28, 2016

Dodsal Group media roundtable in Dubai.

The Dubai-based Dodsal Group has made a major natural gas discovery in Tanzania and plans to invest an additional $300 million in the country over the next 24 months to support exploration and production there, it said on Monday.

The discovery in the Ruvu Basin near Dar es Salaam is estimated to contain over 2.7 trillion cu ft (TCF) of natural gas deposits with a value of $8 billion to $11 billion at current market prices, Dodsal said.

The company described the find as Tanzania's biggest onshore gas discovery, saying it would boost the nation's total estimated recoverable natural gas reserves to more than 57 TCF. Most of Tanzania's gas discoveries have so far been made in deep-sea offshore blocks.

In addition, a third Dodsal well at Mbuyu in Tanzania has found a large gas column which is estimated to contain up to 5.9 TCF of gas, the company said, adding that studies of the deposit were underway.


Dr Rajen A Kilachand, chairman and president of the Dodsal Group, said: “The discovery of natural gas reserves in Tanzania further strengthens our commitment to the nation to be a partner in the country’s all-round socio-economic progress.”

“Tanzania has tremendous potential in the hydrocarbon sector. When efficiently leveraged, this will bring incremental economic growth by assuring timely and ready supply of clean energy. We are fully committed to supporting the nation in this journey, underlined by the nine years of natural gas exploration that we have been undertaking.

“As a socially responsible organisation, our focus is to bring in added value across all aspects of our operation and supporting Tanzania in stimulating the local economy, creating new jobs for the Tanzanian youth and driving the growth of small & medium enterprises by building a strong local supply chain. The significant discovery of natural gas, in close proximity to Dar es Salaam, will boost the economy and strengthen its all-round competitiveness,” he added. – TradeArabia News Service & Reuters

Dodsal Group makes big Tanzania natural gas find