Construction of Lamu Port under the ambitious Sh2.5 trillion Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project is on course, with the first ship expected to dock in November.
But recent changes in the regional political landscape, especially within the Horn of Africa, are casting doubts on the viability of the mega initiative, given that Ethiopia — the project’s biggest client — has made peace with Eritrea and has also invested heavily in several ports in Djibouti and Somaliland.
So where will the cargo hauled from this maiden landing in November head to? What roads will it use, given that this kind of infrastructure is yet to start? What about the persistent security nightmare in the areas the roads traverse en route to South Sudan and Moyale?
Last week, the contractor finished construction of a bollard mounting for the first of the 32 expected berths.
A mooring bollard is a vital component in a berth, as it is the anchor point for mooring lines to be fixed in order to secure vessels.
“We have kicked off the first stage of crane rail welding works at the first berth this week and we are optimistic that the first berth will be complete and functional by June,” Lapsset Corridor Development Authority (LCDA) chief executive Silvester Kasuku said.
It is Addis’ non-committal posture to the project that raises queries over its viability, as it was seen as the key client. The other targeted client — South Sudan — has been embroiled in political upheaval that has left its economy in tatters, making it a poor alternative.
So whom will this project serve? To entice Ethiopia that the Lamu port was a bankable project, Kenya was expected to set aside land to enable the country to set up a logistics facility at the port, in the clearest indication that the nation was eyeing the Kenyan facility for its import and export activities.
Early this month, President Uhuru Kenyatta was in Ethiopia to seek reassurance about the country’s commitment to the project, a key indicator that Kenya might not be sitting pretty with the economic reality of this project setting in.
“In my mind, the Lapsset project has great promise of transforming our countries and improving the living conditions of our people. Kenya and Ethiopia resolved to partner in developing first-class infrastructure projects connecting our great nations and the continent. By this I have in mind the Lapsset project which Kenya is, for sure, still fully committed to,” President Kenyatta said.
Currently, the construction phase for the first berth is 72 per cent complete, with the other two berths also under construction. The whole project is 62 per cent complete, Mr Kasuku said.
“The other two berths will be ready by December 2020. I can assure the country that the first ship will make its maiden docking at the Lamu Port by November this year. We believe by then, we will have fully equipped the first berth with the required infrastructure for shipping and docking activities,” said Mr Kasuku.
At completion, the three berths will cost the government Sh48 billion, which will be inclusive of construction of the three terminals; preparation of the turning bay, dredging and reclamation works as well as navigation of sea waves.
This is, however, yet to be done, with sources noting that discussions between the two parties are still ongoing, with no commitment or possible timelines.
For starters, Ethiopia has been pushing for an economic union for the Horn of Africa. If successful, that would see it, together with Kenya and Djibouti, work towards joint investments and ownerships in each other’s infrastructural projects.
However, its operationalisation has been a challenge, given that Djibouti and Nairobi have competing interests on the Indian Ocean port business.
For instance, in 2017, Djibouti handled 55 per cent (4 million tonnes) of the transshipments headed to Mombasa, Dar and other Indian Ocean ports as compared with 200,000 tonnes that Mombasa port handled to other ports. This leaves little business for the new Lamu port, given that it is being fashioned as a transshipment port to the Horn of Africa.
Ethiopia has also been on a roll, acquiring stakes in Djibouti’s Port of Doraleh, Port of Djibouti, Khartoum’s largest seaport — Port Sudan — its $80 million investment for a 19 per cent stake in Somaliland’s Port of Berbera, and its recent announcement that it is also seeking a stake in Eritrea Port. This leaves the Lamu port at an exposed position, explaining Nairobi’s unease.
Mr Kasuku, however, said that the Ethiopia and Eritrea peace deal will have no impact on the project, adding that Eritrea and Djibout ports handle North of Addis Ababa; while the Lamu Port will be handling the entire southern Ethiopia, which has about 50 million people.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.