Dar-Nairobi trade wars a bit familiar, but potentially destabilizing

01Jul 2017
The Guardian
Dar-Nairobi trade wars a bit familiar, but potentially destabilizing

ANOTHER spat in trade wars between neighbours Tanzania and Kenya is being played out at the moment after several years of calm after a trade war involving the airlines of the two countries and their respective travel agencies in the tourism sector early in 2015.

As it is usually the case, each side has its line of arguments, but at the core of it all is expectation that one can eat his cake and have it, that is, take measures to benefit a country at the expense of another, and expect that the other state will do nothing. It is unfortunate that this lesson has to be learned each time.

In the current situation a number of intermingled events may have contributed to the situation, but the rising food crisis in both countries prompted a move to stave off sales of maize from Tanzania to Kenya. The latter did not protest the move but shifted to sourcing maize imports from Zambia, but to avoid a long export route via Mozambican or South African ports and then onward shipping to Mombasa, opted to use the land route via Tanzania. Here, it was obvious crafty businessmen or others would use those vehicles to sell maize sourced here, with connivance.

As a result it appeared that lorries fetching maize from Zambia were not being cleared at the border or were not being assured of clearance before leaving Zambia, which implies Kenya use the sea route as safest for us, to control our grain harvests. That may have proved a bit indulgent for the Nairobi authorities, where we overtax its import effort by distance sourcing of maize and then longer route than is necessary, meanwhile as we are all part of the same trading community. Honestly we had also had to check our options, not wishing to have it all our way.

The result was that Kenya now shifted to halting some our own goods deliveries to that country, which – as it wasn’t caused by any protective move on its part as in our restraining maize exports – seemed to us unprovoked and hostile in character. That is legally plausible but it is unsustainable in the train of events, that they had literally nothing to complain of, as protection is altogether within each country’s express sovereign liberties, and ought not to have been of any significance to that country’s policy initiatives. After all, former President Jakaya Kikwete once sold around 500,000 tons of maize to Kenya, and if we have shortages here, there is plenty of maize across the border in Zambia or faraway in the US; freight is cheap.

Stopping exports of maize to Kenya appeared to be either a price depression strategy which helps urban areas at the expense of rural areas, as exports enable greater competition among traders to secure all available maize. Some critics say that this means rural areas have less food reserves and therefore threaten food shortage, but economic rationality means that certain decisions ought to be made by individuals when they produce and plan for their welfare. The idea that Big Brother is the one who makes the peasant produce and store for tomorrow is false.

In that case it isn’t just an unnecessary trade war with Kenya that excessive maize supply protectionism is taking us, but solidity of regional arrangements, and at the local level, distortion of price signals to peasants. These issues have been discussed in countless seminars but the government usually prefers a risk-averse approach. A few strategists may nod in approval, hoping that new EAC risks won’t arise.

Why critics should be told that Stiegler’s Gorge is a project whose time has come

PRESIDENT John Magufuli has this week expressed disdain at critics of a plan to start constructing a major hydropower facility at the Stiegler’s Gorge, the most solid of the country’s possible sources of electricity. The president underlined the country’s resolve to build the series of dams needed to fully tap the hydropower potential in discussions with a ministerial delegation from Ethiopia, which is providing some strategic and ground-breaking expertise on the matter. Hitherto too many voices contended for the hearing of the president thus the project just stalled.

At more than 2,000mw generational output at its capacity, the project has been a pivotal chip in the wider plans for the redevelopment of the Rufiji River Basin, under the Rufiji Basin Development Authority (RUBADA) for years. At a certain point experts in electricity generation from Brazil did most of the groundwork needed to start writing a memorandum of understanding on the matter, but the same mechanism prevailed. Now it appears that, financing issues apart, there is an entrenched environment lobby which wants the Rufiji Basin left entirely for wildlife.

What has been said in public about Ethiopia’s experience in the field of electricity generation is heartening to say the least, that while we are hovering around 1,450mw of electricity, Ethiopia has already crossed the 4,000mw mark, and intends to scale up to 17,000mw of electricity generation in the next three to four years. That we should hesitate even about reaching 3,000mw in that period – or slightly longer in our case – is indefensible, especially if the issue is how many frog species will be affected, and arguments of the sort. It’s like being bewitched.

While there are still plenty of worries to ponder before anyone affirms that the Stiegler’s Gorge project is now off the ground, and especially the financial part, as our options often clash with what others want, there is a difference this time. There is no more wondering whether or not it is advisable, or whether it is feasible, as all those arguments hold no water. Developed countries did not reach where they were by respecting all environmental rules laid out by NGOs, and instead the latter arose because of some perceived threats to ecological balances after their countries had crossed the Rubicon to industrialization in a sustainable manner. We ought to do so as well, and as the current authorities have underlined, seek approval from no one.

While some of the commentary has been directed at merely the fact that more than 2,000mw of electricity would be added to the national grid if the project took off and was completed rapidly, there is an icing to the cake. Hydropower is by far the cheapest and cleanest of current generation systems, as compared to natural gas which is taking a higher profile in our energy map, increasingly. While sourcing local gas if much cheaper than heavy fuel imports we used to have to purchase outside for thermal electricity generation, there is no issue that hydropower is far cheaper. At any rate that should also constitute a proactive argument for those in ecology specialty, as natural gas touches no forests but destroys them from above.