Sunday, November 10, 2019

Landlocking Kenya

With its independence in 2011, South Sudan became the 14th landlocked country in Africa, one of 45 in the world. Being landlocked is not necessarily an severe barrier to economic development, as demonstrated by the case of Switzerland. But it can be quite an impediment for countries that are heavily dependent upon the export of primary goods, as most countries in Africa continue to be. 

The economy of Kenya is heavily dependent upon tea (mostly lower-grade, destined for Lipton). As with its neighbors to the north, west, and south, it also relies significantly on the export of coffee. Fortunately, each country of East Africa has both commodity and specialty coffee to offer, but most of it must pass through the port of Djibouti, Mombasa, or Dar es Salaam. 

Source: Kolumn and Al-Jazeera
Producers in Uganda, Rwanda, Burundi, and Ethiopia do of course succeed in getting their products to market, but the necessity of clearing customs BEFORE getting to a port certainly reduces their profit, and the limited number of options reduces their bargaining power. Farmers in Kenya have had the advantage of a deep-water port in Mombasa.

Kenya still has the coastline, and the port is still in place, but it may soon no longer belong to Kenya. As reported on Africa Stand, the port itself was mortgaged to secure US$5 billion from China to fund railroad improvements.  Since the debt crises of the 1980s, it has been common for national sovereignty (especially in the area of fiscal policy) to be eroded as a consequence of debt restructuring

The foreclosure on Mombasa, however, appears to be part of a growing trend of loans made by the government of China with unfavorable terms calculated to result in such forfeitures. In the case of Kenya, the result may be that a country with 300 miles of coastline will be as effectively landlocked as Rwanda or Burundi.
Source: Africa Stand

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