Kenya recently launched its newest mega infrastructure project, the Lamu port, which is a part of an ambitious transport corridor between Lamu (a small archipelago north of Mombasa in Kenya), South Sudan and Ethiopia. The Lamu port is believed to be a cornerstone of the Kenyan government’s Vision 2030 development plan, and is now being branded as a ‘game changer’ project. The port is part of the wider US $23 billion Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor and has been constructed by China Communications Construction Company, with the first three of the planned 32 berths coming at a cost of US $367 million. This transport corridor is touted to comprise a standard gauge railway line; an oil pipeline and refinery; road network; international airports at Isiolo, Lamu, Lokichogio; the port of Lamu at Manda Bay; and resort cities.
The Lamu port is going to be Kenya’s second deep-water port after Mombasa. Plans for a second deep-water port go back to mid-1970s, when the then Ministry of Power and Communications embarked on a study to set up a deep-water port on the Kenyan coastline. The principal reason to set up a second port was to reduce the economic dependency on the port of Mombasa, which was coming under increasing strain due to rising business volumes and demand. However, the lack of political will, exorbitant projected costs, and various inter-ministerial turf wars halted the project for almost 30 years. The project only materialised in 2012 when the then President and Prime Minister of Ethiopia, South Sudan, and Kenya laid the port’s foundation stone. All the three countries agreed to fund their part of the project from their respective national budgets.
When the project was first conceptualised, the Lamu port was intended to connect the landlocked East African economies to global trade routes. It was also intended to help develop alternative routes, especially for the export of South Sudanese oil to India and the Far East, since most of the oil is pumped from the Greater Nile Oil Pipeline to the Port of Sudan. Even Ethiopia depended mainly on exporting their goods from the port of Djibouti, Berbera (Somaliland). On top of that, following its rapprochement with Eritrea, Ethiopia also regained use of the ports of Assab and Massawa on the Red Sea. As a result, the international ambitions of the transport corridor dwindled until the project was revived around 2012.
However, there are various ports along East Africa’s coastline, which necessitates the need for greater supply chains and logistics corridors into the hinterlands of East and Central Africa due to the impending population boom in the coming decades. The Lamu port project and the LAPSSET corridor showcase the importance of making strategic decisions on infrastructure and regional connectivity to spur economic development.
There are various ports along East Africa’s coastline, which necessitates the need for greater supply chains and logistics corridors into the hinterlands of East and Central Africa due to the impending population boom in the coming decades. The Lamu port project and the LAPSSET corridor showcase the importance of making strategic decisions on infrastructure and regional connectivity to spur economic development
The Lamu port is intended to boost Kenya’s status as a transport and logistics hub for both East Africa and the Horn of Africa region. The port will serve as a key transhipment hub and is expected to attract key shipping lines by competing directly with the ports of Durban in South Africa and Djibouti in the Horn of Africa. With a depth of 17.5 metres, as opposed to 15 metres in Mombasa, the port of Lamu is in an ideal position to handle large container ships that are unable to dock at Mombasa. It is also predicted that the Lamu traffic is expected to reach 23.9 million tons by 2030, inclusive of demand from both South Sudan and Ethiopia.
With the operationalisation of the port, the Kenya Ports Authority in conjunction with Kenya Revenue Authority has announced a host of incentives including a promotional tariff for one year to encourage the use of this facility by its customers. Shipping lines for their second port call at either Lamu or Mombasa will be charged 50 percent of the gross tonnage-based dues. Kenya is also offering 40 percent discount for wharfage and shore handling services for transit cargo for both loading and discharging goods, in addition to a 30-day free storage period. Through these offers, the Kenyan government hopes that Lamu and Mombasa port will become a key entry and exit point of cargo, deep into and out of Africa’s hinterland.
The Kenyan government has persistently argued in favour of the economic viability of the Lamu port project and its potential to transform regional economics through increased trade, integration, and interconnectivity. With a network of roads, rail, and pipeline connecting the port to the hinterland, the project will help Kenya to have the advantage of lower cost of transportation by reducing the distance between Kenya and South Sudan and parts of Ethiopia. This will not only help Kenya to gain greater access to markets for its products, but will also enable it to get revenue from cargo transiting through the Lamu port to other countries.
With a network of roads, rail, and pipeline connecting the port to the hinterland, the project will help Kenya to have the advantage of lower cost of transportation by reducing the distance between Kenya and South Sudan and parts of Ethiopia. This will not only help Kenya to gain greater access to markets for its products, but will also enable it to get revenue from cargo transiting through the Lamu port to other countries
However, there are certain uncertainties raised over the economic viability of a second deep-water port; mostly driven by the deficient infrastructural integration of Lamu and northern Kenya.
Certain civil society organisations and industry and logistics experts warn that the facility risks becoming a ‘white elephant’ project due to uncertainties around its core use. The Kenyan government’s decision to push business to Lamu port could lead to a decline in revenues for Mombasa port. This could consequently lead to Kenya’s inability to repay Chinese loans used in the construction of the Standard Gauge Railway (SGR) project, another Kenyan megaproject whose viability has been in question before.
In addition, the construction of this port has yielded numerous concerns around land rights, the environment, local livelihoods, and security. Kenya’s coastal region has long grappled with unresolved land issues with very few residents in Lamu having titles for the land they live on. Politicians have consistently used the issue of land ownership to instigate violence and incite communities against each other. Local residents have also complained about the compulsory land acquisition by the government without getting adequate and timely compensation.
Another major issue is the environmental concerns around the port’s construction and the associated disruption of livelihoods. Since the project involves dredging shallow inland channels and felling mangrove forests, it could disrupt artisanal fishing, which is the main source of income for almost 70 percent of Lamu’s population. Without any access to viable fishing grounds, local fishermen’s livelihood will be threatened.
Lastly, there are security concerns as well. The Lamu County has been targeted by militant outfits like Al-Shabaab making it a highly volatile region. Al-Shabaab’s activities and strategy in this region has been clear—to entrench divisions and mobilise support over localised issues. While security operations by the Kenya Defence Forces have significantly reduced incidents in recent years, periodic and random attacks have continued to affect the port’s construction.
These issues raised by the community are important and require serious consideration since they affect many aspects of Lamu residents’ daily lives. Therefore, it is incumbent on the Kenyan government to encourage community participation by treating the locals as direct stakeholders and partners in the Lamu project.
The operationalisation of the Lamu seaport comes at a time when the long-term viability of China’s Belt and Road Initiative (BRI) has come under scrutiny due to the COVID-19 pandemic’s associated challenges. Sub-Saharan African ports play an integral role in the BRI and Chinese investments in African ports form the backbone of China’s ‘Maritime Silk Road.’ A 2019 study by CSIS identified 46 Sub-Saharan Africa ports with financial, construction, and operational involvement of Chinese entities. These investments not only help China gain access to more markets, but also helps Beijing to exert more political leverage, empower Peoples Liberation Army Navy’s (PLAN’s) security activism, and also establish a dependency on Chinese technology and expertise.
China’s timely construction of the Lamu port not only reinforces its image as a development partner and boosts its political influence, but is also expected to contribute towards regional GDP growth. There is already an ongoing geostrategic competition brewing in the Indian Ocean, with regional and extra-regional powers competing to secure military access and mobility across the region. With the Lamu port, China now has another port facility in the Indian Ocean that it could access without impediments and from where it could project its power capabilities.
From an African perspective, port expansion projects are key to furthering Africa’s growth and development since almost 90 percent of African exports depend on ports. Without any credible and competitive western alternative to China’s financing and construction through the BRI, it is improbable not to expect African countries to share the same urgency and plausible appetite to get closer to China.
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Abhishek Mishra is an Associate Fellow with the ManoharRead More +