Lamu Port to provide huge economic boost to East Africa

Lamu_PortThe construction of Lamu Port will ease the pressure on Kenya’s busy port in Mombasa and open up new trade routes to the north of the country. (Image source: Lamu Port Agency)The East African nations of Kenya, Ethiopia and South Sudan recently started construction on a joint development venture, which will create a new transport corridor and bolster trade across the region

Located on the Kenyan coast close to the border with Somalia, the Lamu Port project will involve the development of an 800km road system, a standard gauge railway, a 1,300km oil pipeline, an oil refinery and an airport.

Over the years, Mombasa Port — the current gateway to East Africa and the Great Lakes Region — has witnessed massive cargo congestion that has prompted the development of another port to handle rising demands.

At the same time, the dispute over oil transit fees between Sudan and South Sudan has forced the South to halt its oil production and seek other outlets for its huge oil reserves.

The US$22.5 billion project, officially known as Lamu Port-South Sudan-Ethiopia Transport and Development Corridor (LAPSSET), was recently launched following a ceremony attended by the leaders of the three countries.

Kenya, South Sudan and Ethiopia will cost share the project in a Private Public Partnership.

The African Union, COMESA, East African Community (EAC), South African Development Community (SADC), African Development Bank (AfDB), the World Bank and the international Finance Corporation (IFC) have all been named as partner institutions to the project.

Lamu’s Manda Bay is well sheltered and has deep water of around 18 metres along the main channel and 50-60 metres in the bay, able to accommodate Panama-size vessels.

The Indian Ocean port has been used in centuries past by Arab, Portuguese and Spanish traders, who took spices, slaves, ivory and other merchandise across the seas.

Upon completion, Lamu Port will have 32 berths along a 6km stretch of coastline. According to officials, the first three berths are scheduled to be built by 2016 and the rest completed by 2030.

“The three berths have been designed to handle 30,000 deadweight tonnage (DWT) and 100,000 DWT for general bulk and container cargo respectively,” said Mugo Kebati, the director general of Kenya Vision's 2030 Delivery Board.

“This development is crucial for the importation of building materials and other project components.”

LAPSSET will position Lamu as an important trans-shipment hub that handles crude oil and refine oil from South Sudan. It will also become a shipment point of exports and imports from Ethiopia.

Even as the port development gets underway, it is the underlying infrastructure connecting the three countries that is expected to provide a larger boost to local economies.

Recently, Kenya and Ethiopia signed an agreement for the construction of a standard gauge railway from Lamu Port to Addis Ababa via the border town of Moyale.

At the same time, an 800km road from Lamu, through Garsen and Isiolo, and onto Ethiopia will complement the rail link. The road is expected to be completed by 2016.

With more than 80 million people, Ethiopia is the most populous landlocked country in Africa and connection to the Lamu Port should open up its export corridor to the outside world.

Kenya is Ethiopia’s second biggest trading partner and the rail and road link should open up trade between the two countries.

AfDB has estimated that a total of 28.5 million people from the region could benefit from LAPSSET.

In a similar development that will ease oil handling at the Port of Mombasa, South Sudan and Kenya have signed a deal that will see the building of a 1,300 km oil pipeline connecting Juba and Lamu Port. The pipeline is expected to enable South Sudan to export 350,000 barrels of crude oil daily.

Under the agreement, South Sudan will be responsible for the financing and building of the pipeline, but the two countries will co-manage it.

The AfDB has said that the project would “significantly impact on the lives of the people living in these areas which have been economically under-developed over many years”.

The port is expected to lead to an increase in the number of international arrivals to the region via the air, with new airports expected to be constructed in Lamu, Isiolo and Lokichoggio.

Also slated for development are three resort cities in Lamu, Isiolo at Kipsing Hill and Lake Turkana at Eliye Springs. These resort cities are expected to boost tourism along the northern corridor.

Mwangi Mumero

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