Tag Archives: Arusha

East African Community Facts of the Day

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This is from Charles Onyango-Obbo in The EastAfrican:

eactrade.pngIn the year 2000, Ugandan exports to Rwanda were worth $9 million. By the 2017/2018 financial year, this figure had shot up to $197 million, against imports of $20 million, giving it a surplus of $177 million, despite the icy relations currently prevailing.

In the same period, in a reversal of fortune, Uganda for the first time registered a $122 million trade surplus with Kenya, with exports worth $628 million and imports worth $505 million.Though Uganda hardly invests any serious money in agriculture, the country is now the EAC’s bread basket.

Kenyan business people travel as far as the remote parts of western Uganda to villages whose names they can’t pronounce, and put a deposit on food crops before they are harvested. None of this happens as a result of state policy, but rather the invisible hand of integration. The magic happens in that “invisible” East Africa.

Despite the circular firing squad that is the relationship between East Africa’s heads of state, the economic incentives for ever greater integration in the EAC remain strong.

Next in line to join might be the DRC. Then perhaps Somalia. Ethiopia might be interested, too.

Georgetown University Summer 2017 Hoyas in Tanzania Program

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Deadline is February 7th, 2017. And Non-Georgetown students can apply. More information here.

You know you’ve lucked out when your school’s most exciting summer program is in the same country/region as your main research projects.

That was me this summer. Students took Kiswahili classes at the University of Dar es Salaam in the mornings and did research/internships in the afternoon. We also visited Bagamoyo and Zanzibar. And in the last week we topped it all with a visit to Arusha and safari in the Serengeti. While in Dar students stayed with host families (all faculty members) on the UDSM campus.

Here is my students’ summary of their experience:

You’re barreling down a dirt road through the middle of Serengeti in the late afternoon. Wildebeest are flashing by your windows but you’re in a race against the setting sun to get to the lodge before dark, so you keep driving. You feel tired, and also a little bit like you’re in The Lion King; you find yourself humming “The Circle of Life” as you try not to fall asleep. You’re jerked awake by a sudden slam on the breaks; the zebras are crossing the road. You try to wake yourself up. Professor Opalo tells you that, while everyone was sleeping, the car passed by a baby lion. . You find his opportune lack of witnesses suspicious. You resolve to stay awake, but find your mind drifting….

What have you done in the last six weeks? Well, most recently, you went on safari and you came within arms reach of a lioness and a hyena, a warthog and a zebra, an elephant and a wildebeest. Before that, you went climbing on mangrove trees in Zanzibar and visited Oldupai Gorge. You saw thirteenth-century ruins at Bagamoyo, Tanzania’s first capital. But in between all the big days were the equally memorable ordinary ones. And those are the days you’re thinking about right now (note: by now you’re probably at “Hakuna Matata” on your mental soundtrack).

A Day in the Life of a Hoya in Tanzania

6:00AM: It’s still dark outside but you’re already awake with toothbrush in hand so as not to lose your spot in the family line-up for the bathroom. You run downstairs to drink your chai and eat your banana and chapati before you have to leave for school. Then you run back upstairs because you forgot your malarone and back down again and out the door as you shout, “Have a good day!” back to the house girl.

7:00AM: You start your trek to school and pick up your friends at their various host families along the way. If you’re lucky, Baba will pity you as he drives by on his way to work and give you a ride. Otherwise, you continue on the sometimes quiet, sometimes chatty walk and stop every so often to take a picture of the local monkeys. You usually arrive 15 minutes before class starts and sit on the bench in the hallway to wait for Mwalimu to unlock the classroom door. All the professors strike up conversations in Swahili with you as they walk by and you get a little overwhelmed and immediately forget all the Swahili words you’ve learned.

8:00AM: Class starts. You start to remember some of the Swahili words you forgot in the hallway as you try to correctly recall your home address, the directions to your host house, and the name of your SFS major. Professor Opalo shows up and takes your passport but you’re not sure why. You just roll with it.

You can read the whole thing here. 

Non-Georgetown students interested in learning Kiswahili (at all levels) can apply to the program. Application details can be found here.

Also, my students are the very best.

Why isn’t the East African Community doing more on Burundi?

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The situation in Burundi is deteriorating, fast.

Armed-forces-in-Burundi-340x230There are strong signs of ethnic violence. More than 300 people have been killed since President Pierre Nkurunziza successfully violated term limits to stay in office for a third term early this year. The ensuing violence has forced over 220,000 to flee the country, while scores remain displaced internally. Over the last week alone more than 80 people have been murdered in what is increasingly looking like a civil war rather than mere civil unrest met with heavy-handed repression. The African union has used the word “genocide” in reference to the Burundian situation.

For a background on the current Burundian crisis see here, here, here and here.

So given the clear evidence that things are falling apart in Burundi, why isn’t the East African Community (EAC) doing more to de-escalate the situation?

The simple answer is intra-EAC politics (which serve to accentuate the body’s resource constraints).

The EAC is a five-member (Burundi, Kenya, Tanzania, Rwanda and Uganda) regional economic community (REC) that is arguably the most differentiated REC in Africa. Based in Arusha, Tanzania, it is a relatively robust institution replete with executive, legislative and judicial arms.

Like is the case for most African RECs, the EAC member states conceded precious little sovereignty to Arusha. For example, the  EAC treaty does not directly empower the REC to intervene in a member country even in cases of gross violations of human rights (like is currently happening in Burundi). So far regional cooperation within the EAC has mainly focused on economic issues that do not pose substantial threats to sovereignty. It is for this reason that the EAC has avoided any kind of direct intervention in Burundi to end what is a singularly political crisis — both within Burundi and at the regional level.

That said, Article 123 of the EAC treaty provides a loophole for intervention.

The Article stipulates that the purpose of political cooperation among EAC member states is to, among other things: (i) strengthen the security of the Community and its Partner States in all ways; and (ii) preserve peace and strengthen international security among the Partner States and within the Community. In my view these clauses mandate the EAC to protect both the internal security of Burundi as well as intra-EAC security.

It is important to note that so far the norm has been to treat vagueness in African REC treaties as a call to inaction. But vagueness also provides willing interveners with a fair amount of latitude over interpretation. Furthermore, since 2000 the trend within African RECs has been to dilute the infamous OAU non-intervention clauses (see the AU treaty, for example) especially with regard to security matters.

It is not hard to see how the conflict in Burundi poses a clear and present danger to both Burundi’s internal security as well as peace and security within the EAC.

We know from history that an all out civil war in Burundi would threaten the security of the region. Burundi’s ethnic make up roughly mirrors that of Rwanda. Ethnic conflict in Burundi would inevitably elicit an intervention from Rwanda, thereby regionalizing the conflict (with an almost guaranteed knock on effect in eastern DRC). In addition, even though Kagame may not be a fan of Nkurunziza, he lacks the moral authority to criticize him given recent moves to scrap term limits in Rwanda.

If Rwanda (overtly) intervenes in Burundi, it is not clear which side Tanzania — a critical player — would take (especially because of the implications for the stability of eastern DRC). Kigali and Dodoma do not always see eye to eye. In addition, the new Tanzanian president, John Magufuli, is not particularly close to his Kenyan counterpart on account of his closeness to Kenyan opposition leader Raila Odinga. This may limit the possibility of collective action on Burundi by the EAC’s two leading powers.

And then there is Uganda. President Yoweri Museveni is currently the designated mediator in the Burundian negotiation process. But he is currently preoccupied in his bid to win an nth term in office (who’s counting?) His legitimacy as a mediator is seriously in question on account of his political record back home. Recall that the proximate cause of the current crisis in Burundi was Nkurunziza’s decision to violate term limits. Museveni scrapped term limits in 2005 and has systematically squeezed the Ugandan opposition into submission through heavy handed tactics that are direct violations of human rights.

Sadly for Burundians, the current state of inter-state relations within the EAC is strongly biased against any robust intervention to stop the violence that is increasingly becoming routine. Nkurunziza knows this, and will likely try to make an end run on his perceived political opponents before the wider international community begins to pay closer attention.

Lastly, the other possible interveners — the  UN and the EU — are also not likely to intervene in Burundi any time soon, despite the country’s heavy dependence on foreign aid. Europe is hobbled by the ongoing refugee crisis and the war on ISIS. As for the UN, it increasingly launders its interventions through region or sub-regional IOs (see for example AMISOM in Somalia, under the AU). This kind of strategy requires a willing regional partner, something that is lacking in the case of the EAC (or the AU for that matter).

In the next few weeks there will probably be attempts at mediation and calls for a ceasefire. But my hunch is that things are likely to get much worse in Burundi in the short term.

Africa’s newfound love with creditors: Bond bubble in the making?

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I know it is increasingly becoming not kosher to put a damper on the Africa Rising narrative (these guys missed the memo, H/T Vanessa) but here is a much needed caution from Joe Stiglitz and Hamid Rashid, over at Project Syndicate, on SSA’s emerging appetite for private market debt (Africa needs US $90b for infrastructure; it can only raise $60 through taxes, FDI and concessional loans):

To the extent that this new lending is based on Africa’s strengthening economic fundamentals, the recent spate of sovereign-bond issues is a welcome sign. But here, as elsewhere, the record of private-sector credit assessments should leave one wary. So, are shortsighted financial markets, working with shortsighted governments, laying the groundwork for the world’s next debt crisis?

…….Evidence of either irrational exuberance or market expectations of a bailout is already mounting. How else can one explain Zambia’s ability to lock in a rate that was lower than the yield on a Spanish bond issue, even though Spain’s [which is not Uganda…] credit rating is four grades higher? Indeed, except for Namibia, all of these Sub-Saharan sovereign-bond issuers have “speculative” credit ratings, putting their issues in the “junk bond” category and signaling significant default risk.

The risks are real, especially when you consider the exposure to global commodity prices among the ten African countries that have floated bonds so far – Ghana, Gabon, the Democratic Republic of the Congo, Côte d’Ivoire, Senegal, Angola, Nigeria, Namibia, Zambia, and Tanzania.

In order to justify the exposure to the relatively higher risk and lending rates on the bond market (average debt period 11.2 years at 6.2% compared to 28.7 years at 1.6% for concessional loans) African governments must ensure prudent investment in sectors that will yield the biggest bang for the buck. And that also means having elaborate plans for specific projects with adequate consideration of the risks involved.

Here in Zambia (which is heavily dependent on Copper prices), the Finance Minister recently had to come out to defend how the country is using the $750 million it raised last year on the bond market (2013-14 budget here). Apparently there was no comprehensive plan for the cash so some of the money is still in the bank awaiting allocation to projects (It better be earning net positive real interest).

“They are fighting each other. By the time they have projects to finance, they will have earned quite a lot of interest from the Eurobond money they deposited. So, all the money is being used properly,” he [Finance Minister] said.

Following the initial success the country’s public sector plans to absorb another $4.5b in debt that will raise debt/GDP ratio from current ~25% to 30%. One hopes that there will be better (prior) planning this time round.

Indeed, last month FT had a story on growing fears over an Emerging (and Frontier) Markets bond bubble which had the following opening paragraph:

As far as financial follies go, tulip mania takes some beating. But future economic historians may look back at the time when investors financed a convention centre in Rwanda as the moment that the rush into emerging market bonds became frothy.

The piece also highlights the fact that the new rush to lend to African governments is not entirely driven by fundamentals – It is also a result of excess liquidity occasioned by ongoing quantitative easing in the wake of the Great Recession.

I remain optimistic about the incentive system that private borrowing will create for African governments (profit motive of creditors demands for sound macro management) and the potential for this to result in a nice virtuous cycle (if there is one thing I learned in Prof. Shiller’s class, it is the power of positive feedback in the markets).

But I also hope that when the big three “global” central banks start mopping up the cash they have been throwing around we won’t have a repeat of the 1980s, or worse, a cross between the 1980s (largely sovereign defaults) and the 1990s (largely private sector defaults) if the African private sector manages to get in on the action.

African governments, please proceed with caution.

Nairobi-Lusaka by road, Part I

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The towering Uhuru Heights under construction in Dar es Salaam combines office space with residential apartments

Lusaka must be the only African capital (or major city) that is not a frenzied construction site. No new major roads are being constructed downtown. My quick look only found two new constructions of tall-ish buildings downtown. Lusaka feels really sleepy compared to the three other African capitals/major cities that I have been to in the last three months  – Dar es Salaam, Nairobi, Accra. Dar es Salaam, in particular, is impressive. The city is constructing a rapid bus transportation system with a dedicated lane. Citywide construction of “office space cum residential apartments” mark the landscape promising a rich experience of downtown living for city residents in the near future (I wish Nairobi did more of this….)

The guy who runs the place I am staying at in Lusaka tells me that the only construction going on in town is of shopping malls and expensive residential houses that no one will afford. President Michael Sata, he argues, is bent on turning Zambia into Zimbabwe.

Michael Sata (a.k.a King Cobra) may not go the way of uncle Bob in Zim but he is definitely not the hope for change that Zambians voted for back in 2011. The growth in the economy (6% on average in the last decade, 7.3% last year) is barely trickling down and the ruling PF seems too preoccupied with killing the opposition to care. The old duo of  Scott and Sata seem out of ideas on how to translate the country’s economic growth into wider socio-economic transformation.

Indeed the African Development Bank in its latest report on the Zambian economy noted that “Zambia has yet to achieve significant gains in social and human development. The poverty headcount remains high, with about 60% of the population still living below the poverty line.” The economy is imbalanced, heavily dependent of capital-intensive copper mining that it barely taxes (80% of exports, but paltry a 6% of revenue).

I was first here two years ago for reconnaissance research and have come back for more work. The pace is a nice change from Nairobi. It is also warmer than Nairobi at this time of the year (well at least before nightfall) – just after three years in California and seven months in Nairobi and I have become a little soft on cold weather (Moving to Chicago this fall will be fun!!)

This time round instead of doing air (Nairobi-Dar), rail (Dar-Kapiri) and road (Kapiri-Lusaka), I decided to do it all by road. This turned out to be a terrible idea.

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Sign post on the Tanzanian side of Namanga

Leaving Nairobi was itself an adventure. Despite Vanessa’s well-intentioned “alarm clock” calls to make sure I was up and ready by 5 AM, I missed my bus (I also missed my bus the first time, which is why I flew to Dar es Salaam). However, this time round it was my dad who was dropping me off and because he is a lot more daring that me and my brother, he decided to chase the bus (we were barely five minutes late, thank you very much Nairobi traffic at 5:45 AM). We did not catch my bus (Dar Express), but caught up with its competitor (name withheld for legal reasons, see below) after it had been stopped by the traffic police on Mombasa road for lack of a passenger license (it had a cargo license). Let’s just say that I was mightily impressed by my dad’s driving skills. I wish I were as daring.

So after the police got their cut (which I later found out was Kshs 5000, about US $60) we set off on the journey to Dar. The conductor on the new bus was kind enough to give me a free ride to Namanga (only Tanzanians can do this!!!) with hopes of catching up with Dar Express – in the end we did not, and I had to pay Kshs 2000 for the rest of the journey. The last time I was on the Nairobi-Arusha road was in 2009 when it was all no more than a dirt track that left you caked in thick red-brown dust. Now it is all paved. Nairobi-Namanga took a dizzying three hours. Just over an hour and a half after that we were in Arusha. After Arusha we sped to Moshi where we were caught up in the Prime Minister’s motorcade as he went to the city referral hospital to visit victims of the recent bombing at an opposition rally in Arusha (Arusha is the Chadema (Tanzania’s main opposition party) stronghold; but even in Dar the few people I spoke to about politics did not have nice things to say about the CCM government, especially with regard to rising inequality and corruption – yeah, I just totally Tom-Friedmanned that one).

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The 922 kilometer (573 miles) Nairobi-Dar road

I must say that the Nairobi-Dar road is impressive. Save for about one hour total of patches that were still being done about two hours outside of Moshi, most of the road is paved. Sometimes I forget how massive (and hence empty) Tanzania is. Namanga-Arusha is marked by flat plains, rolling hills and mountains. In the plains cattle rearing appeared to be the economic mainstay (unfortunately, with school age kids herding tens of cattle and sheep – wake up, Tanzania ministry of education). The hilly and mountainous areas mostly have maize and coffee. After the hills there are vast sisal plantations that stretch from horizon to horizon. Arusha and Moshi are the only big towns on the Namanga-Dar route. I particularly like Moshi (or may be I just don’t like touristy, expensive Arusha). It is a town with character, combining a provincial feeling with urban comforts. It also has some nice public monuments.

I rarely see weigh bridges on Kenyan roads (besides the infamous two in Gilgil and on Mombasa road) but in Tanzania they are plenty. And they are not just for the trucks, but also cater for passenger buses. Most of the trucks on the route were connecting Uganda, Rwanda, Burundi and the eastern DRC to the port in Dar. The passengers on the bus consisted of businesspeople (mostly Kenyans and Congolese), random travelers like myself, and tourists (most of who alighted at Arusha). On the Kenyan side, between Nairobi and Namanga we had a total of 5 police stops. On the Tanzanian side between Namanga and Dar there were 6 police stops and about 4-5 weigh bridge stops – the Tanzanians definitely police their roads more keenly. The police on the Tanzanian side were on the lookout for khat/miraa (illegal in Tanzania, and a beloved commodity of truckers) from Kenya and other contraband. True to EAC hospitality, I did not have any problems with immigration at Namanga (unlike in Nakonde, Zambia) or at any of the police check points (officers came on board to check passports). Talking to Tanzanians reminded me of just how bad Kenyan Swahili is – we must sound to Tanzanians like the Congolese sound to us whenever they speak whatever it is they call Swahili (*ducks and runs*).

The bus arrived in Dar es Salaam about 20 hours after leaving Nairobi (Not bad for a US $42 ticket), despite having been made to believe that the trip would take 13 hours. It didn’t help that I ignored Vanessa’s advice to pack food, hoping to buy stuff on the road – the first food stop was six hours into the trip, I had not had breakfast. Exhausted, hungry and mad at myself for taking the hard way to Dar I decided to get a room at the Peacock Hotel. It is not fancy (probably a 4 star?) but it has hot water, the rooms are spacious, and there’s fast internet. They also have a nice restaurant downstairs (Tausi) and are within walking distance to the port and other sites of interest in Dar – a Subway, Indian restaurant, the national library, banks, etc.

I had a day to burn in Dar reading, writing and walking around in readiness for the second leg of my trip to Lusaka, again by road.

Tanzania elections

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There are no surprises expected from the general elections in Tanzania, held on Sunday. The electoral body has not declared the presidential results yet (leading to reported riots) but no one expects Jakaya Kikwete to lose to Chadema’s Willibrod Slaa. Chama Cha Mapinduzi (CCM), the hegemonic party that has ruled Tanzania since unification, is also expected to maintain its majority in parliament.

More on this as soon as the final official figures become available. Mr. Kikwete won 80% of the vote in 2005.