Tag Archives: Kampala

Ugandan seed distributors aren’t adulterating seeds, it’s probably a problem of handling and storage

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This is from a new paper by Alicia Barriga and Nathan Fiala in World Development:

Results from the tests showed very high levels of DNA similarity (above 98%) and good performance in general, but highly variable quality in terms of the ability of the seed to germinate under standard conditions. We do not see differences in average outcomes across the distribution levels, though variation in seed performance does increase further down the supply chain.

ugandaseedsThe results of the tests point to potentially important issues for the quality of seeds. The variation in germination suggests that buying a random bag of seeds in this particular distribution chain can matter a lot for farmer’s production. The high rate of seed similarity suggests that the main concern among policy makers and researchers, that sellers add inert or low-quality material to the seeds, is likely not the case, at least for the maize sector in the districts we study. However, given the remoteness of these districts and the lack of any oversight in these areas, we believe the results are likely a lower bound for the country as a whole.

The supply chain analysis suggests that the quality of seed does not deteriorate along the supply chain. The quality is the same, on average, across all types of suppliers after leaving the breeders. However, we observe high variation of seeds’ performance results on germination, moisture, and vigor, suggesting that results are more consistent with issues of mishandling and poor storage of seeds, possibly related to temperature or quality controls, rather than sellers purposefully adulterating seeds. Variation on these indicators is usually associated with mishandling during transportation and storage.

As the authors note in the paper, African governments and their external donors have put a lot of effort in “certification and labeling so as to reduce the possibility of adulteration by downstream sellers”. Obviously, e-labels and systems of verifying seed authenticity in the fight against adulteration are important. But equally important is an understanding of how the seed distribution system works. And that is one of the major contributions of this paper. Corruption is not always the problem.

Read the whole paper here.

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Interestingly, Uganda bests both Kenya and Tanzania on productivity in the cereal sector (I made the graph using FAO data). Despite starting off with relatively lower productivity and having gone through civil conflict beginning in the late 1970s, Uganda has since around 2007 clearly separated itself from both Kenya and Tanzania (and appears to have plateaued). Productivity in Kenya peaked in the early 1980s and has pretty much stagnated since. Tanzania’s figures appear to be trending upwards having collapsed in the early 2000s. There is likely an element of soil quality and general aridity involved in these trends. According to the FAO, Kenya and Tanzania use fertilizer at significantly higher rates than Uganda. For comparison, cereal yield in Vietnam is about 2.7 times higher than in Uganda.

 

A Ugandan cartoonist’s take on the country’s relations with China

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The Ugandan president recently leaned on his administration to approve what will arguably be the most expensive road in the world. According to The East African:

In the letter, seen by The EastAfrican, the president directs the minister to stop an on-going procurement process in a move he calls ‘’controlling Uganda’s growing external debt’’ but which technocrats in his government say is likely to deny the country an opportunity to lower the cost of the project.

The road will cost $14.7m per kilometre.

There is less (ethnic) favoritism in the allocation of public sector jobs in Kenya and Uganda than you might think

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This paper from LSE’s Rebecca Simson in African Affairs goes against a lot of my priors:

The unfair distribution of public sector jobs is a common grievance in many societies, but arguably more so in ethnically polarized ones. Using census data from Kenya and Uganda, two countries with a history of ethnic conflict, this article examines how public employment is allocated in multi-ethnic societies by studying the correlates of holding public sector jobs. The results demonstrate that the public services of Kenya and Uganda are first and foremost comprised of educational elites with considerably higher average levels of educational attainment than across the labour forces at large. However, when education is controlled for, highs-killed women and candidates from less developed districts are more likely to work for the state than others. As a result, public sector jobs are more equitably distributed along gender, regional and ethnic lines than education alone would predict. I hypothesize that formal policies to promote regional equity in the provision of basic services in combination with affirmative action measures are contributing to creating comparatively inclusive public services.

public sector workers

Interestingly, the article finds Moi’s presidency in Kenya to be an outlier:

With one exception, the presidency of Daniel Arap Moi in Kenya, there is little evidence of an employment advantage for coethnics of past or current presidents.

You can read the whole paper here.

Along with neopatrimonialism, ethnicity has become a catch-all explanation for everything in Africa. It is great that more and more scholars are interrogating the data on these concepts, and in so doing uncovering patterns that go against some of our most entrenched beliefs about the nature of politics in the region.

Of course region-specific levels of education attainment are endogenous. But one would think that they are sticky enough to make these results interesting. At a minimum, this is a call for a more careful description of baseline conditions against which to measure ethnic favoritism in Africa’s public sectors.

Former US Ambassador to Kenya lobbying to stop South Sudan war crimes court

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This is from Foreign Policy:

The South Sudanese government hired Gainful Solutions Inc., a California-based lobbying group, for a two-year contract worth $3.7 million to boost ties between South Sudan and Trump administration. As one part of the overall contract between the South Sudanese government and the lobbying group, Gainful Solutions will push to “Delay and ultimately block establishment of the hybrid court envisaged” under a 2018 peace deal between the government, led by President Salva Kiir, and his longtime rival, opposition figure Riek Machar.

Gainful Solutions is run by Ranneberger, U.S. ambassador to Kenya, speaks at news conference in Nairobi, a former career U.S. diplomat who served as ambassador to Kenya from 2006 to 2011, and the lobbyist Soheil Nazari-Kangarlou. Constance Berry Newman, a former senior State Department and U.S. Agency for International Development official under the George W. Bush administration, is also named a consultant on the project for a $5,000 fee, according to public disclosure filings from the Department of Justice.

The U.S. government is funding the process (through the African Union) of setting up the court, to the tune of $4.8m.

Here is Human Rights Watch on the court:

The Hybrid Court for South Sudan, set out in the country’s 2015 and 2018 peace deals, could be an important way to hold perpetrators to account for horrific abuses committed in a conflict characterized by unlawful killings, torture, enforced disappearances, rape and sexual violence, and destruction of property. More than four million have been forced to flee their homes.

The court, which would bring together judges and prosecutors from South Sudan and across Africa, is urgently needed to curtail impunity for serious crimes that continue to fuel a cycle of violence in the country. As Human Rights Watch has documented, the country’s domestic court system is not prepared to handle such sensitive, complex cases.

In 2014, the African Union undertook an unprecedented Commission of Inquiry on South Sudan, detailing the serious crimes committed by all parties to the conflict. And since the 2015 peace deal was signed, the AU Commission has been trying to secure approval from the South Sudanese authorities for the initial steps required for the hybrid court’s creation.

Everyone is rightfully outraged. More than 400,000 have died since South Sudan descended into civil war and millions more were displaced.

These revelations also highlight the many challenges the court is likely to face if and when it is eventually set up. South Sudanese political elites (on both sides of the post-2014 conflict) are not particularly keen on facing justice for atrocities committed against civilians and armed actors. It is also unclear if Juba’s friends in Kampala, Nairobi, or Addis have any incentive to inject yet another variable into the ongoing efforts to establish a modicum of stability in South Sudan.

Moral outrage alone will not move the needle. The court’s success will depend on how much pivotal actors within IGAD are willing to lean on Machar and Kiir.

As far as lobbying in Washington, DC goes, this is yet another reminder that even weak states like South Sudan are not passive members of the international system. While their options are limited on account of their position in the hierarchical structure of the state system, they still have agency and have a variety of tools at their disposal through which they can influence the behavior of much more powerful states. See also here.

Why does Al Shabaab target Kenya?

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Ngala Chome, PhD candidate at Durham University, has a great review of Al Shabaab recruitment and attacks in Kenya since 2011, and why the group has been able to stage a lot more attacks in Kenya (96.4% of recorded attacks between 2008-16) relative to other troop contributing countries engaged in Somalia (see map):

Screen Shot 2019-02-03 at 10.50.23 AM.pngKenya may have suffered these attacks since it is considered a key ally of the West. But why is Al-Shabaab (an Al-Qaeda affiliate) targeting Kenya more than it is other countries in the region, such as Ethiopia and Uganda, which also have close ties with the West and have fought Al-Shabaab in Somalia? To what extent does Al-Shabaab attack Kenya for the reasons it publicly gives? Will Al-Shabaab, for example, stop targeting Kenya if the Kenya Defence Forces pulled out of Somalia?

…. The Global Terrorism Database (GTD) recorded 14 more attacks before September 2011, and then 49 in 2012, 35, in 2013, 80 in 2014, 42 in 2015, and 45 in 2016. While the GTD is yet to provide figures from 2017, existing evidence shows that of the 302 trans-border attacks perpetrated by Al-Shabaab from 2008-2016, 3 occurred in Ethiopia, 5 in Uganda, 2 in Djibouti and 291 in Kenya. Brendon Cannon and Dominic Pkalya, in a recent article, have argued that beyond sharing a border with Somalia, Al-Shabaab targets Kenya more than other frontline states because of the opportunity spaces linked to Kenya’s international status and visibility, its relative free and independent media that widely publicizes terrorist attacks, a highly developed and lucrative tourism sector that provides soft targets, expanding democratic space and high levels of corruption. In sum, these variables play into Al-Shabaab’s motivations and aid planning and execution of acts that aim to fulfil the group’s quest to survive – as it losses more ground in Somalia – by maintaining its relevance on the global stage.

Read the whole thing here. For more on the African Union Mission in Somalia (AMISON), Paul D. William’s new book looks fascinating (I haven’t read it yet).

For a broader understanding of the dynamics driving insurgency in the Horn, check out Michael Woldemariam’s Insurgent Fragmentation in the Horn of Africa: Rebellion and its Discontents and Inside Al-Shabaab by Harun Maruf, Dan Joseph and Christopher Anzalone.

 

Mamdani on the African University

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Ugandan scholar Mahmood Mamdani has an excellent piece in the LRB on the African University. Here are excerpts:

On the state of affairs:

The African university today is still very much what it was from the start: a colonial project with a monolingual medium of instruction, framed in terms of a European ‘universalism’ from which a large majority of the colonised were excluded.

On language (channeling Ngugi wa Thiong’o — an idea that keeps growing on me with age…):

Makerere

Makerere University

Is there an intellectual mode of reasoning we can describe as African, in the way Mazrui spoke of a ‘French’ or a ‘Western’ mode of reasoning? Not an ancestral or genetic mode, obviously, but one which weaves together a set of discourses communicated in a common language that presupposes – or suggests – an intellectual community with a long historical formation. Language is our first obstacle here. Most of those of us who have come out of colonialism speak more than one. The languages of colonialism are inevitably languages of science, scholarship and global affairs. Then there are the languages of colonised peoples – languages whose growth was truncated by colonialism. Our home languages remain folkloric, shut out of the world of science and learning, high culture, law and government. There are exceptions. In East Africa, Kiswahili is the language of popular interaction, culture, and official discourse, also the medium of primary and secondary schooling, but not of university education. At East African universities, it has the status of a foreign language, with departments of Kiswahili studies. It is not the bearer of a scientific or a universal philological tradition.

Finally, on decolonizing the university:

What would it mean to decolonise a university in Africa? The East African experience suggests that one answer would be the opposite of what is happening in American and British universities: reducing the cost of a university education, by state grants and subsidies, to make it more inclusive. In the first place, therefore, fees would have to fall. I was at the University of Cape Town from 1996 to 1999; in the years that followed – the heyday of South Africa’s independence – fees began rising. In the second place, there would have to be multilingual projects designed to provide Westernised education in several languages and to nurture non-Western intellectual traditions as living vehicles of public and scholarly discourse in those languages. This is not a demand for a revivalist project, but a call to include the languages of popular discourse, which in South Africa would mean centres for the study of the Nguni and Sotho languages and traditions (the opposite of area studies), and translation units, carrying the best academic literature – global, regional and South African – back and forth between the new linguistic centres and the older faculties. Broadening the referential world of African universities means competence in the languages which embody non-Western traditions.

Read the whole thing here. Mamdani serves a great narrative on the intellectual history of East Africa.

In reaction to Mamdani Chris Blattman makes important points in this thread.

Also, let’s bring Transition back to life.

Colonial education, social status, and social mobility in Uganda

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This is from an exciting paper by zu Selhausen et al. in Economic History Review:

This article uses Anglican marriage registers from colonial and post‐colonial Uganda to investigate long‐term trends and determinants of intergenerational social mobility and colonial elite formation among Christian African men. It shows that the colonial era opened up new labour opportunities for these African converts, enabling them to take large steps up the social ladder regardless of their social origin. Contrary to the widespread belief that British indirect rule perpetuated the power of African political elites (chiefs), this article shows that a remarkably fluid colonial labour economy actually undermined their social advantages.

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conditional probability of entering Class I (Kampala)

Sons of chiefs gradually lost their high social‐status monopoly to a new, commercially orientated, and well‐educated class of Anglican Ugandans, who mostly came from non‐elite and sometimes even lower‐class backgrounds. The study also documents that the colonial administration and the Anglican mission functioned as key steps on the ladder to upward mobility. Mission education helped provide the skills and social reference needed to climb the ladder in exchange for compliance with the laws of the Anglican Church. These social mobility patterns persisted throughout the post‐colonial era, despite rising levels of informal labour during Idi Amin’s dictatorship.

Status inversion/disruption during colonialism is significantly under-appreciated as a cause of elite political instability in post-colonial Africa (paper on this coming soon). Ghana, Nigeria, and Uganda are paradigmatic examples of this phenomenon of educated “commoners” butting heads with established pre-colonial ruling elites following independence. 

The authors also call for a more nuanced understanding of political power under British indirect rule:

Although many Ugandan chiefs were appointed as administrative officials under indirect colonial rule and in this way exercised both political and economic power over the local population, our micro‐evidence portrays a society in which access to secondary education and a labour market seemingly based on meritocratic criteria caused chiefs’ colonial power gradually to disappear. This shift, which was helped by colonial land reforms and increased African access to Kampala’s formal labour market, challenges the perception of British indirect rule as ‘decentralised despotism’. It also illustrates how mission education did more to foster social mobility among our sampled grooms than to entrench the traditional privileged classes.

Read the whole paper here (gated).

 

 

Egypt vs Ethiopia: Hydropolitics of the Nile Basin

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I just finished reading John Waterbury’s The Nile Basin: National Determinants of Collective Action. The book offers a concise introduction to the politics of international water basins as well as the various points of contention among the riparian states in the wider Nile Basin.

Here’s an excerpt:

All upstream riparians in the Nile basin, including the Sudan share varying degrees of suspicion towards Egypt and Egyptian motives in seeking cooperative understandings. It seemingly follows that Ethiopia could mobilize these fears and occasional resentments into an alliance of upper basin riparians. The British in fact tried to do just that from 1959 to 1961, as Egypt and the Soviet Union jointly pursued the Aswan High Dam project at the expense of the upper basin (p. 86).

Why would upper basin riparians care about how Egypt uses water that flows up north?

As Waterbury explains, this is because of the international norm of Master Principle of appropriation — “whoever uses the water first thereby establishes a claim or right to it” (p. 28). Therefore, Egypt has an incentive to use as much of the Nile waters as possible in order to establish a future right to high volumes of downstream flows. Increasing domestic water consumption makes it easy for Cairo to demonstrate “appreciable harm” if any of the upper riparian states were to divert significant volumes of the Nile’s flows.

This is principle is in direct conflict with the principle of equitable use that also underpins riparian regimes (which are legion, apparently. Read the book). And that is where inter-state power politics come in.

Waterbury accurately predicted the current problem bothering Cairo:

The ultimate nightmare for Egypt would be if Ethiopia and the Sudan overcame their domestic obstacles to development and to examine coolly their shared interests in joint development of their shared watershed in the Blue Nile, Atbara, and Sobat basins. Given Ethiopian and Sudanese regional behavior in the 1990s, Egypt need not lose sleep yet (p. 149).

Well, it is time for Egypt to lose sleep. Big time.

A resurgent Ethiopia is damming the Abbay (Blue Nile) and is likely to divert more of its waters in the future for agricultural projects.

What’s puzzling to me is why Egypt is not interested in cutting a deal right now. Given that Ethiopia is only likely to get economically and militarily stronger with time, why wouldn’t Cairo want to cut a deal under conditions of a favorable balance of power?

An obvious explanation is that Egyptian domestic political concerns make it harder for the government to sign a deal that diminishes claims to the Nile (Sisi doesn’t want to be the one that signed away water rights!) But this problem will only get worse for Egyptian elites, assuming that Egypt will get more democratic with time.

I am not surprised that Ethiopia is playing hardball.

Rwanda’s Kagame on the Social Construction of Ethnicity

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This is from an interesting interview with the FT:

During the interview, Mr Kagame says it matters little whether there are real physical differences between Hutus and Tutsis or whether these were arbitrary distinctions codified by race-obsessed imperialists. “We are trying to reconcile our society and talk people out of this nonsense of division,” he says. “Some are short, others are tall, others are thin, others are stocky. But we are all human beings. Can we not live together and happily within one border?” Mr Kagame has taken a DNA test that, he says, reveals him to be of particularly complex genetic mix. The implication, he says, is that he, the ultimate symbol of Tutsi authority, has some Hutu in his genetic make-up.

The transcript is available here. Read the whole thing.

Also, the average Rwandese lives a full six years longer than the average African.

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Ultimately, the sustainability of Kagame’s achievements will depend on his ability to solve an important optimal stopping problem:

The problem, he says of who might succeed him, is preventing someone from “bringing down what we have built”. Above all, he says, he wants to “avoid leaving behind a mess”.

The president insists it was never his intention to stay on, but the party and population insisted. “We are not saying, ‘We want you forever until you drop dead,’” he says, imitating the voice of the people. “We’re only saying, ‘Give us more time.’”

On Obsolescing Bargains: Hoima-Tanga Pipeline Edition

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This is from the East African in March:

The incentive that among other things lured Uganda to choose the southern route is the tariff of $12.2 per barrel of oil that Uganda will pay to move its crude oil through Tanzania, which Ms Muloni says was “the best we got.”

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Source: Oil & Gas Journal

The East African has learnt that in a bid to hijack the deal from Kenya, which also discovered oil in the northern region, Tanzanian officials were willing to throw sweeteners into the deal, which included free land and a fair tariff.

But, after getting the deal, Tanzanian officials started raising doubts over the project’s benefits to Dar es Salaam, citing a number of issues, such as the fact that in Tanzania land belongs to the government, so Uganda did not have to compensate any landowners, hence an increase in the tariff to a figure that The East African could not establish, was seen as a fair deal for Dar.

I hope Ugandan negotiators are aware that Tanzania’s bargaining position will get even stronger after the 1445km pipeline is built.

On Uganda’s Textile Sector

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This is from The Economist:

Uganda’s main advantages, for the moment, are cheap cotton and labour, and preferential access to American and European markets. When exporting to the rich world “Africa has an 18-35% duty advantage over any other continent”, says Nick Earlham, a shareholder in WUCC and in Fine Spinners. “It’s very competitive.”Screen Shot 2017-05-04 at 1.13.26 PM

Textile workers in Kampala earn about $85 a month, compared with $150 in Kenya and $108 in Vietnam, never mind up to $700 in China. But these savings are offset by problems in almost every other sphere. Power cuts keep plunging the factory into darkness, and an erratic supply of steam to the dyeing machines makes it hard to ensure that each batch of fabric looks alike.

Textiles appear to be a low hanging fruit as far as creating mass employment in African states is concerned. And, at least for now, they will remain immune from the threat of mechanization:

Robots are not yet much good at fiddly sewing jobs on floppy fabric; less than 0.1% of the world’s industrial robots are in the clothing trade.

More on this here.

Lastly, while production levels have not increased significantly over the last decade, FAO data (see below) do suggest a non-trivial increase in productivity (yield/ha) in Uganda’s cotton sector. This outcome could be a result of a myriad causes, but it is in line with recent research by Bates and Block (2013) showing increased agricultural productivity in African states that experienced real exposure to competitive electoral politics.

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South Sudan: A runaway kleptocracy or a gradual evolution towards statehood with an encompassing interest?

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The Sentry, a project co-founded by George Clooney and John Prendergast, has a nice report that details corruption at the highest levels of the South Sudanese government.

How do President Kiir’s children afford to live in such apparent luxury? Corporate records for Combined Holding Limited (CHL), a South Sudanese holding company incorporated in February 2016, provide one clue. These records reveal basic information about the company: the date of incorporation, names of shareholders, their contact information and a copy of their passport. One of CHL’s shareholders is a 12- year-old child with the surnames “Salva Kiir Mayardit” whose passport lists his occupation as “Son of President.” But, this hardly makes this child unique among members of President Kiir’s immediate family.

In total, The Sentry found that at least seven of President Kiir’s children have held stakes in a wide range of business ventures, especially in the extractive and financial sectors. Corporate filings obtained by The Sentry show that South Sudan’s first family appears to be active in the country’s oil and mining industries. Another document obtained by The Sentry, dated June 26, 2015, indicates that Thiik Kiir—the president’s 28-year-old son—owned 35 percent of Nile Link Petroleum. Adocument filed in 2014 lists Mayar Kiir—Thiik’s 29-year-old brother whose passport also confirms he is the president’s son—as owner of half of Oil Line & Hydrocarbons Limited, with the remaining shares held by three Kenyan businessmen.

A document dated May 25, 2015, lists Mayar Kiir as a 50 percent shareholder in Specialist Services Co. Ltd., a company that describes itself as being involved in “oilfield services and petroleum supply.” Another document indicates that Adut Salva Mayar, the president’s daughter, has owned shares of Rocky Mining Industries Limited. Yet another document reports that Anok Kiir, President Kiir’s 29- year-old daughter, has held a 45 percent stake in CPA Petroleum. And, according to another corporate record, Winnie Salva Kiir, the president’s 20-year-old daughter, held an 11 percent stake in Fortune Minerals & Construction. The same document indicates that, as of March 2016, the three largest shareholders of Fortune Minerals are Chinese investors.

You should read the whole thing here.

You’d be interested to know that Salva Kiir and Riek Machar live screen-shot-2016-09-12-at-4-55-03-pmonly a short drive from each other in Nairobi, Kenya.

The idea that the leaders of South Sudan are stealing state resources left, right, and centre is totally abhorrent. Tens of thousands have died since the resumption of civil conflict. Millions are in dire need of humanitarian aid.

The international community has its work cut out for it. South Sudan lacks a functional state apparatus. It is yet to get to the point of stationary banditry.

Which is why I think that it would be misguided to presume that the key problems with South Sudan are endemic corruption or the lack of “good governance.”

Should we really expect the president of a (struggling) oil producing 5-year old state to make $60,000 a year and not dip into state coffers once in a while? After all, Kiir’s *perceived* peers are likely not some low-level bureaucrats here in DC but other leaders of the world and the Davos crowd. This is not to say that if Kiir were paid more he would necessarily be less corrupt. The point is that I am not particularly shocked that Kiir and his collaborators in the pillaging of South Sudan want and have acquired the same material comforts that most leaders in the world have.

The historically inclined might even argue that this is South Sudan’s enclosure movement.

Should one take that view, then the solution to the current problem would not be the *relative* impoverishment of the South Sudanese putative “upper class,” but investments in the expansion of this social category so that there is sufficient intra-elite accountability across the different socio-cultural groups in the country. The strategy of integrating rebel leaders into the SPLA could have served this purpose, but the downside is that it incentivized the proliferation of warlordism in the hope of being bought off by Juba.

Perhaps one of the most important questions to ask about South Sudan is how the international community can help Kiir and his henchmen invest their (ill-gotten) wealth in Juba instead of Nairobi or Kampala.

If left alone, South Sudan will likely remain to be a runaway kleptocratic failed state instead of gradually moving towards a stable state with sufficient coercive powers.

The student of the political economy of institutions in me is somewhat convinced that horizontal intra-elite accountability is probably the best way out for South Sudan (if they can establish intra-elite political stability to begin with). The hope that vertical accountability through regular “free and fair” elections will help keep a globalized elite running a fractious post-conflict state honest and accountable is phantasmic. At the moment the domestic audience costs for engaging in corruption are very low for Kiir and other elites, and will likely stay that way for the foreseeable future.

And don’t even mention “political will.” There are no “good” leaders in the world. Just properly incentivized individuals.

Again, definitely read the report.

A Tentative (Mixed) Public Health Victory: The Slow Retrenchment of HIV-AIDS

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This is from the Economist, on the state of the fight against HIV-AIDS.

The next UN target is that, by 2020, 90% of those infected should have been diagnosed and know their status, 90% of those so diagnosed should be on ARVs, and 90% of those on ARVs should have suppressed viral loads. That is ambitious, but history suggests those in the field will rise to the challenge.

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The blue line is testament to George W. Bush’s No. 1 foreign policy success: PEPFAR.

But we should count our chickens just yet. The trends in the graph above are not uniform across the globe. As I noted in a previous post, there is quite a bit of heterogeneity both across and within countries. For example, in East Africa, Uganda is lagging Kenya and Tanzania in the quest to tame the virus (see below).

On a different note, this is yet another data point to suggest that Yoweri Museveni has hit the inflection point, and from now on all his machinations to stay in power will wipe out the achievements of his first 20 years in power.

Uganda chooses Tanzania over Kenya in pipeline deal

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The Business Daily reports:

Uganda will take its oil to the market through Tanzania’s Tanga port, leaving Kenya to build its own pipeline to Lamu, if the positions taken at the just-ended talks in Kampala are maintained.

It turns out that Kenyan negotiators showed up without having done their homework. For example:

….. it has also emerged that the Kenyan officials participating in the Kampala talks may not have had all their facts right as they tried to address the concerns raised by Uganda over the northern route for the pipeline.

This is odd, given Amb. Amina Mohamed’s chops. Or should we be asking questions of the energy ministry?

Screen Shot 2016-04-16 at 5.04.17 PMUganda’s decision should be treated as new information on the capacity of the Kenyan state to execute large scale infrastructure projects. Kenya really wanted this deal, and the fact that the negotiators could not seal the deal with Uganda suggests that there is no there there as far as Nairobi’s capacity to execute on LAPSSET is concerned. This will undoubtedly impact the Kenyatta administration’s ability to originate new projects related to the $25b LAPSSET development plan.

The economics of the choice of pipeline appeared to not have mattered:

A joint pipeline between Kenya and Uganda would have had an initial throughput of 300,000 barrels per day (200,000 barrels for Uganda and 100,000 barrels for Kenya). This could have earned the pipeline companies $1.66 billion a year, which would be shared between the countries according to throughput.

…… If the two countries go for a standalone pipeline, Uganda will lose $300 million every year due to an increase of $4.07 in tariff per barrel, and Kenya will lose $250 million per year due to the increased tariff of $6.96 per barrel.

All else equal, this is probably a net positive development for the future of the East African Community (EAC). It is obviously a big financial and political loss for Kenya (and for that matter, Uganda) but it will dampen the idea of a two-speed EAC — with Kenya, Uganda, and Rwanda in the fast lane and Tanzania and Burundi in the slow lane.

 

An East African Geopolitical Dilemma: Which pipeline route makes most sense for Uganda?

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Bloomberg reports:

Screen Shot 2016-03-25 at 9.34.21 AMKenya is competing with Tanzania to build the pipeline from oilfields in Hoima, western Uganda. It would either traverse northern Kenya’s desert to a proposed port at Lamu, near the border with Somalia, or south past Lake Victoria to Tanga on Tanzania’s coast. A third option would be through the southern Kenyan town of Nakuru.

Tanzanian President John Magufuli said earlier this month he’d agreed with Museveni to route the conduit via his country at a cost of about $4 billion, with funding from Total SA. The Kenyan option favored by Tullow, which has oil discoveries in Uganda and Kenya, may cost $5 billion, according to an estimate by Nagoya, Japan-based Toyota Tsusho Corp.

Uganda is in a rush to get its oil to market. It also wants to make sure that it does not tie its hands in an obsolescing bargain with Kenya. Being landlocked, the country already depends a great deal on Kenya as an overland route for its imports and exports. The pipeline would add to Nairobi’s bargaining power vis-a-vis Kampala.

In an open letter to President Yoweri Museveni, Angelo Izama, a Ugandan journalist (and a friend of yours truly) articulates these concerns and concludes that it is better for Uganda to build the pipeline through Tanzania in order to minimize its political risk exposure:

It is not rocket science that routing both commercial traffic and oil through Kenya would give Nairobi near total influence on economic matters and would, added to Kenya’s already considerable market penetration in Uganda, leave little wiggle-room for unforeseen and some predictable hazards. The Ugandan domestic commercial and industrial community as well as consumers remember well how helpless they were when disruptions followed the Kenyan election of 2007 (even when some of us had urged the government earlier to restock fuel in anticipation of political violence). Many also live with the challenges of a single port to our import-addicted economy and the cost to family fortunes whenever Nairobi pulls bureaucratic red tape. Obviously being landlocked is not a “non-issue” as you framed it in Kyankwanzi. It needs to be placed in a detailed context. I have some reservations over your optimistic take on political and market integration, and that said, clearly having one member, in this case Kenya, within this greater EAC community with more power and influence than the rest is not an advantage to the growth of the community and may in fact prove rather dangerous. This as I recall has been the common fear cited in our neighbourhood about Uganda’s aggressive military spending (to which the Kenyan government responded with its own expenditure in the decade ending 2018).

The official reason given by Uganda for considering the Tanzania option (see map) is that construction of the Kenyan pipeline would be delayed (due to corruption, expensive land [Kenyans and land!], security threats from al-Shabaab, and the fact that the Lamu Port is yet to be completed).

All these are reasonable concerns.

Plus, it would have been foolish for Uganda not to strengthen its bargaining position by CREDIBLY demonstrating that it is considering BOTH options.

But Uganda must also know that whatever the outcome, this is an obsolescing bargain. Once the pipeline is constructed, it will be at the mercy of the host country government.

It is for this reason that it should seriously consider the kinds of future governments that might be in office in Nairobi and Dodoma/Dar es Salaam.

To this end Ugandan policymakers need to ask themselves the question: Would you rather deal with a government that partially answers to private sector interests and operates in a context of weak parties; or do you want to be at the mercy of a party-state in which some politically-motivated party stalwarts can actually influence official policy?

Understood this way, Uganda’s concern should be about what happens after the deal has been sealed; rather than the operational concerns that have thus far been raised by Kampala.

Notice that Kenya has been able to protect its existing oil pipeline well enough. Rioters may have uprooted the railway in 2007, but that was because they felt that Museveni was supporting their political opponent (Museveni could be more discreet in the future). Also, it is a lot harder to uproot a pipeline buried in the ground. The construction delays due to land issues can also be solved (and in Kenyan fashion, at whatever cost) — notice how fast Kenya is building the new standard gauge (SGR) railway line from Mombasa to Nairobi despite the well documented shenanigans around land compensation (More on this in a World Bank report I co-authored in my grad school days here).

Perhaps more importantly, the Kenyan option is attractive because Kenya also has oil, and will have to protect the pipeline anyway. This scenario also guarantees a private sector overlap between the two countries — in the form of Tullow or whoever buys its stake — that will be in a position to iron out any future misunderstandings.

Tanzania is also an attractive option. The pipeline will be $1 billion cheaper. Because it passes through largely uninhabited land, construction will be speedy. And the port at Tanga is a lot further from the Somalia border than Lamu, and should be easier to protect.

All this to say that the operational concerns raised by Kampala are a mere bargaining tool. These issues can be ironed out regardless of the host country. The big question is what happens AFTER the pipeline is constructed.

And here, I don’t see why Tanzania is necessarily a slam dunk.

The history of the EAC (see here for example) tells us that Kenya tends to subject its foreign policy to concentrated private interests. Tanzania on the other hand has a record of having a principled an ideologically driven (and sometimes nationalist) foreign policy with significant input from well-placed party officials. Put differently, the calculation of political risk in Kenya involves fewer structural veto players than in Tanzania. Ceteris paribus, it seems that it would be cheaper to manage the long-run political risk in Kenya than in Tanzania.

That said, the Tanzania option makes a lot of sense in a zero sum game. As Angelo puts it:

I have some reservations over your [Museveni’s] optimistic take on political and market integration, and that said, clearly having one member, in this case Kenya, within this greater EAC community with more power and influence than the rest is not an advantage to the growth of the community and may in fact prove rather dangerous.

But even this consideration only makes sense in the short run. Assuming all goes well for Tanzania, in the long run the country’s economy is on course to catch up to Kenya’s. Dodoma will then have sufficient political and economic muscle to push around land-locked Uganda if it ever so wishes.

To reiterate, the simple question Museveni should ask himself is: who would you rather negotiate with once the pipeline is built?

I don’t envy the Ugandan negotiators. And they have not helped themselves by publicly stating their eagerness to get their oil to market ASAP.