Business
East Africa’s new great oil game
The eruption of fighting in South Sudan brought East Africa’s political crises into sharp focus at a time of optimism about the region’s economic take-off. Undaunted, analysts point to fast-improving transport links and new oil and gas discoveries. Four leaders dominate the East African diplomatic chess-board, its diplomacy, its soldiering and its business interests. With new railways and road networks, together with new pipelines and electric power grids, they are forging political alliances that will allow them to reshape the region.
At international gatherings such as the African Union summit in Addis Ababa, the four gravitate towards each other: Ethiopia’s Hailemariam Desalegn, Kenya’s Uhuru Kenyatta, Rwanda’s Paul Kagame and Uganda’s Yoweri Museveni. Photographers and reporters catch them sharing jokes and exchanging notes about diplomatic tactics.
Differing in age and political experience, they argue about many details but there is a critical point of consensus. If East Africa is to grasp the economic opportunities now available, there must be a determined effort to integrate its markets and economies, even if that means making concessions and compromises in the short term.
All four run interventionist foreign policies; Ethiopia, Kenya and Uganda sent troops into Somalia, while Rwandan and Ugandan troops have been both invited to and expelled from the Democratic Republic of Congo. They all favor a statist hand on the economic tiller, but they are all building up business classes on whose political loyalty they can rely. All have supported Kenyatta in his attempts to avoid prosecution at the International Criminal Court.
Economic growth and breaking away from dependence on Western markets are common imperatives. None of them enthuse about democracy, particularly in its Western, liberal variants. Their shared political credo is a kind of pragmatic authoritarianism. Like China’s Deng Xiaoping, they do not care whether the cat is black or white as long as it catches mice. Above all, these leaders’ solidarity is informed by a common economic interest.
As Gabriel Negatu, regional director of the African Development Bank, points out: “East Africa is the most promising regional bloc. It as registered between 5 and 6% growth annually for the past decade. We estimate that regional gross domestic product will expand 18-fold by the middle of the century, from $185 billion in 2010 to $3.5 trillion by 2050. This era is comparable to the period immediately after independence.”
This economic promise is based on the depth and scale of integration, says Negatu. If Ethiopia is drawn into the East African Community (EAC), there could be a single market of more than 200 million people. Regional competition and transport links are incentives.
