- Ethiopia has remained steadfast in its partnership with Kenya in the development of the LAPSSET Corridor, and the border point, situated approximately 800 Kilometres North of Nairobi, and 780 Kilometres South of Addis Ababa, is part of the LAPSSET project.
- On the Kenyan side, Lamu Port, a flagship project of the LAPSSET Corridor Project is at a completion rate of 85% and is expected to be completed by October 2021.
- Having a key length of 1,200M and a width of 800M, the 1st Berth of Lamu Port by international standards is huge having a capacity to handle and estimated 1,200,000 TEUs annually.
By Eric Obwogi
Kenya’s President Uhuru Kenyatta and Ethiopia Prime Minister Dr. Abiy Ahmed on Wednesday 9th December commissioned the One Stop Border Post (OSBP) in Moyale, Marsabit County.
Construction of the Moyale OSBP was part of the US$ 329 million project that included construction to bitumen standard 438 Kilometres road from Merille River to Moyale in Kenya and 300 Kilometres roads’ sections in Ethiopia. This initial construction phase was funded by AfDB (loan), EU (grant), the GoK and GoE (counterpart funding), says TradeMark East Africa.
The border point, situated approximately 800 Kilometres North of Nairobi, and 780 Kilometres South of Addis Ababa, is part of the LAPSSET project.
Kenya’s Lapsset Project was initially conceived in 1975 but was shelved due to lack of funds. It was later revived and made one of the Vision 2030 projects. This was also at a time when East African Community Countries were waking up to the reality that to compete in the international marketplace, buffing up infrastructural muscle was necessary to ease movement of commodities and personnel to markets, so as to remain competitive.
During this decade that East Africa has been the stage on which a frenetic pace of infrastructural development and upgrading has taken place. Each member of the EAC has aggressively staked huge investment on roads, airports, standard gauge railways and ports, heavily financed with loans from international financial institutions and China, the latter’s state corporations gobbling up the lion’s share of infrastructure projects as well.
The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) project, also known as the Lamu corridor is one of the most ambitious such undertakings estimated to cost a US$ 24 billion. This is a transport and infrastructure megaproject that, when complete, will be the country’s second transport corridor.
Lapsset involves a railway, a highway, a crude oil pipeline and a fibre optic cable connecting the four countries. The project will also include several airports, resort cities, an oil refinery a 32 port berth in Lamu and other supporting infrastructure mini projects.
Speaking during the launch, President Kenyatta noted that the modern border post would accelerate trade between the two nations, which though moderate retains great potential for growth.
“My government has heavily invested in the recent past on modernizing infrastructure between our two countries, with the aim of realizing the huge trading potential between us. Construction of 438KM Road from Merille to Moyale as well as the Moyale One Stop Border Crossing which we are launching today will great bolster trade between our two nations as well as improve to security in the region”noted Kenyatta.
“We are fortunate that our nations have enjoyed cordial economic and diplomatic relations over the years. In 2018 Addis Ababa and Nairobi agreed to deepen relations in the areas of agriculture, co-operate more in the areas of agriculture, tourism, military, transport and infrastructure. I note with satisfaction that the Moyale OSBP is a big step in making goods and travel between our countries more efficient, faster and safer” observed Prime Minister Abiy.
It is envisaged that Lapsset will strengthen Kenya’s position as a gateway and a transport and logistics hub to the East African sub-region and the Great Lakes region to facilitate trade, promote regional economic integration and inter-connectivity between African countries
The LAPSSET railway will connect to West Africa’s Douala – Lagos – Cotonou – Abdidjan Corridor, running through Cameroon, Nigeria, Benin, Togo, Ghana and Cote D’Voire respectively, effectively, connecting the Indian Ocean at Lamu Port, to the Atlantic Ocean.
The project augurs well with the African Union’s regional integration vision of a peaceful, prosperous and fully integrated continent by 2063, and looks set to play an important role in implementation of the African Continental Trade Area (AfCTA), the newly ratified trading bloc, and is one of the nine projects recognized by AU’s presidential Infrastructure Championship Initiative (PICI). Such projects are championed by respective African Heads of State and Government. It is also a Programme for Infrastructure Development in Africa (PIDA), a strategic continental initiative which has the support of all African countries, for mobilizing resources to transform Africa through modern infrastructure.
Added to harmonization of monetary policies and other standards such as; – customs, stabilization of tariff and non-tariff barriers, statistics and labor market information and improved business climate, sound a solid infrastructural network will attract global trade and investments in Africa.
Key on LAPSSET’s master plan is construction of Lamu Port, Kenya’s second seaport which will be bigger than the Mombasa Port. Currently run by the Kenya Ports Authority, Mombasa has traditionally remained the regional powerhouse, but has been challenged by the emergence of Dar es Laam which can no longer be ignored.
Currently the construction of the 1st of three berths at Lamu Port is 100% complete with the remaining two expected to be completed in 2020. Massive private sector interests have been registered to develop and operate the additional 29 berths as well as develop the new Lamu Port Industrial City making Lamu Port an ideal port for exporting locally manufactured goods.
Intra-African trade currently stands at 15%, trade by Europe, Asia and North America is estimated to be 70%, 50% and 40% respectively. The disparity is attributed to slow development of requisite linkages as enablers to regional business, which contributes to high cost of transport and logistics in accessing markets.
More importantly the LAPSSET Corridor infrastructure is being developed as a critical enabler meant to spur growth of other sectors of the economy within the Corridor. Of great significance is the rich agricultural value chain spanning over ten different economic crops whose implementation has begun with the establishment of mega irrigation schemes.
Already both local and international agricultural investors are keen on taking investment opportunities in this area and respective County Governments within the corridor have started receiving enquiries from some of the interested investors.
The LAPSSET Program presents an investment opportunity that may be considered by the private sector investors including Pension, Insurance and saving Funds among other investors.
