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US woos Africa as rivals eye economic growth
by Staff Writers
Nairobi (AFP) Aug 03, 2014


Kenya launches giant port construction with $480m deal
Nairobi (AFP) Aug 01, 2014 - Kenyan President Uhuru Kenyatta launched Friday a construction deal for the first berths in a proposed multi-billion dollar port, the day after ordering vast tracts of "stolen" land be repossessed.

The planned $24 billion (18 billion euro) Lamu port project, due to be finished by 2030, is intended to serve much of east Africa, with oil pipelines to South Sudan and railways to Ethiopia and Uganda from the Indian Ocean coast.

But the area has been hit by a recent wave of deadly attacks, largely claimed by Somalia's Al-Qaeda-linked Shebab militants but which Kenyatta has blamed on "local political networks".

On Thursday, Kenyatta said the massacres had been fuelled by companies seizing land covering a vast coastal zone nearly the size of Luxembourg "under dubious and corrupt circumstances".

The land, stretching over 2,000 square kilometres (800 square miles) was taken by 22 companies between 2011 and 2012, he said, ordering it to be repossessed.

"This criminal conspiracy has dispossessed individuals and families living in this region of their land and opportunities for improving their well being," Kenyatta added.

"It has also helped fuel the current insecurity being experienced in the region, and frustrated our efforts in building cohesion in the country."

- 'Major milestone' -

On Friday, the president said he had approved a $480 million deal with a Chinese company for the first phase of construction of three of the 32 berths planned for the flagship project.

"The signing of this contract... is a major milestone," Kenyatta said in a statement, claiming it would make Kenya the "most attractive transport and logistics hub" in the region.

The project, known as LAPSSET -- the Lamu Port South Sudan-Ethiopia Transport Corridor -- includes not only a giant seaport to complement Kenya's hugely overstretched main port in Mombasa, but also a railway, airport and refinery project.

Kenya has set aside 4.45 billion shillings (50 million dollars, 38 million euros) "to immediately commence" building by state-run China Communication Construction Company, Kenyatta said.

Officials said construction at the port -- which has seen little activity since it was formally launched in a ceremony in March 2012 -- would begin as soon as September. The port alone is projected to cost $3 billion.

Under the plans, the port will be able to handle some 24 million tonnes of cargo a year from giant container ships, as well as provide infrastructure to support oil discoveries made in Kenya's arid north.

"Our country must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now discovering," Kenyatta added.

The port zone is close by the UNESCO-listed tourist island of Lamu, once popular with high-paying visitors and Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations.

Despite Kenyatta's insistence that local groups carried out the attacks, Somalia's Islamists say killings were further retaliation for Kenya's military presence in their country.

Last September, militants killed at least 67 people in an attack on Nairobi's Westgate mall in which were killed. Over 100 people have also died in the Lamu area attacks.

Kenya's Mombasa port currently serves the landlocked nations of Burundi, Rwanda, Uganda and parts of the Democratic Republic of the Congo.

But the port is overstretched and businesses complain of delays to clear cargo, a particular problem as it is facing growing competition from ports in neighbouring Tanzania.

African leaders head to Washington for a landmark US summit this week, with President Barack Obama hoping to boost trade, development and security ties amid growing competition from China on the continent.

China overtook the United States as Africa's largest trading partner five years ago, with Beijing's trade now worth more than $200 billion (150 billion euros) a year, double that of Washington.

But while the US is playing catch-up, experts say it is wrong to view the situation as a direct competition between the two powers, since China's investments potentially boost US trade and their companies are focused on different sectors.

"The Obama administration has come under increasing pressure from the commercial sector to prioritise Africa policy. This US-Africa summit is more a response to this than a direct beauty contest with China," said Alex Vines, from Britain's Chatham House think tank.

The International Monetary Fund says Africa is now growing faster than Asia.

"Africa now is a land of competition of Europe, America, China, and even some Arabian countries," Rene Kouassi, director of economic affairs at the African Union, told AFP.

The US has been keen to avoid any suggestion that the three-day summit opening Monday -- dubbed the "largest single engagement" by any American president with Africa -- is designed to challenge the role of other nations in the continent.

"We welcome the attention Africa is receiving from other countries like China, Brazil, India and Turkey," said Will Stevens, spokesman for the US State Department's Bureau of African Affairs.

- 'More the merrier' -

Although 50 heads of state were due to take part in the summit, several, including Sierra Leone President Ernest Bai Koroma and Liberia President Ellen Johnson Sirleaf, have already said they are not planning to go because of the ongoing Ebola epidemic in their countries.

The US, the world's largest economy, is only Africa's third-largest trade partner after the European Union -- some of whose members have post-colonial ties with African nations -- and China, which is hungry for the continent's natural resources.

"We believe the more the merrier. But we also think that African countries should make sure that their relationships benefit their people -- and that they add value, not extract it," Stevens added.

Redefining relationships with the continent will be key, analysts say.

Africa is home to seven of the world's fastest-growing economies. Many hope to alter an image of a war-ravaged continent where foreign relationships are based on aid alone.

"The focus is no longer on aid, on humanitarian assistance... it's long overdue, that we move this relationship to the economic sphere, where it can be almost a partnership," Kenyan Foreign Minister Amina Mohamed told AFP.

"Africa still offers the best returns to any investor."

James Shikwati, director of Kenya-based economic think tank the Inter Region Economic Network, argues Washington is trying to "reframe" engagement with Africa given the "new competitor China" which has been "very visible" with large-scale infrastructure projects.

"China's massive infrastructure projects kind of dwarf the American effort," said Christopher Wood, from the South African Institute of International Affairs.

"I think we are seeing increasingly an effort by the US to try and get back into that game, for example, attempts to develop energy capacity on the continent."

While past US engagement has focused on "talking about democracy and human rights," Shikwati said he expected Washington would now "temper that with some solid projects that a camera can capture... like some big dam that supplies power."

- 'The African pie' -

Others argue it is wrong to exaggerate economic competition between Washington and Beijing.

"This oft-repeated and inaccurate platitude misrepresents both current geopolitical realities and commercial opportunities," said Dane Erickson, from the University of Colorado, writing in The American Interest magazine.

The two nations often focus on different economic sectors, and it is in fact EU nations that offer the larger challenge.

"A more sober analysis of two areas of focus for the US-Africa Leaders Summit -- trade and investment, and security -- shows just how much how US, Chinese, and African interests align in key policy areas," Erickson added.

Indeed, he argues China's role may actually boost trade for the US.

"Chinese infrastructure investments -- on a continent in dire need of more roads, bridges, and ports to support growing economies and populations -- can benefit Africans, Americans, and other foreign investors," Erickson added.

"It is becoming increasingly difficult for an international executive to do business in Africa today without driving on a Chinese-constructed road, meeting in a Chinese-built conference centre, or shipping materials on a Chinese-made railway."

For Africa, competition on the continent in the "quest to grab the African pie" offers opportunities as well as risks, argues Shikwati.

"Competition gives African countries the leverage to negotiate and get what they want," Shikwati said, while also recalling the warnings from history that foreigners can end up "cutting the pie for themselves."

burs-pjm/er/cah/mtp

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