Opinion: Now that the World Bank has new priorities, they will most likely not loan to the pipelines in East Africa!

 

There is certain movements that will strike as more expensive for the East African Community (EAC). This being for the Government of Uganda (GoU) and the Government of Kenya (GoK), who has big plans of petroleum pipelines from their oil-fields and to the coast. That being from Turkana to Lamu Port. While the Ugandan oil goes from Hoima to Tanga Port in Tanzania. Both development and industrial projects will have issues with the funding. The World Bank has supported massive infrastructure projects in both countries.

Therefore, for the two counties big development and oil industry, this is giant set-back, since they have to find funding and loans for the pipelines on the open market. Even with higher interests and making the profits of it lesser, than it would have been with a World Bank loan. It would not hurt the pocket as much as it does on the open market. The banks wants more profits themselves and also make sure they are paid-in-full.

With all this in mind. There are speculations, but first. Parts of the self-answering service. Before we look at the reactions in Kenya and Uganda. All of are important, as the state is involved in the licensing and building the pipelines. They are directly into the development and procurement of the pipelines. That is why this is big blow for the administrations and their possible tax-profits on it.

Word Bank Q&A:

“Q. How is “upstream” oil and gas defined?

Upstream is an industry term that refers to exploration of oil and natural gas fields, as well as drilling and operating wells to produce oil and natural gas” (World Bank, 2017).

“Current projects in our portfolio would continue as planned. However, no new investments in upstream oil and gas would be undertaken after 2019, unless under exceptional circumstances as noted in the decision” (World Bank, 2017).

Kenya Pipeline:

“The announcement by the bank, which has significant interests in Kenya’s oil prospecting sector, does not bode well for the country’s anticipated entry into the club of oil producing nations beginning next year. Analysts said they do not expect an immediate reaction to the announcement even as they acknowledged that it takes the shine from oil in the long term” (…) “Locally, the World Bank is offering technical support to the Kenyan government, through the Kenya Petroleum Technical Assistance Project, to prime all stakeholders for commercial oil production and sale. The six-year programme is scheduled to run until February 2021 and involves the World Bank managing a Sh5.2 billion fund set up by investors from Germany, Norway and Britain. The World Bank’s private lending arm, International Finance Corporation, is however directly involved in Kenya’s oil fields, having a 6.83 per cent stake in Africa Oil, the Canadian exploration firm with interests in northern Kenya oil blocks” (Mutegi, 2017)

Uganda Pipeline:

“The pipeline, is expected to be completed by the year 2020, when the country is scheduled to start oil production. In fact, Uganda’s President, Yoweri Museveni and his Tanzanian counterpart recently commissioned the construction of the East African Crude Oil Pipeline. The two leaders laid mark stones for the crude oil pipeline in Mutukula, Kyotera district and Kabaale in Hoima district. Total E&P Uganda, a subsidiary of French oil giant, Total S.A, is spearheading the construction of the crude oil pipeline on behalf of the joint venture partners. Adewale Fayemi, the general manager, Total E&P Uganda says discussions are ongoing to discuss on the formalities of how the pipeline will be run. Already, an agreement has been reached that the East African Crude Oil Pipeline (EACOP) will be run and managed by a Special Purpose Vehicle (SPV) – private pipeline company. This means that a private company will be incorporated with joint venture partners – Tullow Uganda, Cnooc Uganda Ltd and Total E&P Uganda, and the governments of Uganda and Tanzania as shareholders in the company” (Ssekika, 2017)

Certainly, this will put a strain on the projects. They have to deliver another type of arrangement to make sure they get funding and have the funds to pay the added interests the banks wants. The added points on the dollar and the interest-rates will hit state-owned firms and the state itself. Since the pipelines most likely becomes more expensive and will be less profitable.

That the World Bank is pulling out of these projects is all within line of the Paris Accord, as they have professed is the reason. Still, this will make these projects more expensive and make sure they are earning less on it. Unless, the crude-oil prices are going up to a level that makes these investments even more profitable. That is only for time to tell. Since it is costly projects and also sophisticated to build. There is needed lots of expertise combined state planning to achieve the development plans.

This is just the beginning, but the pipelines and these investments are vital for both Kenya and Uganda. As the governments are already borrowing state funds on the possible earnings from the oil reserves in their basins. Therefore, they need to drill and need the petrodollar as quickly as possible. Peace.

Reference:

Mutegi, Mugambi – ‘World Bank dims Turkana oil hopes’ (14.12.2017) link: http://www.nation.co.ke/business/World-Bank-dims-Turkana-oil-hopes/996-4227848-u02v8n/index.html

Ssekika, Edward – ‘East African Crude Oil Pipeline: The Inside Story’ (11.12.2017) link: http://www.oilinuganda.org/features/economy/east-african-crude-oil-pipeline-the-inside-story-details-emerge-of-how-the-crude-oil-pipeline-will-be-financed-managed.html

World Bank – ‘Q&A: The World Bank Group and Upstream Oil and Gas’ (12.12.2017) link: http://www.worldbank.org/en/topic/climatechange/brief/qa-the-world-bank-group-and-upstream-oil-and-gas

We thought we seen the worst; but the here comes the 20 Point Programme from Mzee!

Sometimes I think President Museveni is a bit too smart for himself, that must be it, as he have since start of his reign added and amended more plans than useful laws. That is something the world should know by now. He entered his first term after rebellion with the 10-Point Program that was supposed to reinvent and remake the democratic, accountability and facilitate the development of Uganda. Something that has been stalled for wish to stay in power and also his own nepotism, corruption and cronyism in government and state functions in general; together with no-need to leave the militaristic maneuvers of government.

“The NRM under the leadership of President Y. K. Museveni came up with the ten point programe of action. In 1987, Basing on the ten point program, President Museveni launched a Minimum Economic Recovery Programme followed by a series of reforms aimed at restoring macro-economic stability to provide a favourable environment for economic growth and private sector development. The key reforms were, liberalization, privatization, currency reform, changes in tax and fiscal policy plus restraining expansion in government expenditure while maintaining focus on economic recovery and growth” (Uganda 25 Years of Nation Building and Progress, Jan 1986 – Jan 2011, Printed: May 2011).

That is why that when I read that President Museveni had the genius idea of a 20-Point Program, I was latterly laughing and crying in sadness of this so-called leader. Who supposed to lead and make change; after thirty years in power with a 81 Cabinet and created astonishing amounts of districts and sub-counties, that every town and nearly all villages have either one or two central LCV and other councilors to be bribed by the central-government. And in his genius attempt to spoilt the trade, he comes with another plan to cover over the atrocities and pledges that we’re recycled under campaigning in 2015 and 2016.

This comes from the leader who of late has already these wonderful plans to hold onto and supposed to finish in his lifetime, as he wants to promise the Ugandans the middle-Income position and also economic progress in the levels of South Korea and Singapore. Though, the corrupt and donor-friendly behavior is still necessary since the Petroleum money, is still not certain as it is still needed more development and investment before the profits from the black-oil drilled in the Lake Albert basin and Albertine region.

The first plan that was supposed to take over the failed 10-Point Program from the Economic and Development of the Republic, where the magical and all-covering; the Second plan the famous ‘Vision2040’, where all pieces of government and private sector we’re interconnected as the NRM-Regime had plans to reconfigure and also establish what they had did between 1986 and 2013. The plan that we’re released in 2013 said this: “a transformed Ugandan society from a peasant to a modern and prosperous country within 30 years”; I do not feel the need to say how much further they have come in the last three years.

Hon. Francis Mwijukye said: “Today I visited Karungu government secondary in Karungu subcounty- Buhweju district where I found students studying under very disturbing circumstances” (Mwijukye, 25.06.2016)

The third plan that comes to mind was the National Development Plan II (NDPII) who we’re drafted and surely released during the 2015, and we’re written March 3, 2015. This was a plan for the infrastructure projects and the defining projects that we’re interconnected with railroads and also the major road projects of the UNRA, which is certain a magnifying economic prospect as the investments in infrastructure as the unfolding economic problems, that recently was reported from UNRA. So the President has issues with this alone, before releasing the 20-Points Program of 2016.

So with the hearing of a new plan from the grand National Resistance Movement and the Presidency of 30 years, if he had finished or wished to finish the first plan, the 10-Point Program. But, that wouldn’t make the political battlefield and the regression of progress so obvious; if anybody believes he will ever finish a program or even sufficiently have due-diligence behind a new program, you should dream on or reconsider you thought pattern.

With the newly released 20-Program Plan of 2016, is a rehash of old-ideas into a new format with the mix of the Vision2040, 10-Point Program and the National Development Plan II. That is a combined of these visions, as the 10-Point program is totally out of whack, the 2040 is in the midst of it and been in the works for three years without any real progress on the matter. The NDPII is a framework for basic transport and infrastructure that are parts of all the three other plans. So, this is far from finish and with the UNRA troubles, the World Bank suspension and the others issues with financing the grand infrastructure projects of late, while the Standard Gauge Railway and the Northern Corridor Integration Projects (NCIP), which is a collective planning of infrastructure between the East African nations we’re it need cooperative effort from the countries.

So with all of this in mind, when reading the progressive, the revolutionary, the rebels new plan like the monstrosity levels of belief that he can sell yet another amazing plan to the public and donors. The reassessment the donors should do is that this in the mass of affairs and tricks the NRM-Regime have come with for three decades and was supposed to be new-found governance; instead it has been more of the same, just in another name, another package and another head-honcho who been able to smile with Bill Clinton, Gadaffi and all the dignitaries that wanted spend money on his government and newly created institutions under his leadership. This has all happen, while the Western countries have accepted the atrocities and brutality against civilians for the peace and assurance of progression of democratic values that over time have been proven as fool’s gold.

The reality of this new Plan is to repackage the same of promises and the so-called progression of the government institutions and the civil service delivery as hospitals, schools and roads. Through the neo-liberal structural adjustment plan that we’re accepted to get more World Bank loans in the 1980s, while now because of less donor-funding adding more loans into the bloated government budgets together with bigger government spending on growing parliament, growing districts and sub-counties, while the added expenditure on the projects as the rising prices on roads with little due-diligence, higher interests on the fallen loans and the expenses on military equipment. This all with the steady level of inflation and proved little will to change the service delivery from the NRM-Regime, as the international community have let most of it go without any impunity or real care.

As even the European Union proudly did this recently after the fraudulent election they discredit in their own report, still they we’re so giddy to do this:

“Goverment of Uganda to hold political dialogue with European Union as mandated in Art 8 of Cotonou Agreement” (Emma Were Tinka, 28.06.2016). So the true ethics of the European Union and democratic values can be traded of with a decent agreement and when the NRM-Regime can even be validated by EU, this talk and consider, even sign the agreement, but they might not implement it; as the due-diligence have never been a thing for Museveni, so after all this year? Why should it all of a sudden matter?

This new plan is another one of his schemes and plot to get donor-aid and get funding for his nepotism, his cars and airplanes as the direct budget and the over-priced infrastructure projects have silenced his critics as that have been used on tear-gas, Russian fighter-jets and other needed procurement, not on fixing schools and buying school-books for the students. That is no-need and not proved added value. This 20-Program plan is just non-sense and the ones that buys into it, are long lost causes like Ofwono Opondo and Andrew Mwenda. Peace.

13th Summit of the Northern Corridor Integration Projects – Joint Communique (23.04.2016)

The Battle for the Oil the Coast; Double pipelines seems to be the END-game: Kenyan on their own, while Uganda picks route through Tanzania!

There was not too far ago when the Government of Kenya was dreaming in their wild pipedream to advance their own ideas and manage to hook the Ugandan Government so they wouldn’t continue with the progressive agreement with Tanzanian counter-parts. In the end it seems like the waves are long gone. The wind from Lake Albert never seemed to turn.

We had to wait until 23^rd April 2016 to be reassured that the President Museveni and his NRM could not be persuaded to be a continued or locked into the LAPSSET:   Lamu Port Southern Sudan-Ethiopia Transport. So it would be from Hoima, Western Uganda into the Northern Kenya bypass into the prospected lines would go there both from Ethiopia and South Sudan down to the shores and bays of Lamu Port.

Instead Uganda have continued and promised to honour the 2015 Memorandum of Understanding with Tanzania the Uganda–Tanzania Crude Oil Pipeline (UTCOP); that goes from Hoima or Lake Albert through the Tanzanian nation down to the shores of the Tanga Port. This is also because of the agreements and assurance of both governments and also the new Oil-Drilling companies in Uganda like Total and ENI. They have also spoken their peace and does not feel safe as where the Pipeline goes through uncertain areas of Kenya.

So there will be two pipelines and in close reach and also with distinguished end-game; as the economic prospects are changed, the rates for oil-transport will be lost in the sight of Kenya. The Kenyan cannot now have future prospects of the oil-rates and jobs as a Pipeline gives. They will have cough-up the funding and most likely more borrowed money for the grand infrastructure.

The Ugandan will use funds and borrow monies to fund the pipeline-building and also give tax-payers and jobs in Tanzania. The rates by just transporting the oil from A-B will be a good tax-base for the Tanzanian Government. President Kenyatta hoped that his close relationship would help him and also with his Deputy Ruto also campaigning for Museveni to give something back. Seems like that didn’t help as the President Kikwete already have sweetened the tea and offered something that also helps to calm down the Oil-Drilling investors and their envelopes.

CS Keter of Kenya must be disappointed as his detained moment in Tanga Port came to nothing and the KDF forces inside Somalia are the reason for the fallout. Though I doubt that is the main reason. That is the diplomatic reason from the Ugandan Government. Ugandan Government and NRM-Regime is about money. They are all about the money, therefore the non-accountability and non-open tax-regime. The Ugandan Government would never say that is the main reason, but if Total, ENI and CNOOC words and tax-base is the current controlling the reasons for President Museveni. As he wants them on his side; so he can have secret deals with the Oil-Companies and keep the low-key taxes; not to talk about the un-disclosed agreements between them and the government of Uganda.

Therefore I am not surprised I think they only went into the talks in Kenya to please their neighbour and trading-partner as the relationship have soften over the last few months and the President of Kenya and President of Uganda have cherished more time together. As President Museveni have played the big-man and asked for suitors while waiting for the words from the Oil-Companies. The excuse of not taking Kenya is certainly been given by the Oil-Companies as the Ugandan President will only take the highest rates and the lowest fees for the construction. We can see that the borrowed monies that will be used should have low-charges and be clearly not too bad to GDP or the national inflation.

Still, the matters remain how the relationship really is between Uganda and Kenya. As they have fought over the little Migingo Island and chicken export fiasco. An the Recently also covered a squabble over Yellow Fever Notes to give to Border Patrols to be relieved and be allowed to Enter into Kenya from Uganda. So with the decision to abandon all hope for Kenya and totally give way to Tanzania; will be hurting the pride of the Harambee in the coming weeks. Especially since the Kenyan has tried to get the Ugandan’s to use their port instead. This backfired and didn’t work.

I hope that this doesn’t stop the other Northern Corridor Integration Projects (NCIP) as of the Standard Gauge Railway and others that can connect the nations and bring softer transport of people and goods between the East African nations. Certainly the matter is at hand and the justification would be “terrorism” as why the pipeline didn’t get extended. Though I believe it is much more to say “cash money” and in general the black gold revenues.

This here will certainly be uncovered over time and the real reason will show-up by the Al-Shabab is a deflection and we know the gig is up. Peace.

The Battle for the Ugandan oil to the Coast; As the Tanzanian and the Kenyan suitors try to bait Mzee

There is the time and day where the President Museveni walks into Tanzania speaks to the new President Magefuli and promise more money for sustainable pipeline through Tanzania down to the coast. Later in the month he travels to Nairobi and meet President Kenyatta, and promises to ship the oil in pipelines through Kenya down to the Coast.

As both Big-Men do their bidding and promises quality lines in safe pastures with clean operations and good relationship between the countries and their businesses. While Tanzania was first in this time around, the Kenyan counterparts would not be worse.

The Ugandan Government have gone back-and-fourth promised Kenyan government before and made plans fitting the Kenyan perspective, so early in March after the general Election, the President met with President Magufuli seemed to be a grand deal, as the Tanzanian said they could start with building as early as August 2016 if the Ugandan Gov. was ready for it.

Now today it seemed as the Ugandan government have gone away from the Tanzanian agreement from early in month. As the Bunyoro oil fields will build pipelines from there down to Kenyan coast. A gentleman’s agreement between Uhuru and Yoweri, as they have worked together during election time, with funds and that President Museveni wants to give something back and show loyalty to the Kenyan President.

Tanzania and Uganda had even signed a framework agreement for the crude pipeline on the 12^th of October in 2015. That seemed just to be a plan and not official document as the President of Uganda, seem now to be keen to repay his fellow mate in Kenya.

We never know is if this an reaction the EAC Inter-Burundian Dialogue of Peace between the Burundian stakeholders where President Museveni has lost his position as the opposition in Burundi claimed he was biased towards President Nkurunziza and wanted somebody else, as the African Union and EAC let former Tanzanian President Mpaka take the key role, as the mediation will be led by him, not the Ugandan President. That must sting a bit to man who wants to be the grand King of East Africa and overrule all estates and areas at all cost. That might be why they scrapped the agreement with Tanzania when it comes to the Pipeline.

This here will be proof of who wants to be the cadre for the monies that Ugandan President could bring and how far they will go to eat from his hands. As the President plays the field on both home-grounds and hope to gain the most for himself for as little as possible, while serving loyalty to the ones he picks. The partly agreement that was written during last quarter of 2015 seems too premature, as the joint statement today assume that the Kenyan government takes the last straw. Especially with the knowledge of the funding of President Museveni campaign parts of those funds to his war-chest came from the mountains of Kenya and not from Tanzania.

Because a man like President Museveni is more about his own will than the best for the oil or the best for the companies involved, because he want to be sure that the decision is benefitting him and his loyal cadres. Not anybody else, therefore he plays with Tanzanian and Kenyan officials until he gets the best deal for him, even if that strands the already made agreement with Tanzania, as the Kenyan suitors want to make sure that he gets the sugar and the tea he needs to sign a joint deal with them, even keep the Migingo island, as the money from pipeline can bring wealth and create jobs in Kenya, more than a few fishes and stones in the middle of lake. Peace.   

Joint Communique – 10th Northern Integration Project Summit (Kampala, Uganda 06.06.2015)