East African Infrastructure

During the past decade, China and Chinese companies have been investing heavily in development projects in Africa. Many of these projects have helped to improve these countries’ economies. Currently, the East African Community has embarked on an ambitious infrastructure project to build modern rail links throughout the region.

For many countries, one of the biggest challenges in development comes from outdated and poorly maintained transportation networks. This is the case in much of the East African region. Prior to the start of the East African Railway project, the rail network in the region was still mostly a legacy of the British colonial period and dated to the 1950s. The new project, spearheaded by Kenya as part of its Vision2030 initiative, aims to build a modern railway network to connect all the members of the East African Community and neighboring countries. The project will link the port city of Mombasa in Kenya with cities as far away as Addison Ababa, Juba in South Sudan, Kisingani in the eastern DRC, and Bujumbura in Burundi.

The deal on the railway’s development was put into place by China’s president Xi Jinping and Kenya’s president Uhuru Kenyatta in August of last year. The first segment, linking Mombasa with the Kenyan capital of Nairobi further inland, began work in November of 2013 and aims to be fully completed by 2017. The contract for construction of the Mombasa-Nairobi connection was awarded to a Chinese government owned corporation. However, this has generated significant controversy surrounding the $5.2 billion project. Allegations of corruption were raised against the awarding of the project, and now a parliamentary inquiry puts the much needed infrastructure project in jeopardy.

With luck, the improvement of the railway system will continue as planned, as the region desperately needs this update to its infrastructure. Trade within the members of the East African Community has tripled in the past decade, and much of the oceanic trade coming in and out of the region flows through Mombasa. This has created significant congestion in the port, to the extent that customs officials from Uganda, Rwanda, and Burundi have been sent to Mombasa to check containers there in an effort to speed up shipping moving through. If East Africa wants to encourage global investment and develop its economy compared to even other parts of Africa, the East African Railway is practically a necessity. Every country that connects to the railway would gain some benefit from a modernization of the region’s infrastructure.

On a more local scale, the Ethiopian capital of Addis Ababa is already undergoing another large scale infrastructure improvement in the construction of its new light rail system. The system, two lines running east-west and north-south intersecting at the city’s main rail terminal, is set to run over 34 kilometers once it is completed. The $475 million Addis light rail is partially funded by the Chinese government, with the Ethiopian government providing the remainder of the funds. A Chinese corporation has also won the bid for the cars that will run on the system. The project began in 2012, and is currently just over halfway complete with six kilometers of track laid.

The Ethiopian Railway Corporation, overseeing the project, estimates that the light rail system will be complete in 2015. The system will be able to handle over 80,000 passengers per hour, an astonishing number and likely a welcome option for a capital of over 3.5 million people. The light rail system will bring a modern eco-friendly public transport option to a growing city that largely still relies on old public buses and private minibuses for its mass transit network. If the Addis light rail is successful, it would be a great boon to the city and could serve as a model for other African cities to adopt in developing their own mass transit.

These two projects are at the forefront of infrastructure development in eastern Africa. And behind them lies a growing shift in the direction of foreign investment in the developing world. More large scale projects such as these are being funded by China and Chinese corporations. The United States is falling behind China in this investment in Africa and the developing world as a whole, and it is going to have consequences. As of 2014, the United States has signed only 2 bilateral investment treaties with African countries, while China has 24. The United States, which should be a major player in terms of foreign investment, is falling behind in its participation in many countries on the continent. If the United States continues to ignore the opportunity of investing in Africa’s development and its future, it is risking losing out on a potential market of a billion people while China gains the goodwill of many African governments.

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2 Responses to East African Infrastructure

  1. Maurene says:

    You could pretty much replace Africa with Afghanistan, and it would ring true as well. Seems like we are spending all our money investing in security and then China and others follow and invest in infrastructure, providing their own people jobs and access to resources. That has certainly happened over here.

  2. Annie Moulton says:

    Great post Charlie! I think the other important thing is that few of the Chinese investment projects leverage local labor or materials, robbing East Africa from the much-needed ancillary economic and social effects of massive infrastructure construction. You might like this report, it certainly supports your argument that the US is substantially lagging in infrastructure investment: http://www.brookings.edu/~/media/research/files/reports/2012/1/intra%20african%20trade/01_intra_african_trade_full_report.pdf

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