The World Bank has announced a loan package of over $1.2 billion to assist in development projects. The majority of the money will be used to help improve infrastructure, specifically inland waterways and ports in Tanzania and Kenya. One of the aims of the projects is to boost integration between the countries of this region.
The funds will initially be used to help revive the waterways on Lake Tanganyika and Lake Victoria, two of Africa’s most iconic lakes. There will also be multiple projects in Mombasa and Dar es Salaam to improve the efficiency of these two busy ports.
The East African Community, which consists of five nations – Rwanda, Burundi, Uganda, Kenya and Tanzania have a combined economic total of some $110 billion. This could be increased markedly if there was better cross border infrastructure, which these loans will hope to help rectify. There have been several large oil and gas discoveries in the area, and there is also a much more increased exploration activity. It is expected that this will identify even more natural reserves in the future.
The gas and oil finds are of course, the reason the World Bank is able to invest such large sums in infrastructure projects. It is essential for extraction purposes that the region has better and easier movement of people, capital and goods. The World Banks loans are expected to fund such projects over the next three to seven years.
Where there is oil and gas, of course investment is normally quite simple to attract. At the meeting in Nairobi, the European Union representative announced that they were ready to support projects for up to $750 million also. These sums are huge but unfortunately the requirements to upgrade infrastructure are even more massive. Several studies have attempted to assess the investment needed with several reckoning sum $68-$100 billion will be needed. This is to help build roads, ports, railways and also to develop the pipelines needed to extract oil and gas.
There is a hope that the area can also get some other improvements specifically in communication technology. It is hoped that with improved internet access, many east Africans and companies can tap into the digital economy. Currently connectivity is patchy, don’t try and stream video from anywhere outside the main centers of population. Speeds are still very low, even if you can get a connection – you might also need some sort of VPN like this method.
Much of the investment for the pipeline infrastructure, will probably be funded by the oil companies however this is likely to impact the net returns that the region can expect to receive. It is hoped that there are additional economic benefits brought from the infrastructure alone.
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