East Africa and its trading bloc, the East African Community, are about to change forever, possibly transforming into a Greater Horn of East Africa Economic Community.

Many factors are causing this change. There is Burundi and Uganda’s lead roles in Amisom, the African Union peacekeeping mission in Somalia. Then also Rwanda’s long-running involvement in peacekeeping in Darfur and now on the South Sudan-Sudan border. More lately, Kenya’s entry into the Somalia conflict and its evolution into what analysts are calling a “two axis nation.” All these point to a shift of attention to and engagement with the Horn.

Read: Seven lessons Burundi and Uganda can teach Kenya’s soldiers)

More than any other East African country, Kenya is being pulled in many directions. A senior official acknowledges that Kenya will indeed become a “two axis” nation. It will continue to deepen its trading relations with its old partners in the EAC, especially Tanzania and Uganda. Indeed, last week, the government announced that its maize imports from the two countries had doubled to 339,323 90-kilogramme bags in April, up from 148,860 bags in March. (Perhaps the most revealing number is that over the same period in 2011, Kenya imported only 26,732 maize bags from its partners).

However, the most important strategic and “big future” economic relationship for Kenya will not be with the current EAC partners, but the Horn of Africa nations: Ethiopia, South Sudan, and Somalia.

In January, Kenya’s efforts to tackle a chronic energy deficit resulted in a deal that will see East Africa’s largest economy import 400MW from Ethiopia from 2016. Energy Minister Kiraitu Murungi said then that Kenya will import 400MW from Ethiopia for a period of not less than 30 years.

(Read: East Africa plunged into darkness despite massive potential)

The two countries are negotiating a $1.2-billion loan with the World Bank, the African Development Bank and the French Agency for Development for the construction of 1,055km of high-voltage transmission line connecting the two neighbours. Construction is expected to take three years, from 2013 to 2016.

Unarguably, however, the two things that will radically refocus Kenya’s gaze north are the Lamu Southern Sudan-Ethiopia Transport Corridor (LAPSSET), and the Somalia stabilisation project. (Read: Lamu's $16bn makeover)
LAPSSET’s key component is the Lamu port, which will have a transport corridor linking it with Ethiopia and South Sudan.
In addition to the port, the project also incorporates an oil refinery at Lamu and a 1,720km standard gauge railway line to Juba to handle high-speed trains able to run at up to 160 kilometres per hour.

Also envisioned is a two-lane highway from Lamu through Isiolo to Nakodok, a pipeline to transport crude oil from South Sudan to a refinery at Lamu, three airports at Lamu, Isiolo and Lokichoggio and resort cities at Lamu, Isiolo and on the shores of Lake Turkana.

Once the railway line is completed, by the year 2030, it will handle up to 30 trains to and from South Sudan and 52 to Ethiopia daily at its peak.

For LAPSSET to work, the attacks by militants in the northern part of Kenya and Lamu must stop, which requires a stable Somalia. Kenya, a nation long averse to sending its army to wage war beyond its borders, broke from its skin and in October last year sent a force to secure the common border and push the Al Shabaab militants out of the strategic Kismayu port.

Uganda, which is scheduled to begin oil production by 2017, and Rwanda, also have an interest in how LAPSSET comes along. So far it has had to rely on Mombasa port for most of its exports and imports.

But Mombasa port, despite its huge potential, is a shambles. Mombasa is congested, despite the relatively small annual volume of 770,800 containers it handles. To demonstrate how much better Mombasa could do, Wolfgang Fengler, the lead economist in the Nairobi office of the World Bank, from where he covers Kenya, Rwanda, and Eritrea, noted that the volume of goods Mombasa achieves in a year, Shanghai and Singapore handle in about a week.

Read: Give Dar, Mombasa ports to EAC)

A container imported from Singapore spends 19 days at sea (over 7,500 kilometres), but needs 20 more days just to make it from Mombasa to Nairobi by road. Bringing a container from Tokyo to Mombasa will cost you less than bringing it from Mombasa to Kampala.

The modernisation of Mombasa port has now been complicated by politics, as local families and political groups fight to control it.

A secessionist group, the Mombasa Republican Council, has also been more assertive in recent months, exploiting Coastal grievances about marginalisation and exploitation by elites from the “bara” (inland.) An economist who is closely involved with LAPSSET says that because Lamu Port will be more modern and have better facilities, most of Uganda’s oil will probably be exported from there. Though farther away than Mombasa, it will still take a shorter time to get to market through Lamu.

Rwanda, the loudest EAC member when it comes to complaining about red tape and non-tariff barriers like roadblocks and inefficient ports in the region, is also likely to shift a chunk of its business to Lamu. In that way, the state of affairs in north of Kenya and south of Somalia will become an existential issue for Rwanda and Uganda too.

(Read: Rwanda ready to take neighbours to court)
The Kenya army in Somalia meanwhile is “re-hatting” itself as part of Amisom, and on March 3 KDF Col Cyrus Oguna told a press briefing that the mandate under which KDF is operating, ends on October 31. “Since we were integrated into Amisom, we will operate within its mandate, which expires on October 31 this year. We expect to be there for as long as that mandate is running. The mandate within that resolution is peace enforcement, which is meant to provide an environment within Somalia that would allow for political processes to take place,” he said.

Kismayu, which KDF is eyeing, could prove to be decisive in the shape of the new security and political architecture in the region.

On May 19, the officer commanding the Ethiopian army contingent in Somalia, which captured the Somali city of Baidoa in February and handed it to the Uganda contingent in Amisom when it started withdrawing from there at the end of April, said it would not be a problem to take Kismayu. “Truthfully Ethiopia has fulfilled its mission in Somalia and it is not a problem for our military to liberate the port city of Kismayu,” he said.

Ethiopia’s Prime Minister Meles Zenawi had sent out a similar signal, saying, “Our troops have forced Al Shabaab from a large part of land in south central Somalia, and soon we will take over more key strongholds.”

Last week, Ugandan, Burundian and Somali National Army troops captured the strategic town of Afgoye, the breadbasket of Somalia. The Al Shabaab had massed their men and key assets there after they were pushed out of Mogadishu by Amisom at the end of last year and looked ready to put up a fight. But faced with a combined force of nearly 9,000 men with some of the heaviest weaponry used in the Somalia fighting in recent years, Al Shabaab was quickly overwhelmed and the remnants fled Afgoye.

Amisom sources say that the Amisom and TFG troops are expected to move on to Kismayu now that they are done with Afgoye.

On Wednesday, in one of its most muscular moves in the region for weeks, the Kenya army and Somali troops seized the towns of Afmadow and Hayo as they prepared to capture the port city of Kismayu from al-Qaeda-linked militants, spokesman Emmanuel Chirchir said. At least 17 suspected members of the Al Shabaab militia were killed in the attacks.

The Kenyan Defence Forces’ “focus is on Kismayu as other Amisom forces roll down southward,” Chirchir said. “Al Shabaab’s reign in Kismayu will soon be interred.”

There are many views about why Kismayu has become so important for everyone now.

With the end of the transition period nearing in August, and a new constitution and parliament soon to be elected, the African Union is said to be set on ensuring that no “second Puntland or Somaliland” crops up in Somalia.

Puntland and Somaliland peeled themselves off from war-ravaged Somalia in the 1990s and set up as autonomous territories that soon became more stable and prosperous than south and central Somalia.

While Puntland has agreed to join in the talks about a new constitution and recreating a united Somalia, Somaliland has not, and is still dead set on becoming an independent state.

Kenya’s main Kismayu ally is the powerful Ras Kamboni militia, drawn mostly from the Ogadeni clan. The Ogadeni are fiercely pan-Somali and nationalist, and they form a large proportion of the Ethiopian Somalis. Addis Ababa is reported to be afraid that if they became hegemonic in the south, they could form an independent “Jubaland” state, using the lucrative Kismayu port trade to raise resources to sponsor the secession of the Ogaden province of Ethiopia.

Ethiopia will do anything to prevent that. If it sends its troops to Kismayu, it could find itself at odds with Kenya, with which it has had a defence pact since about 1964.

If Amisom and TFG forces get to Kismayu first, this potential face-off can be prevented. In any event, these concerns ensure that Kenya, Ethiopia, Amisom and any new Somalia government will have to reach an understanding about the future security and political situation in south Somalia. Even with that, it is unlikely that Kenya will ever totally take its feet off south Somalia.

The Amisom mandate will have to end in Somalia, and the only structure left through which Somali and Ethiopian concerns can be dealt with is the EAC. Though the Inter-Governmental Authority on Development (Igad) would have been more suited, Somali nationalists distrust it as a tool of the Ethiopians, which partly explains their application to join the EAC. In the EAC, Ethiopia can be counter-balanced by Kenya and Uganda, and countries that don’t have a long history of entanglement in the politics of the Horn of Africa like Rwanda and Burundi.

Though Ethiopia has not yet publicly applied to join the EAC, sources in Kampala say Ethiopia has given “clear signals to President Yoweri Museveni that it wants in.” Kenya too has got the message. However, Ethiopia is said to be too proud to apply for membership and be rejected as has happened with (north) Sudan, or to be kept waiting as has happened with South Sudan and lately Somalia. There will probably be an announcement of Ethiopia’s entry into the EAC in the next few months, without any public marriage proposal.

Following the recent border war between South Sudan and Sudan, Uganda is pushing for quicker action on South Sudan’s application to join the EAC, so the fragile new nation can receive protection from member states under its new common defence pact.

Uganda and Burundi will not withdraw from Somalia, and leave their “project” behind. They will most definitely bring it along with them into the EAC. This will complete the region’s metamorphosis into a Greater Horn of East Africa Community. For Kenya, though, its new identity will not be complete in the new order.

Under the new Constitution, Kenya will develop a highly devolved “county system,” which has no similarities with any other country in the EAC, its closest counterpart being Ethiopia’s provinces.

“While Kenya will be divided between attending to matters in the Horn of Africa, and also minding its economic interests in the EAC,” said a senior official, “the next president will probably pay more attention to and spend more time with the county governors, than with East African leaders.”

While the “two axis” forces will be pulling at Kenya, at the same time the political leadership will have to be more provincial because of the re-engineering of the politics that happened with the new Constitution.

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Twenty-six years ago this wasn’t the case; it looked like the region was going to end up with a Central and East African Community, not a Greater Horn of Africa Community. In this special report, and over the next two weeks, we shall explore what changed and sent the region in the opposite direction.