Coalition of the willing: Using the EAC stick to beat Tanzania will only annoy the sleeping giant

Saturday September 07 2013

The nascent troika among Kenya, Uganda and Rwanda has to be understood outside the framework of the East Africa Community. Illustration/TEA

Attempts by states to achieve and retain a position of dominance over others are a recurrent feature of international relations.

This is now seen in East Africa as Kenya fights hard to retain its dominance as the largest economy in East Africa. This development is largely the result of the conflicting national ambitions of Tanzania and Kenya, each of which wishes to exercise paramount influence in the East African region.

This competition, although hidden, has deep roots and is likely to intensify.

The nascent troika among Kenya, Uganda and Rwanda has to be understood outside the framework of the East Africa Community. The emerging ties among the three states underscore Kenya’s broad strategic interests in undermining the growing position of Tanzania as a rising economic giant in the region.

In light of this, Kenya has used Tanzania’s reluctance about full integration into the East African Community as an important propaganda weapon to protect its economic dominance. This is likely to become more important.

Let’s start with port politics; the current Nairobi policy towards Uganda and Rwanda, in general, is largely motivated by Kenya’s competition with Tanzania as the gateway to the landlocked hinterland of Uganda, Rwanda, Burundi and DRC.


This is the open secret that the media, when analysing the East African Community’s dynamics, have chosen to ignore.

However, Manoah Esipisu, the Kenyan Secretary of Communication, was open enough to admit the trilateral meeting had nothing to do with the East Africa Community but, arguably, trade.

He said, “Tanzania, they were not invited because at the moment we are dealing with the Northern Corridor. This was about the Port of Mombasa and the infrastructure that feeds the Northern Corridor.”

Why protect Mombasa now?

Kenya’s status as the region’s logistics hub is under threat after Tanzania signed a deal with China to set up the region’s largest port. The $11 billion Bagomoyo port will be bigger than the Dar es Salaam and Mombasa ports combined, pushing the scales of regional trade in favour of Tanzania.

Bagamoyo port will have the capacity to handle 20 million containers a year, compared with Mombasa’s installed capacity of 600,000 and Dar es Salaam’s 500,000.

This capacity makes it unattractive for anyone to commit substantial investments to Mombasa once the Bagamoyo port is operational.

It is expected that Bagamoyo will be the cheapest destination to ship to in East Africa, and it is therefore in Kenya’s strategic interest to form the “coalition of the willing” under the East African Community banner to ensure that they at least minimise the market share risk caused by the materialisation of Bagamoyo port project.

Kenya has a second threat to its dominance to be worried about, as currently Tanzania has a GDP (purchasing power parity) of $75.07 billion compared with Kenya’s $77.14 billion.

Moreover, Tanzania is sitting on a verified mountain of natural gas resources, enough to make it the largest economy in East Africa and beyond.

The current confirmed gas reserve stands at 43 trillion cubic feet (TCF), valued at around $430 billion, and it is expected that Tanzania’s natural gas resources will rise to 200 trillion cubic feet after the next two years, which will be valued at $2.1 trillion.

Putting aside the $10 billion LNG export plant that Statoil and BG are considering building in Tanzania, the country has also embarked on a quick implementation of its energy master plan, which is a deciding factor in the business environment in East Africa.

To start with, Tanzania has invested heavily in a domestic gas production project that will transform the country’s economy and make its manufacturing industry extremely competitive, with a pipeline funded by a $1.2 billion Chinese loan.

This is expected to be completed by December 2014. It will enable Tanzania to double its power generation capacity to 3,000 MW.

That alone will automatically make Kenya lose its edge as East Africa’s favoured place to manufacture goods. A good example for this is the deals that both Kenya and Tanzania secured when Japan’s Economy, Trade and Industry Minister Toshimitsu Motegi visited them in August.

The minister chose Tanzania as a destination where Japan manufacturers will set up more production facilities, with the aim being to make Tanzania a Japan’s manufacturing hub in Africa.

The dynamics of growth don’t end here for Tanzania’s manufacturing industry. Currently, the Tanzania Investment Centre has recorded more than 50 manufacturing projects in Mtwara only.

That excludes Nigerian billionaire Dangote’s $500m Mtwara cement factory, which is being described as the largest in sub-Saharan Africa, with the capacity to produce about three million metric tonnes of cement annually.

For Tanzania, the travel and tourism industry is one of the biggest and fastest growing sectors, with more than 1 million tourists visiting annually and spending more per visit compared with visitors to Kenya. As a result, Tanzania is improving its infrastructure and increasing the number of accommodation facilities.

This is giving Kenya a headache, as it is forced to confront the reality of decreasing market share. That explains the proposal of the so-called coalition of the willing to introduce an East African tourist visa, which is not beneficial for Tanzania.

Why is an EA tourist visa not good for Tanzania?

For many years, Kenya has used Tanzania tourist destinations to make its tourism package more marketable. However, since early 2000, Tanzania has invested heavily in differentiating its product from that of Kenya, a strategy that has contributed to the 1 million tourists mark.

Looking ahead, Tanzania tourism market differentiation is more important than anything else because it is what informs the choices of its tourist who come to Tanzania. Thus the joint tourist visa will work against Tanzania’s differentiation strategy.

Therefore all of the initiatives Kenya is coming up with under the coalition of the willing are more about protecting its economic interests and can be more easily be achieved by a coalition with Uganda and Rwanda because they are not Kenya competitors in ports or in tourism.

As for the current tense relations Tanzania and Rwanda, these has little chance of changing East African Community dynamics because the competition between Tanzania and Kenya will improve services and give Rwanda a choice as to who delivers goods cheaper to its market; for now, Mombasa seems a winner, but come 2017 when Bagamoyo port is finished, the market will decide.

Emmanuel Tayari is a regulatory risk & quality officer at the Care Quality Commission. He is also an editor for both the North East Law Review and the Continent Observer. Twitter: @mtanzania