Though Ethiopia and Kenya share more than just a political and geographical border, the former has historically remained aloof from regional economic groupings. But not any more. As fortunes change for both nations whose long distance athletes rule the world, they are drawing closer in a marriage of convenience. Already, the governments of Kenya and Ethiopia have scrapped entry visa requirements for the citizens of each nation making it easy for free movement across the common border.
Kenya is also building a road to connect Nairobi in the south to Addis Ababa in the north. The road, known as the Mombasa-Nairobi-Addis Ababa Corridor, will enter Ethiopia through Moyale. It is expected to open up a vast territory and greatly improve the flow of trade between the two countries. In fact, experts say the completion of this road in 2010 will boost trade between Kenya and Ethiopia, enabling it to jump from the current US$35million to US$175million.
The transit of goods to and from the port of Mombasa, too, is expected to increase from zero to 900,000 tonnes, representing 20% of total Ethiopian sea fret.
Besides helping enhance regional trade between Kenya and Ethiopia, this AfDB-funded road network is expected to provide greater security and conflict resolution in the area. The Mombasa-Nairobi-Addis Ababa road corridor is part of the Trans-African Highway corridor from Cairo to Cape Town.
With a good road network, Ethiopia will particularly benefit greatly as it will have access to Kenya’s Indian Ocean port of Mombasa after it lost Asmara when Eritrea gained its political independence. Already, the Economist Intelligence Unit estimates that by 2011 the economy of both nations will have a combined output of US$72 billion and a population of more than 120 million ’80 million Ethiopians and 40 million Kenyans’ people.
Though not by design, Ethiopia and Kenya have several things in common: they share the rift valley from world beating distance runners come, both nations are said to be the highest food importers in the region despite their favourable climatic conditions and fertile lands, both are leasing out vast swathes of agricultural land to Middle Eastern nations like Saudi Arabia and Qatar, and both are said to be allies of the United States of America in the latter’s anti-terror campaign.
But perhaps what is drawing these countries together is destiny more than their own calculated moves. While Ethiopia faces an acute currency crisis and hostile neighbours across all its borders except with Djibouti and Kenya, it is changing fortunes within East Africa that are pushing Kenya closer to Ethiopia.
Like a once wealthy man ditched by his wife due to declining fortunes, Kenya–whose economy easily dominated East Africa as recently as 2005 with a Gross Domestic Product of US$20 billion–is now overlooked by Uganda and Tanzania, her neighbours and historical trading partners. These East African Community member states are both in search of new trading partners as their fortunes look up while those of Kenya appear to be dimming. While Uganda is expected to start drilling petroleum soon and is already courting Southern Sudan, Rwanda and Burundi, Tanzania’s minerals and natural gas are already enabling it to catch up with Kenya’s economy. Accordingly Tanzania is overlooking Kenya and establishing new links with the Southern African Economic Development (SADC) member states with whom it has had historical links as a ‘front line’ state against Apartheid in South Africa.
Pushed between a rock and a hard place, increasingly isolated Kenya is forced to look elsewhere for trading partnership and thus the strengthening ties between it and Ethiopia whose GDP overtook Kenya’s in 2008 as the most dominant economy in eastern Africa. If all goes as per plan, each nation will have an output of US$36 billion in 2011.
But it is the giant US$1.7 billion hydroelectric power project–the Gilgel Gibe III–that opens a crucial strategic front on Kenya’s northern border. The dam, situated on the Omo River, is expected to facilitate the inter-connection of the power grids of both countries. This will enable Kenya access additional electricity to make up for the energy supply shortage that has been experienced in recent years as a result of erratic weather patterns and rapid economic growth. Kenya is expected to receive one-quarter of the 1870 MW power to be generated from the dam in exchange for providing Ethiopia with access to its strategic location, relatively well developed infrastructure, particularly the Mombasa port and efficient internet connection.