Oil pipeline and railway could have tamed rising cost of living

At the beginning, many of us thought we would only be watching the dramatic events in North Africa on Al Jazeera without feeling the impact here in Rwanda or East Africa. But that was not to be. As we watched Sarkozy and Obama’s fighter jets bombing Libyan infrastructure in an effort to ‘protect civilians’ the prices at the fuel stations down here were changing. As we laughed at Col Muammar Gadaffi’s speeches and listened to Seif Islam Gadaffi’s views, many of us failed to see that life was not just becoming hard for them but for us as well. The rising cost of petroleum consequently means that general living expenses will follow the upward trend. We are finally feeling the pinch down here in the region. In Kenya, protesters demanded that their government intervenes and indeed it did reduce the tax on diesel and kerosene. In Uganda the protests took a violent turn with the government perceiving them as Egypt-style insurrections aimed at regime change. Due to the rise in fuel costs, I have been forced to cut down on my haggling habit especially when I have to take a Moto taxi from one place to another. My pleas of having less money than what the moto fellow is suggesting are often met with the line, “Ariko grand frere essence yarazamutse.” (Loosely translated as; “But my brother, fuel is now more expensive.”) I am not an economist, so, I am not going to bore you with inflation and oil price statistics although we have been told several times that the current situation is related to the rising cost of crude oil on the world market as well as inflation. This current tough situation would have been more bearable if the much talked about railways and oil pipelines had become a reality. In the East African Community, Uganda, Rwanda and Burundi are all landlocked countries. We get most of our essential items from the ports of Mombasa and Dar es Salaam in Kenya and Tanzania respectively. The risk of being landlocked was well articulated the time when Kenya erupted into post-election violence soon after the disputed December 27, 2007 election. Fuel prices skyrocketed and many fuel stations did not even have the expensive fuel in stock. Policy makers in the landlocked countries should therefore be spending more of their afternoons thinking about how to address this problem. It is not enough to talk about East African integration, without emphasising the need too lessen the burden of being landlocked. That is why it is indeed a pity that nothing tangible has been done about the construction of new railways and oil pipelines. It is a shame for us to continue relying on the archaic railway system bequeathed by the colonialists in this day and age. There was talk of extending and modernising the railway system in the region, but it has mainly been just that. Talk. And yet rail transport remains the cheapest in the world and if it was fully utilised, then the cost of transporting goods in the region would be significantly lower and so would the cost of living. The other local issue that explains why we are suffering with rising living costs is because the issue of extending the oil pipeline from Eldoret to Kampala and then Kigali simply gathered dust in government drawers. Uganda, Rwanda and Burundi have been sourcing petroleum products from the Eldoret refinery that could not cope with demand forcing countries to buy directly from Mombasa and Nairobi. To ease this problem, it was agreed that the pipeline be extended from Eldoret to Kampala and then to Kigali. Even before all this, the Kenya Petroleum Corporation was supposed to repair the existing pipeline to increase its capacity. The Libyan-owned Tamoil East Africa was the company that won the bid to do the job of extending this pipeline and bring down the cost of petroleum products in Uganda and Rwanda. A deal was signed by Tamoil Africa holdings Ltd, the parent company of Tamoil East Africa. Although it had been predicted that by 2011 the pipeline would have reached Kigali, nothing has been done since them. Uganda’s discovery of oil is often given as one of the reasons for the delay. Apparently, Uganda wants either to construct a mini refinery for its new found oil reserves or to change the design of the pipeline to allow it to pump crude oil from Uganda to Mombasa coast. With Col. Gadaffi under fire from NATO jets and all his foreign assets frozen we are in for hard times indeed. An efficient railway system and a functional oil pipeline that delivers oil to Kigali in a timely manner is are all we need to tame the rising commodity prices the region is enduring right now. ssenyonga@gmail.com