Ethiopia to overtake Kenya as Eastern Africa’s top economy

Ethiopia’s economy is expected to overtake Kenya’s this year, buoyed by massive government spending on infrastructure that has kept the Horn of Africa nation in the list of the world’s fastest economies in the past 10 years.

The International Monetary Fund’s (IMF) latest statistical estimates indicate that Ethiopia’s gross domestic product (GDP) is forecast to grow from $61.62 billion in 2015 to $69.21 billion this year, narrowly beating Kenya’s output which is expected to rise from $63.39 billion to $69.17 billion over the same period.

“Ethiopia has experienced double-digit economic growth, averaging 10.8 per cent since 2005, which has mainly been underpinned by public-sector-led development,” the African Development Bank, the OECD Development Centre and the United Nations Development Programme say in the latest African Economic Outlook report.

Kenya’s GDP of $14.1 billion in 2000 was 71.6 per cent larger than Ethiopia’s $8.23 billion in the same year but the Horn of Africa nation has closed the economic gap in the last five years of robust growth.

The IMF’s GDP estimates are based on current market prices using exchange rates prevailing between July 22 and August 19.

Having established its economic lead ahead of Kenya, Ethiopia is forecast to maintain its position as Eastern Africa’s largest economy over the medium term — a position that is also expected to improve its standing as an investment destination.

Ethiopia’s rise as a regional economic powerhouse has mostly been fuelled by mega public sector investment similar to the Chinese model that has enabled the Asian nation to become the world’s second-largest economy in two decades.

READ: Ethiopia leads EA in adopting Chinese-model industrial parks

Ethiopia’s investment, as a percentage of GDP, rose sharply from 20.2 per cent in 2000 to 39.2 per cent last year and is expected to hit a new high of 39.2 per cent of the domestic output this year.

While Kenya has also raised its public investments, including on big infrastructure projects, it remains significantly below that of Ethiopia.

Kenya’s investment as a percentage of GDP rose from 18 per cent in 2000 to hit a high of 22.4 per cent in 2014 before receding to 21.2 per cent last year and is projected to rise to 22.5 per cent this year.

Public investments

Ethiopia’s economy is expected to grow further riding on the state-led investment in infrastructure, according to the African Economic Outlook report.

“Public investments are expected to continue driving growth in the short and medium term with huge investments in infrastructure and the development of industrial parks, prioritised to ease bottlenecks to structural transformation, which will still have to take shape with industry playing a significant role in the economy,” the report says.

Ethiopia’s ongoing projects include the $5 billion Grand Renaissance Dam with a generation capacity of 6,000 megawatts, which is expected to earn the country $1 billion annually from electricity sales, including exports.
source http://www.theeastafrican.co.ke/business/Ethiopia-to-overtake-Kenya-as-Eastern-Africas-top-economy/2560-3408092-bn8yh3z/index.html

Kenya: Kibaki Gambles On Regional War With Al Shabaab

As the Kenyan army ventured deeper into Somalia, in its first cross-border campaign in 44 years, a regional grand strategy to deal with Al Haraka al Shabaab al Mujahideen is beginning to emerge.

Kenya's intervention was under detailed consideration several weeks before Nairobi's official declaration of war against Al Shabaab on 15 October. There is little substance to media claims that United States diplomats based in Nairobi were surprised by Kenya's operation. Both the USA and Britain run substantive regional counter-terrorism operations from Nairobi.

Although the mobilisation was initially announced as a 'hot pursuit' operation against Somali-based groups who had kidnapped tourists in north-eastern Kenya, President Mwai Kibaki's government and Somalia's Transitional Federal Government (TFG) quickly characterised the military campaign as a coordinated effort, even if Kenya appeared to be acting unilaterally. Read more

Kenya sends troops to attack al-Shabab

Somali opposition fighters driven out from two bases near the border in joint Kenyan-Somali military offensive. Kenya sends troops to attack al-Shabab[ Kenyan troops have crossed into Somalia and have driven out al-Shabab fighters from two bases near the border in a joint operation with Somali soldiers, according to a Somali military commander. Kenya has said it will hunt the fighters they accuse of being behind several recent kidnappings of foreigners. Abdi Yusuf, a senior Somali military commander, said on Sunday that fighter jets struck two al-Shabab bases in southern Somalia, but could not confirm if the aircraft belonged to Kenya. "There have been air strikes in ... al-Shabab bases near Afmadow late yesterday and today. We are heading towards Afmadow now. Al-Shabab have already vacated the town," he said. Alfred Mutua, the Kenyan government spokesman, said that its troops had entered southern Somalia to fight the al-Shabab, who it says are responsible for attacks on its territory. Read more

Somalia-Ethiopia, Kenya Conflict

Despite the difficulties encountered in integrating north and south, the most important political issue in postindependence Somali politics was the unification of all areas populated by Somalis into one country--a concept identified as pan-Somalism, or Greater Somalia. Politicians assumed that this issue dominated popular opinion and that any government would fall if it did not demonstrate a militant attitude toward neighboring countries occupying Somali territory. Preoccupation with Greater Somalia shaped the character of the country's newly formed institutions and led to the build-up of the Somali military and ultimately to the war with Ethiopia and fighting in the NFD in Kenya. By law the exact size of the National Assembly was not established in order to facilitate the inclusion of representatives of the contested areas after unification. The national flag featured a five-pointed star whose points represented those areas claimed as part of the Somali nation--the former Italian and British territories, the Ogaden, Djibouti, and the NFD. Moreover, the preamble to the constitution approved in 1961 included the statement, "The Somali Republic promotes by legal and peaceful means, the union of the territories." The constitution also provided that all ethnic Somalis, no matter where they resided, were citizens of the republic. The Somalis did not claim sovereignty over adjacent territories, but rather demanded that Somalis living in them be granted the right to self-determination. Somali leaders asserted that they would be satisfied only when their fellow Somalis outside the republic had the opportunity to decide for themselves what their status would be. Read more

East Africa: Why Capturing Kismayu Could Trigger Proxy Wars for Kenya

In conversations with diplomats, government officials, and intelligence sources in the region, a clear picture has started emerging of a war that has been in the making over the past five years and one that could dramatically reorder the Somali state, and just possibly bring about the peace that has proved so elusive over the past two decades.

According to these sources, Kenya's military offensive was timely, coming as it did when the Al Shabaab militants are at their weakest and at a time when there is convergence of opinion in the wider East African region about what to do about the crisis in Somalia.

However, a clearer strategy crafted by Somali leaders and regional players in the conflict is also emerging. The first step, the sources say, is to create three new "areas of influence" in the rest of Somalia, beside Somaliland and Puntland, which now function as independent territories.

These territories would provide a buffer zone for Kenya and Ethiopia. Already, Ethiopia has created a buffer zone spanning Galgadud, Hiraan, Bay, Bakool and Gedo.

Kenya's military ambition is to create a buffer zone spanning Gedo El Wak, Middle and Lower Juba regions.

Ultimately, these regions will be governed as semi-automous states at first that could one day form part of a strong united federal government of Somalia.

The second step after the fall of Kismayu would to be to hand over all "liberated" areas to Amisom. Read More

Shock and awe in Somalia? Sorry, it isn’t a board game

enyans are justifiably worried too — artists, journalists and writers associated with Concerned Kenyans Writers have already issued a statement essentially saying that this is not being done in our name.

Diplomatic missions have issued upgraded security advisories to their citizens resident in Kenya. And, publicly, are taking a naive sort of wait-and-see position, professing lack of prior knowledge as to what Kenya had clearly been planning for a while.

The recent kidnappings attributed to Al Shabaab, based on changing official statements, were clearly just an excuse to legitimise the offensive.

Al Shabaab has itself denied responsibility for the kidnappings — somewhat curiously, given its propensity for publicity. And it has, naturally, promised retaliation.

Kenya’s security apparatus seems determined to trudge on. Its attitude is that all “irrelevant” security issues — the minor matter of human-rights violations committed by Kenyan security services in an almost routine manner, for example — can be disregarded as so much buzzing around of flies to be swatted away. Read more

Kenyan Motives in Somalia Predate Recent Abductions

NAIROBI, Kenya — The Kenyan government revealed on Wednesday that its extensive military foray into Somalia this month to battle Islamist militants was not simply a response to a wave of recent kidnappings, as previously claimed, but was actually planned far in advance, part of a covert strategy to penetrate Somalia and keep the violence in one of Africa’s most anarchic countries from spilling into one of Africa’s most stable. Read more

Kenya: Kibaki Gambles On Regional War With Al Shabaab

As the Kenyan army ventured deeper into Somalia, in its first cross-border campaign in 44 years, a regional grand strategy to deal with Al Haraka al Shabaab al Mujahideen is beginning to emerge.

Kenya's intervention was under detailed consideration several weeks before Nairobi's official declaration of war against Al Shabaab on 15 October. There is little substance to media claims that United States diplomats based in Nairobi were surprised by Kenya's operation. Both the USA and Britain run substantive regional counter-terrorism operations from Nairobi.

Although the mobilisation was initially announced as a 'hot pursuit' operation against Somali-based groups who had kidnapped tourists in north-eastern Kenya, President Mwai Kibaki's government and Somalia's Transitional Federal Government (TFG) quickly characterised the military campaign as a coordinated effort, even if Kenya appeared to be acting unilaterally. Read more