Neighbors May Be Reaping From Somalia Unrest

By George Omondi  (email the author)

Nairobi, July 18, 2009 – A tepid response by neighboring states to the spiraling conflict in Somalia has sparked fresh speculations that those fanning the war enjoy secret support from governments in the region.

Both the African Union (AU) and the Inter-Governmental Authority on Development in Eastern Africa (Igad) have rebuffed calls for military intervention in Somalia to save the UN-backed Transitional Federal Government (TFG) even as militants step up their campaigns to topple it.

Analysts say instability in the horn of Africa nation has created a route for a lucrative illegal trade whose proceeds have then been used to finance the war that has besieged Somalia since its central government collapsed in the early 1990s.

“If you weigh trade statistics against Somalia’s population and the country’s low economic activity, it is highly unlikely that all the goods transported to the country are consumed there.

Profiteers must just be using its lawlessness as a conduit to re-export goods to other destinations in the Middle East,” argues Mr David Owiro, a trade economist at the Institute of Economic Affairs (IEA).

Kenya, the present chair of Igad, has seen her exports to the troubled nation blossom over the last five years, making the troubled country a major non-Comesa member export destination for her goods in Africa.

Government statistics indicate that exports to Somalia grew by 54 per cent last year to Sh12.8 billion last year from Sh8.3 billion in 2007.

This volume was much higher than exports to some major regional markets like Rwanda where Kenyan exports amounted to Sh8.9 billion and Egypt which imported Sh10.8 billion worth of Kenyan goods.

The government attributes this phenomenal increase in trade between the two countries to growth in volumes of khat (miraa), listed in the Economic Survey 2009 under ‘foliage, branches and other parts of plants suitable for bouquet purposes,’ that together fetched the country Sh3.4 billion.

Kenya imported from Somalia goods worth Sh30 million last year compared to Sh12 million level of 2007.

No clout

Experts argue that the nature and volume of items traded between the two countries suggests a clandestine cartel-controlled business that may not be able to muster the requisite clout to force the government to intervene in Somalia militarily.

“Money whose circulation is controlled by just a small clique of people has very little impact on the economy and this may be the reason Somalia is not taken seriously as an exports destination,” says Mr Owiro.

The region lobbied the African development bank (AfDB) to finance the construction of major infrastructure connecting its markets and succeeded in convincing AfDB to avail Sh25.4 billion for financing the second phase of the Mombasa-Nairobi-Addis Ababa road corridor project, but no mention was made of the superhighway connecting the port of Mombasa to Mogadishu.

The 13th summit of the AU held in Libya ended with African leaders expressing ‘full support’ for TFG but not authorizing its forces stationed in Somalia to intervene militarily.

Source: Business Daily, July 14, 2009

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