Kenyan-Sudanese Relations: heading for a collision – By Peter Howes
Kenya has, over the past few years, enjoyed cordial relations with Sudan: taking in countless refugees both from what is now South Sudan and from Darfur, including tens of thousands of Sudanese migrants in the vast Kakuma Refugee camp in its north west.
Now, however, it finds itself in a quandary, struggling to balance the opportunity to profit from South Sudan’s independence (and oil, more specifically) whilst its own high court demands the arrest of Sudanese President President Omar al-Bashir, but finding itself unwilling to risk a complete diplomatic impasse in its relations with Khartoum.
Nairobi may find that it is forced to choose between prioritising its relationship with Khartoum, and prioritising its relationship with Salva Kiir Mayradit’s South Sudan. Satisfactory regional trilateralism may prove impossible, whilst Kenya’s rapid expansion of diplomatic and trade ties with the South post-independence, and its apparent pre-secession supply of arms to Juba, are a seeming indication of where its loyalty might lie. As oil-related tensions between Sudan and its southern neighbour heighten – with the latter ceasing all production and export, and the former briefly seizing South Sudanese tankers amid demands for transit fees of up to thirty times the international norm – decisions, if not interventions, by neighbouring states will have to be made. International fears of a descent into instability were not calmed by the deaths of 37 in a shoot-out between security forces in Rumbek North County on Friday (3rd February).
Kenya appears to want it both ways: recognising the potential of South Sudan as a key partner and agreeing to various infrastructural investments with the country, including the recent pipeline agreement between the south and the Kenyan port of Lamu, which hypothetically bypasses the need for a Sudanese role in the production of South Sudan’s oil reserves, whilst seemingly placating Khartoum by ignoring its own High Court’s ruling demanding the arrest of the ICC-charged Bashir. Regarding the Sudanese President, Nairobi finds itself in a unique geopolitical predicament – facing the choice of either alienating itself from Khartoum and rejecting the African Union’s call for member states to disregard the ICC decision, or ignoring its own judiciary. Thus far it has chosen the latter. The judiciary’s response has been to issue a fresh arrest warrant – this time with a direct threat to Internal Security Minister George Saitoti if the order is disregarded and the Sudanese president is not apprehended on his next entry into Kenya. Bashir last visited the country during the unveiling of its new constitution in 2010. Despite the brief expulsion of a Kenyan diplomat late last year, Khartoum has shown itself to be unwilling to provoke a diplomatic conflict with Nairobi. Another factor could be that Kenya is unwilling to appear to hold a disregard for the ICC given the on-going appeal against the charges levelled by that same body against Ruto, Kenyatta et al.
Another sign of Kenya’s seemingly preferential treatment of South Sudan over Sudan is its current major regional infrastructural investment – the Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor (LAPSSET). LAPSSET involves airports, railways, roads and importantly, an oil pipeline between Lamu (where a new refinery will be built) and South Sudan. Transport links will connect cities in Kenya, Ethiopia and South Sudan. The existing rift valley transport corridor connects Mombasa and Uganda, leaving Sudan a notable absentee from Kenya’s infrastructural investment aimed at promoting regional trade.
The pipeline in particular could lead to a changing dynamic in the East African extractives industry; emerging oil players Uganda (with its large confirmed reserves in the Lake Albert basin bordering DRC) and Kenya could feasibly export through the same pipeline, leaving Sudan, with all of its oil processing infrastructure, out in the cold.
It remains to be seen whether the pipeline sums add up: observers cannot fathom why the project is not being considered as a public-private partnership in the same manner of the proposed (but cancelled as a consequence of the Libyan conflict) Kenya-Uganda pipeline or the Chad-Cameroon Development Project. Given South Sudan’s GNI per capita of around $984, the suspected pipeline cost of USD$ 1.5bn (plus hefty insurance charges) would be an exceptionally large investment, even without considering other factors such as the pipeline’s partial location in bandit-ridden Western Kenya. Crucially, China – reliant on South Sudan for more than 5% of its vast oil needs – advocates negotiation between Sudan and the South, indicating that it views the current status quo of South Sudanese extraction and Sudanese processing and export as the best mid-term solution.
As a brief aside, South Sudan’s GDP per capita is estimated at around USD$ 1546 (remarkably, roughly twice that of Kenya) – the discrepancy between this and GNI being due to Sudan’s take of oil revenue – so the macroeconomic argument for arriving at a new means for exploiting Sudan’s oil reserves is clear. Khartoum’s demands are seen in Juba as being sufficiently unreasonable that South Sudan responded to the claim for $32 per barrel export fee by proposing a $1 a barrel levy. With talk of an offshoot pipeline illicitly supplying the north, however, Juba sees a new arrangement for maximising its oil profits as a priority, and that a temporary halt in production is a worthwhile risk for long-term revenue gain. The absence of any revenue sharing agreement after South Sudan’s independence was always likely to be a cause of regional instability, but the temporal pressure caused by an almost total freeze on South Sudanese government revenue due to its total cessation of oil production heightens the risk.
To return to the diplomatic angle, both Kenya and South Sudan appear to be playing a dangerous game with Khartoum, but to impartial observers the apparent bipartite nature of the Kenyan government’s relationship with Sudan is an enduring frustration. At least, they say, the judiciary’s view is clear, as opposed to the government’s mix of reticence and appeasement. The backdrop to the current dispute is Sudanese criticism of former South African President Thabo Mbeki’s role as Chairman of the African Union (AU) High-Level Panel on Sudan.
Regional stability thus depends greatly on the governmental response to Kenya’s High Court – particularly regarding any activity on al-Bashir’s next visit to Nairobi, and Khartoum’s reaction to South Sudan’s apparent subversion (with the aid of Kenya) of the original secession agreement. Despite having a more diversified economy than the South (where oil is worth 98% of government revenue and 71% of GDP), Khartoum will understandably be extremely reluctant to lose its stake in South Sudanese oil, revenues from which were split 50-50 pre-independence. As for South Sudan, its viability as an independent state depends not only on getting oil flowing again with reasonable transit fees but also on economic diversification beyond the exploitation of its natural resources. With the US accusing Sudan of bombing its own South Kordofan region, Kenya might not be alone in choosing Juba over Khartoum. The geopolitical cliché of pipelines as regional arteries is uniquely applicable in the world’s newest state.
For a further discussion of Sudanese oil, see Luke Patey’s blog at:
Peter Howes is an analyst at Risk Resolution Group