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East Africa


Wolfgang’s East Africa report

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Wolfgang H. Thome  Jan 04, 2008

ENTEBBE ROAD HOTEL UNDER CHOGM AUDIT SCRUTINY
The privately-owned hotel venture at Bwebajje along Entebbe road, due to become the Protea Entebbe Hotel when eventually completed and open, has again come under the spotlight, when accountability for allegedly advanced funds from the CHOGM budget was demanded by the Public Accounts Committee in Parliament. The hotel gained notoriety when during the early stages of construction a building collapsed killing many workers in the process. The owners, however, seem to have escaped the law as no prosecution was ever brought against them. The hotel was predictably not ready for the Commonwealth Summit in November, in spite of full mouthed statements to the contrary by the owners, but tried nevertheless to have guests check into the building site’s ready rooms. The proprietors have in the meantime continued their cloud nine ambitions when announcing recently that the size of the project would grow to 1,000 rooms and over 1,000 shops, something industry analysts dismissed out of hand as “ludicrous,” considering the record of the owners, being total novices to the hotel industry, but also due to the distance from both Entebbe and Kampala and the ensuing commuting problems during rush hours. Parliamentarians have now claimed that the hotel had received advance payment for CHOGM delegates but did not host any at all. Watch this space.

CRUISE LINER DOCKS IN MOMBASA
In spite of the political tension which is gripping Kenya at present, following the opposition’s refusal to accept the election results, the Italian cruise liner ‘Costa Marina’ went on to make the scheduled port call in Mombassa with some 800 tourists on board. The visiting tourists went on shore excursions and safaris and while there was tighter security than usual surrounding the ship and the visitors, the port call apparently went smoothly. Mombassa is expecting another 6 cruise ships to visit the port over the next couple of weeks and there is no indication of any of them considering delaying or canceling their visits, subject of course to the present political passions cooling off again very soon and the opposition accepting the declared results or else taking their grievances to the competent courts.

FUEL SHORTAGE HITS HOME
Following the developments in Kenya, where supporters of the defeated presidential candidate took to the streets in running battles with security forces, the flow of fuel to Uganda was immediately affected. Already on New Year’s Eve long queues formed at the few stations with sufficient supplies, but rationing was invoked with a maximum of 20 liters per car while prices rose to an unprecedented Ushs 3,000 per liter (US$1.78) at the increasingly few still open or willing to sell stations. First reports coming from Juba/Southern Sudan also indicate that the price for fuel jumped above the US$5 mark per liter and was still rising. Other goods are also stuck in transit, while exports like coffee and tea for Mombassa from Uganda and other hinterland countries are now halted at the Kenyan border points.

At the same time, travelers using the services of the bus companies on the routes from Kenya and Tanzania to Uganda and beyond were also stranded as no public service vehicles were moving in the face of declared or undeclared curfews. Petrol stations and cash points are also said to be running dry across Kenya, compounding an already difficult situation. Many locals across Eastern Africa use busses to reach their destinations in the region as it is an affordable means of travel, compared to the cost of air tickets, once the extremely high regulatory taxes are added. Subsequently a sizeable number of people who had gone to the Kenya coast by bus or their own cars for the Christmas/New Year holiday are now unable to return. In turn Kenyan visitors now equally “stuck” in Uganda, as reports have emerged that opposition supporters committed a major crime by burning 25 children and many more adults in a church, where they had sought refuge. This happened near the Western Kenyan town of Eldoret, where most of the transit traffic between Uganda and Kenya passes and where also the fuel pipeline head is located, from where Ugandan an other hinterland countries pick their supplies. This will put more strain yet on the already inflamed ethnic relations, which the opposition has exploited for their own political ends.

First reports on charter operations to Mombassa also indicate a reduction in arrivals with outbound flights fully booked and tourists scrambling for seats to return home. Some of the hoteliers at the Kenyan coast known to this correspondent have privately expressed their concern over the developments, saying it could spoil the four-year upswing of the tourism industry, which yielded record figures for 2007 but now has a rather bleakish outlook for 2008. South coast hoteliers have also lamented the fact that tourist traffic needed to go through the Likoni part of Mombassa where vandalism and political fighting was ripe. Likoni was at the centre of previous ethnic clashes which subsequently led to Kenya’s tourism collapse in the late ‘90s.

In a related development Kenya Airways has reportedly suspended flights to and from Kisumu, an opposition stronghold, due to lack of fuel at the airport and domestic flights in and out of Mombassa also appear delayed, keeping scores of passengers at the airport waiting for their aircraft to arrive to connect to their international flights home and away from trouble.

UGANDA READIES FOR FUEL SHORTAGE
Alarmed by the economic fall out for Uganda, the Ugandan government has moved swiftly and arranged with their Kenyan counterparts to send 155 fuel tankers under police and security escorts to the border. Once in Uganda the fuel will be distributed across the country to ease the pressing shortage of petrol, aviation fuel, kerosene and diesel. Additional tankers will follow within a day, again under tight security, to add further fuel into the economy, restock emergency stores and allow for onward exports to Rwanda, Burundi, Eastern Congo and Southern Sudan, where the shortage has also started to bite.

Transport of exports destined for Mombassa’s port are, however, still held back at the Ugandan border points with Kenya, while other goods for Uganda are still halted in Kenya, following the wanton destruction of several Uganda bound trucks by opposition goons deployed along the transit routes to the border with the aim to create chaos and despondency amongst their fellow Kenyans while bringing trade, commerce and day to day life to a halt.

Should the situation persist, widespread fuel shortages are expected to hit Uganda, Rwanda, Burundi, Eastern Congo and Southern Sudan, all of which depend on the road and rail supply line from the Mombasa port. Fuel prices in Juba, Southern Sudan’s capital, are also continuing to rise and early indications are that charges have now reached between US$8 and US$10 per litre, if and where fuel is still available.

Aviation is likely to suffer because of these developments, as all aviation fuels like JetA1 and AVGAS also need to come from or via Kenya for the airports and airfields in Uganda, Rwanda and beyond. In the absence of new deliveries airlines may soon be given a mandatory notice to bring more fuel and choose intermediate waypoints for refuelling when flying back to Europe or the Middle East.

UGANDA TOURISM READY TO ABSORB DIVERTED TRAFFIC
Enquiries have been received by Ugandan safari and tour operators to handle some of the traffic destined for Kenya, should the current situation there prevail. While capacities on the safari sector with lodges and safari camps are not numerically matching those of Kenya, Uganda could however provide some relief for the top end of the market, should there be a switch of itineraries. That said, business projections for the Ugandan safari circuit during the present high season are already excellent as it is, with gorilla tracking permits literally sold out until the end of March, as are permits for chimpanzee tracking, although some of the top end lodges may be able to accommodate extra traffic.

Should the Kenyan situation however prevail for too long, damage to the tourism industry across the region can be expected, as much of the air traffic to Eastern Africa still connects via Nairobi and trouble in the leading tourism country of East Africa will undoubtedly have an effect for the other countries too. This comes with particular reference to the opposition’s declared intention to defy a ban on their planned Thursday meeting in the heart of Nairobi, which could spell more trouble yet to come.

Meanwhile, tourism operators in Kenya are putting a brave face to the situation and are downplaying the potential impact and damage to their sector. The industry has been struggling to rebuild market confidence since the notorious Likoni riots 10 years ago and the fall out of terrorist attacks in Nairobi and Mombassa. For the past four years numbers have been rising impressively, following a major EU funded marketing initiative, and for 2007 some 2 million overall arrivals (tourists and non tourists) are expected for Kenya with the resulting revenue nearing US$1 billion. This makes tourism one of the most important economic sectors for the country and arguably the biggest foreign exchange earner.

It has also been reported that in Mombassa, tourists traveling to and from the airport are now provided with police escorts to ensure their safety, which is a reassuring measure for most but of course also visibly underscores the present problems in the country. Kenya Airways reportedly resumed flights to Kisumu but information received from there indicates that all airlines have scaled back flight operations to single flights per day in the face of very low passenger loads. International flight arrivals, according to an airline source at Jomo Kenyatta International Airport, are also showing sharply lower inbound passenger loads, while literally every flight exits Nairobi with full capacity, leaving passengers with no confirmations or on standby behind.

Wolfgang’s East Africa report



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