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Uganda, Rwanda, sued over border closure2 minutes read

The border closure followed months of rising acrimony between Rwanda’s Paul Kagame and Uganda’s Yoweri Museveni

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Rwanda, Uganda sued in regional court for feud related trade losses
Rwanda's Paul Kagame and Uganda's Yoweri Museveni. Both leaders are being sued for financial losses caused by the closure of the Rwanda-Uganda border. Photo credit: AFP.

Three civil society groups in Uganda have filed a lawsuit against the governments of Rwanda and Uganda in the East African Court of Justice over the continued border closure between the two countries. The closure – now in its fourth month, has resulted in financial losses not only for the two governments, but also for local businesses.
 
In February, the government of Rwanda closed the border posts of Gatuna-Katuna in Kabale district and Cyanika in Kisoro district.  The border posts remain closed.

Three regional civil society organizations – including the Southern and Eastern Africa Trade information and negotiations Institute – say they filed a suit on June 21. The lawsuit asks the court to issue a permanent injunction against the governments of Rwanda and Uganda to keep them from closing the border posts between the countries and ensure the free movement of people and trade.

Assan Nsimiraho has been doing cross-border business for ten years, dealing in beans, peas and cassava flour exported to Rwanda. He says alternative routes offered by Rwanda were also affected by the border closure, such as areas in the Kabale district affiliated to Gatuna-Katuna border post.

Nsimiraho says they have been denied permission to collect their goods.

In June, Rwanda re-opened the border and allowed trucks passage for 12 days.

According to the Ugandan Ministry of Trade and Industry, since the closure in February, Uganda’s exports to Rwanda have been down from $660 million to about $203 million. Rwanda also reports a loss of about $104 million.

Amelia Kyambadde, Uganda’s minister for trade and industry says the government has not responded to the lawsuit as officials discuss what she describes as a complicated matter.

“I would advise Ugandans to look for other routes, Kyambadde adds.

Gatuna-Katuna border post has historically been the major crossing point for cargo trucks and cross- border trade, both formal and informal, heading to Rwanda, Burundi, and the Democratic Republic of Congo. Currently, trucks allowed into Rwanda are only those for transit goods to Burundi and the DRC.

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Kenya seeks $1 billion World Bank loan

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In a bid to cut debt from overseas capital markets after a borrowing binge in recent years,Kenya is in advanced talks with the World Bank for “a fairly priced” loan of up to 100 billion shillings ($991.57 million), nearly half of its required external funding this fiscal year.

The World Bank, which has multiple development funding programmes with Kenya worth billions of dollars, is seen as one of the viable alternatives to commercial debt.

The Washington D.C.-based financier lent money to the Kenyan ministry of finance for the first time last year, changing past practice where it channelled cash straight to the projects, bypassing the Treasury.

The loan size will be determined by how much its funders can put together, says Julius Muia, principal secretary in the Kenyan Finance ministry.

“We are thinking something between 50-100 billion (shillings) depending on what kind of interest there will be”. The loan will be cheaper than commercial debt, in line with the government’s policy of cutting its funding costs, Muia adds.

Kenya became a middle-income country in 2014 after it rebased the economy, meaning it cannot secure funds from the World Bank at the concessional rates offered to low-income states.

The finance ministry has set a budget deficit of 6.3% of GDP for this financial year to the end of June with about 213 billion shillings expected from external sources.

The balance will be raised through Kenya’s first sovereign green bond, with the country taking advantage of next week’s UK-Africa investment summit in London to gauge investor demand for the potential issue.

“It is taking shape as we go,” Muia says.

The Treasury projects that the budget deficit will shrink to 5.7% of GDP in 2020/21. The gap, which peaked at 9.1% of GDP in 2016/17 financial year, is expected to narrow further to the desired level of 3.3% in 2023/24

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Egypt, Ethiopia, Sudan to finalize Blue Nile dam agreement

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Ministers from Egypt, Ethiopia and Sudan agreed on Wednesday, to reconvene in Washington later this month to finalise an agreement on the giant hydropower dam on the Blue Nile that sparked a diplomatic crisis between Cairo and Addis Ababa.

The ministers met in Washington this week and agreed to fill the $4 billion Grand Ethiopian Renaissance Dam in stages during the wet season, taking into account, the impact on downstream reservoirs.

Initial filling of the dam, due to begin in July, will aim for a level of 595 metres above sea level and early electricity generation, while providing appropriate mitigation measures for Egypt and Sudan during severe droughts.

Cairo fears the dam, announced in 2011 and under construction on the Blue Nile near Ethiopia’s border with Sudan, will restrict supplies of already scarce Nile waters on which its population of more than 100 million people is almost entirely dependent.

Addis Ababa denies the dam will undermine Egypt’s access to water and says the project is crucial to its economic development, as it aims to become Africa’s biggest power exporter with a projected capacity of more than 6,000 megawatts.

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Ethiopian airlines to spend $5 billion on Next-generation airport

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Ethiopian Airlines will begin construction of a new $5 billion airport later this year, according to its chief executive officer, Tewolde Gebremariam, as the rapidly-expanding carrier outgrows capacity at its current base in Addis Ababa.

Gebremariam says the construction will begin in the next six months. 

The airport, which will cover an area of 35 square km, will be built in Bishoftu, a town 39 km south east of the capital, and have the capacity to handle 100 million passengers a year.

“Because Bole Airport is not going to accommodate us; we have beautiful expansion project, the airport looks very beautiful and very large but with the growth that we are going every year in about 3 or 4 years we are going to be full,” Gebremariam says.

Bole International Airport in Addis Ababa has a passenger capacity of about 19 million passengers annually.

Gebremariam notes that the new airport’s price tag is higher than the $4 billion cost of building the yet-to-be-completed Grand Ethiopian Renaissance Dam on the Nile.

In 2018, Addis Ababa overtook Dubai as the top transit hub for long-haul passengers into Africa. In 2019 China funded the expansion of Bole Airport was, allowing it to accommodate 22 million passengers annually. Gebremariam has not said how the new airport, which will accommodate 100 million passengers ,will be funded.

The continent has been notoriously under-connected by air, and Ethiopian airlines is changing that, with flights to more than 60 African cities. The company also owns stakes in several local airlines based in other countries.

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