Potential Economic Effect of Oil and Gas in East African Countries

Abstract

Discoveries of oil and gas in East African Countries (EAC) has attracted the attention of many MNCs and EMNCs. EAC governments of northern corridor countries have come together, not only to strengthen the Northern Corridor Transport System (NCTS), but also to establish a new transport corridor project called Lamu Port, Southern Sudan, and Ethiopia Transport (LAPSSET). The project will transport crude oil to be refined at Lamu and to bring back refined oil and gas products to the hinterland countries. It consists of Roads, Railways, and Pipelines running through the Northern Corridor countries. This study was conducted to find out business opportunities created by the discovery of oil and gas in EAC countries, and to determine what other socioeconomic benefits will accrue to the citizens of Southern Sudan, Rwanda, Uganda, Ethiopia, and Kenya. This was an exploratory study conducted in the relevant ministries of the five governments. The interviews conducted provided qualitative information that was analyzed through content analysis.  The results of the study indicated that the joint venture of the five governments was a new unchartered territory for cooperation and that if the member states could match their political support and enthusiasm with financial backup, then the discovery of oil and gas in EAC countries will be a boon in the near and distant future.

Key words: oil exploration, first mover advantage, exploration blocks, Great Rift Valley system