* Regional economies hit by Kenya's 2007 poll violence
* Kenyans votes March 4 in first vote since the fighting
* Companies, aid agencies talk of contingency measures
* Plans on to cut over-dependence on Mombasa port
By Kevin Mwanza
ATHI RIVER, Kenya, Feb 21 Kenya's landlocked
neighbours are stocking up on fuel and food to prevent the kind
of disruption they suffered after being cut off from the port of
Mombasa by angry rioters following a disputed election five
About 200 million people in Uganda, Rwanda, Burundi, South
Sudan and eastern Congo could be affected if Kenya goes through
a fresh bout of fighting when it holds presidential and
parliamentary elections on March 4.
The port of Mombasa serves its wide hinterland with imports
that include oil, clinker which is used to make cement, steel,
bitumen for road construction and second-hand cars, while the
main exports include tea, coffee, and horticultural products.
Some 95 percent of all the cargo coming in through the port
is trucked by road. Truck drivers at a weigh bridge in the small
town of Athi River on the fringes of the capital Nairobi said
there were already fears of violence.
"Everybody is scared about the elections, especially the
foreign truck drivers. Last time some of us were attacked and
goods were lost," said Charles Mburu, 36, who has driven trucks
for the last eight years.
"Our employers are not just insuring the goods and trucks,
but also the drivers. You have to be certain that they will
compensate you in case of an attack."
Supporters of Prime Minister Raila Odinga, the opposition
leader at the last vote, claimed he lost his bid for the Kenyan
presidency after President Mwai Kibaki rigged the vote, setting
off a bloodbath in which more than 1,200 people were killed and
After the December 2007 election, machete-wielding youths
blocked roads and looted trucks they had hijacked. They burnt
tyres to cut the road from the port and uprooted railway lines,
strangling trade to Uganda, Rwanda and Burundi for weeks.
Odinga is back in the race for the presidency, and has a
narrow lead over Deputy Prime Minister Uhuru Kenyatta, according
to opinion polls, raising the spectre of a close vote and a
possible dispute over the result.
Kenya, Uganda and Tanzania all suffered inflationary
pressures in 2008 due to the impact of the post-election crisis
that damaged regional growth.
This pushed Uganda's headline inflation rate to over 10
percent in January 2008, while the country's revenue body
reported daily revenue losses of up to $600,000.
Burundi's top hard currency earners coffee and tea were also
hit hard - the tiny landlocked country transports over 80
percent of its produce through Kenya.
"Our tea stocks in Bujumbura expired for consumption because
we could not export or send it to Mombasa," said Jacques
Bigirimana, commercial director at state-run tea board.
Banks and importers have been taking defensive positions by
buying dollars in Kenya and Uganda, traders said.
The Uganda shilling hit a 14-month low against the
dollar on Jan. 4 due to aid cuts by at least five western
countries, including Uganda's biggest bilateral donor Britain,
after officials in the prime minister's office were accused of
embezzlement, and jitters over election violence in Kenya.
The Kenyan shilling has also taken a knock from the
cautious importers stockpiling dollars, and is down 1.7 percent
so far this year, despite the central bank selling dollars to
shore up the local currency.
"If chaos breaks out in Kenya again, both the currencies
will come under serious pressure due to investor flight," said
Ignatius Chicha, head of markets at Citibank in Nairobi.
To mitigate against disruption of the supply of goods, the
company operating Kenya's railway system has bolted down the
railway track to prevent any chance that it may be damaged.
Opposition supporters in Nairobi's Kibera slums, one of
Africa's largest urban settlements, manually uprooted miles of
railway tracks in protest at what they said was a stolen vote,
preventing the cargo from reaching Uganda.
"There is a learning curve from what happen in 2008," said
Karim Sadek, the managing director of Egypt's Citadel Capital,
owner of a Kenyan company that manages its railway line.
"God forbid, if anything happens, we will of course have
contingencies. I won't be sitting here, saying it won't affect
the business, it will affect the business, seriously," he said.
"In the flash areas where violence happened last time, we've
welded the rail. So 10 km of rail is a heavy proposition to
lift," he said.
Companies with a regional presence also said they would take
steps to prevent being caught unawares again.
The Ugandan unit of Shell is building large
reservoirs of fuel as a back up at Jinja, east on the capital
Kampala on the shore of Lake Victoria.
"... We're building up some reserves on our own and some
other oil companies are doing the same, and that collective
effort gives a good back up," Ivan Kyayonka, Shell Uganda's
country manager said.
Abid Alam, managing director of one of Uganda's biggest
constructions firms, the Alam Group, said his firm had bought
huge stocks of raw materials to prepare for any disruptions.
Alam said last time around his company suffered badly, with
fuel and other supplies disrupted.
"This time there's a lot of uncertainty surrounding the
forthcoming elections and it is scary to use the
Mombasa-Uganda-Rwanda transport corridor," Alam said. "Mombasa
must not be looked at as a Kenyan port but a regional port that
must be secured from any internal political strife."
Kenya's Bidco Oil Refineries, one of the largest consumer
goods maker with exports across the region, said it has already
moved stocks to neighbouring countries to avoid disruption.
"We've taken measures to ensure that all our clients are
well stocked both in Kenya and outside," said Vimal Shah, its
chief executive officer.
'NOT A SINGLE DROP'
Worsening security in Kenya would also mean aid groups could
be unable to reach millions of people displaced in fighting in
eastern Congo who may be going hungry, a spokeswoman for the
World Food Programme (WFP) said.
The United Nations agency, which distributes more than
400,000 tonnes of food to nearly seven million people in east,
central and southern Africa annually, has also made plans for
supplies to be moved through Kenya to Uganda.
The agency also plans to have its ships dock in the port of
Dar es Salaam in Kenya's neighbour Tanzania, and Djibouti.
"We have moved most of the food stocks we will need
downstream to Eldoret and Tororo," Challiss McDonough, WFP's
spokeswoman in the region, said, referring to the north-western
town of Eldoret near the border with Uganda, and Tororo, just
inside the landlocked country. The stocks could last for two
months, she added.
The Mombasa port handled 22 million tonnes of cargo last
year, up from 20 million tonnes in 2011, with about two-thirds
of the total traffic of cargo destined to its neighbours,
meaning they almost totally depend on its smooth operation.
(Additional reporting by Drazen Jorgic in Nairobi, Joseph
Akwiri in Mombasa, Elias Biryabarema in Kampala, Jenny Clover in
Kigali and Patrick Nduwimana in Bujumbura; Writing by James
Macharia; Editing by Giles Elgood)