With a strong focus on improving the country’s infrastructure, amongst other initiatives, the government has taken a number of steps to make Kenya’s infrastructure more attractive to foreign and private investors. All signs indicate that their hard work is starting to pay off.
From the fertile lands of the Rift Valley to the bustling port of Mombasa, Kenya is clearly enjoying a period of growth and prosperity. The country is already the largest economy in East and Central Africa and serves as a regional center for banking, technology and transportation. Between 2004 and 2014, Gross Domestic Product (GDP) per capita almost tripled. And between 2012 and 2014, foreign direct investment inflows jumped from USD 259 million to almost USD 1 billion.
While Kenya has long been viewed as one of Africa’s most politically and economically stable markets, violence erupted in 2007 on the heels of disputed election results. Peace and security were quickly restored, but the period raised a number of significant political, social and economic questions for the country.
“We recognized that we really needed a long-term view of how we wanted to develop as a country and how we planned to improve the quality of life for all Kenyans, and in particular the poor, and that led us to develop Kenya’s Vision 2030,” noted Professor Gituro Wainaina who serves as the Acting Director General of Kenya’s Vision 2030 Delivery Secretariat.
Vision 2030 is intended to transform Kenya into a “newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment”. The plan is based on three pillars (economic, social and political) and embeds a set of values that defines what the country hopes to achieve and how it hopes to achieve it. The economic pillar aims to achieve and sustain an average economic growth rate of 10 percent per annum until 2030, the social pillar seeks to build a just and cohesive society with social equity and the political pillar aims to realize a democratic political system founded on issue-based politics that respects the rule of law, and protects the rights and freedoms of every individual in Kenyan society. The three pillars are anchored on enablers and macro or the foundations.
The implementation of the Vision 2030 is a progressive process with goals and milestones that will be achieved over time. It is implemented in successive 5-year cycles called Medium Term Plans (MTPs). The first MTP was implemented between 2008 and 2012 and the second MTP is being implemented in the period 2013 to 2017.
Rather than an opportunistic political manifesto, the Vision 2030 plan is entrenched into the country’s constitution 2010, a move that Professor Wainaina says provides popular support and longevity. “The Constitution 2010 provided transparency into how government deals with businesses and citizens, it created important structures and institutions, it articulated the relationship between the two levels of government at the national and county levels and – most importantly – it gave Kenyans a direct voice in the development of the constitution,” noted Professor Wainaina. “We are extremely proud of our constitution and credit it with much of our success since 2010.”
Astute timing and prudent cooperation in developing the Vision’s MTPs has also been key to providing stability and confidence in the initiative’s long-term goals. The MTPs are designed for 5 years and to coincide with Kenya’s general election cycle.
“We appreciate that politics is very important to the development work that we do and we try as much as possible to implement the Vision in harmony with the election cycle,” explained Professor Wainaina. “All of Kenya’s main parties base their platforms on the Vision 2030 plan and so we work with them during their campaigns to help them understand the implications of their ideas on the Vision and the long-term development goals we have set.”
Sometimes that means cooperating with the new government to integrate platform promises into the Vision 2030 agenda. “The current MTP was adopted in 2013 and includes a strong focus on digital transformation to respond to the government’s platform of providing every child with a laptop by January 2017 under digital literacy project,” he noted.
From the outset, Kenya’s government recognized that the Vision could only be enabled through investment into infrastructure. “If we want to improve access to healthcare, we need to build roads that can take people to hospitals; if we want to improve tourism, we need to improve our ports and airports; if we want to create new business opportunities, we need to invest more in our Information and Communication Technology (ICT) infrastructure,” added Professor Wainaina. “Infrastructure is the foundation (holds up each) of the three pillars in our Vision.”
Kenya has already enjoyed some success in key areas. A new 50-kilometer eight-lane controlled-access highway was built between Nairobi and Thika, linking several towns to the capital’s North East. Investments into renewable power and the ‘last mile initiative’ have seen electricity rates fall from 19 cents per kilowatt hour to around 11 cents today. And dredging at the Port of Mombasa has reduced ship turn-around times from 18 days to just 2 days.
Like all governments around the world, there are limits on how much of Kenya’s infrastructure can be funded from the public purse. “The only way we will be able to deliver on Vision 2030 is through public-private partnerships (PPPs) and so we have been very focused on creating the right environment to attract private and foreign investors,” noted Professor Wainaina. “We have had successful PPPs in the past, but the PPP Act of 2013 really helped articulate how the private sector can support the government in this initiative.”
The government has untaken a number of initiatives to improve the investment climate. For example, recognizing that procurement processes had become contentious and time-consuming, the government has focused on improving the use of technology to drive efficiency across the procurement lifecycle.
Specialized courts have also been established to deal with procurement challenges and contractual issues. And soon a law will be enacted that requires those bringing failed challenges to court to pay the legal fees. “Currently, companies can dispute awards in the courts for years – often with little or no basis of claim – which not only slows the process but also adds to investor uncertainty,” added Professor Wainaina.
Professor Wainaina notes that Kenya is already enjoying benefits from the Vision. “We’ve attracted dozens of global businesses – like Google, IBM and Virgin Atlantic – who have made Kenya their headquarters for Africa and serious investors are recognizing that Kenya offers the best opportunity to build a presence in Africa because of our people, our skills, the ease of doing business and our investment into infrastructure,” he added.
But he warns that Kenya does have one pitfall for foreign investors and business people: “Once you come to Kenya you won’t want to leave,” he notes. And he’s absolutely right: I came to Kenya from Australia in 2009 and have no intention of ever leaving.