Mr President, we need a Marshall plan for Kenya

By Wohoro Ndohho

As an ardent student of history, one thing that has puzzled me is America’s Marshall plan for rebuilding Europe in 1947 after World War II.

Named after its architect — Mr George C. Marshall - trusted Secretary of State of President Harry Truman, and the European Recovery Program (ERP) as it was then officially known, it “…sought to rebuild the economies and spirits of western Europe” as Marshall was convinced that the “…key to restoration of political stability lay in the revitalisation of national economies and …in blunting the advances of communism in that region.”

 Why on earth would a triumphant America spend $13 billion of its own money (in 1947!) on a Europe devastated by self-inflicted wounds from a war that led to abject poverty, disease, famine and almost certain terminal decline? Suffice it to say that 68 years later, the America-Europe trade block is, at over $760 billion per year, the largest in history.

For a combined population of 823 million or 15.6 per cent of the world’s population (2012), its GDP of $32.3 trillion is 45 per cent of the entire world’s ($71.7 trillion). I admire this characteristic about the West, the ability to plan, execute and stick with a long term inter-generational strategic plan.

 For perspective, our combined GDP in sub-Saharan Africa is $1.29 trillion or 1/25th that of the combined America/European union, and that for a population of 910 million! More sobering, our combined GDP is equal to Mexico’s $1.28 trillion (pop.121m), slightly larger than South Korea’s ($1.13trn), less than Spain’s ($1.35trn) and Australia’s ($1.52 trillion) whose population at 22m is about half that of Kenya!

 My takeaway: Actions do have consequences and just as George C Marshall’s actions born of his conviction that the “…key to restoration of political stability lay in the revitalisation of national economies…,” remade Europe, it also conferred on future generations of Europeans multiple benefits for its foresight. It illustrates how current generations are either blessed or cursed by the foresight, fortitude or folly of their ancestors.

Last time we saw the foresight of Mr Lee Kuan Yew - Singapore’s legendary first Prime Minister - in the economic miracle the country has become. In a cause and effect paradigm, decisions enacted by past leadership are the ‘cause’ of current circumstances. Again we can learn from George C Marshall and ‘The European Recovery Programme’, wherein sixteen nations, including Germany, became part of the programme and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic Cooperation Administration (ECA) of the United States.

 European nations received nearly $13 billion in aid (in 1947!), which initially resulted in shipments of food, staples, fuel and machinery from the United States and later resulted in investment in industrial capacity in Europe.  Marshall Plan funding ended in 1951, a mere four years later!

Mr President, please give us a Marshall plan. Already, our devolution is arguably the most ambitious and audacious generational project in Africa and maybe the World. So why not go all the way and mobilise our nation for a Marshall-plan-like strategy. I’ll even suggest an official name for it: The Kenya Reconstruction & Recovery Programme (KRRP) and, truth be told I see hints of it in the spirit of the Jubilee manifesto for the transformation of Kenya.

I suggest a good read of Mr Marshall’s plan will provide excellent options for Kenya’s transformation. Well executed, it will be tectonic in impact, historic in significance and epic in legacy. A couple of ideas on how to go about this. Firstly, create a Kenya Sovereign Wealth Fund (KSWF) into which will be paid all revenues derived from the commercial exploitation of our newly discovered natural resources for a minimum period of 10 years. Secondly, leverage the concessioning of these resources to maximise value-add and thus revenue. Thirdly, seek a three way primary strategic partnership with two major economies for technology transfer in identified strategic industries. I suggest one of them be a BRICS member – America and China come to mind.

Fourthly, seed the KSWF with the license fee revenue from mining. Use these funds to commission a really smart group of Harvard-level Kenyan brains to develop a strategy and blueprint for the KRRP. For an example, I suggest a look at the operation of Singapore’s Central Provident Fund – its compulsory pension fund.

Devolution is pregnant with opportunities. As offspring of Kenya’s independence generation, we have taken over the power, opportunity and privilege to bequeath to our children an excellent legacy. It is time to bring innovation to every aspect of our body politic, borrowing from anyone whose experience enriches us, example inspires us and wisdom instructs us to the glory of Kenya.

The writer is a public finance expert with the Govcon Consulting Group.