Amid massive spending and borrowing, the government has repeatedly called for austerity measures and tightening of the belt
A myriad of poorly conceived, forced and hastily implemented projects that run into trillions of shillings are increasing the pressure on President Uhuru Kenyatta as his administration approaches homestretch.
On Wednesday, a clearly vexed President Kenyatta launched construction of a Sh60 billion Nairobi Expressway in Nairobi, launched a passenger train “to nowhere” and addressed meetings in Ongata Rongai, Ngong and Maai Mahiu.
Yesterday, he was at it again in Mombasa, groundbreaking for the development of the Dongo Kundu Special Economic Zone.
And when he launches Kenya’s second port in Lamu on Monday, he would be completing a circle in a long line of multi-billion shilling projects whose viability has dogged both public understanding and expert appreciation.
“Its open for everyone that there is no critical thinking,” David Owiro, the executive director of Nairobi-based Africa Development think tank, says.
Amid massive spending and borrowing, the government has repeatedly called for austerity measures and tightening of the belt as the county’s economy hits the nadir, with job losses, food shortage and lack of funds to devolved units.
Samuel Nyandemo, an economics lecturer at the University of Nairobi, believes that the projects being implemented by the Kenyatta administration are not a priority.
To Dr Nyandemo, some projects, “have zero return.” He pointed out the SGR as an example of one of those he feels were a not priority.
It is perhaps the feeling that people were not seeing from his point of view that a visibly angry President was at pains to underpin importance of the mega government projects like SGR.
“Some people cannot see that this will benefit their children in future,” Uhuru told residents after inaugurating the passenger train at Mai Mahiu SGR terminus.
From construction of the Sh550 billion SGR, leasing of expensive medical equipment for the counties, registration of persons in the Sh45 billion Huduma Namba, the has been no shortage of grandiose projects during Jubilee’s tenure.
The Sh7 billion Galana Kulalu irrigation is a clear testimony of a mega project that has come to nought after gobbling taxpayers money. The dam projects spread across the country have not done any better.
A report by the World Bank in 2012 had warned that there was no economic viability for the SGR. Economist David Ndii had also argued that given the operational capacity of about nine million tonnes, Sh20 billion interest on its debt that translates to Sh45,000 – Sh60,000 per container, makes it difficult for the railway to operate at full capacity all the time.
“Add operational costs, and it is readily apparent that there is no competitive tariff that would enable the railway to service its debt. Moreover, the railway will require both coercion and a massive subsidy to stay in business,” he said. Amani National Congress (ANC) party leader Musalia Mudavadi says Kenya’s economy is growing in the wrong direction. Mr Mudavadi has warned that Jubilee has put the next government in a difficult position as it will struggle to repay the expensive debt the regime has committed the country to. “With the kind of debt mess we are in, the next administration will have a difficult task operating. The legacy for Uhuru is the heavy debt he has committed the country to,” he said.
Mudavadi asserted that for the country to get out of the “debt hole” all the loopholes that enable pilferage of public funds must be sealed. Although the unveiling of the first of the planned 32 berths in the ambitious Sh2.5 trillion Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project has been welcomed, questions abound on the viability of the project at a time when the regional dynamics that saw its conception have changed.
In a statement from State House, President Kenyatta said the mega project will create much needed jobs. Setting up the LAPSSET Corridor Development Authority, a government agency, to manage the Sh2.5 trillion project on behalf of the Kenyan government was among the first things President Kenyatta did after his administration came into office. The government had planned to spend six per cent of the country’s Gross Domestic Product or 16 per cent of its annual budget to put up the project that was in turn expected to contribute an additional three per cent in Kenya’s GDP by 2020.
The project was first conceived in 1975 to create a second port at the Indian Ocean to check the over-reliance on the the Port of Mombasa.
It was also deemed to be the launch pad of a second transport corridor that would open up the largely under-developed northern frontier. The anchor for the corridor was its connection with Ethiopia, South Sudan and parts of Uganda.
But the geopolitical and economic situation has experienced a shift that could injure the prospects of the new port.
Ethiopia has been pushing for an economic union for the Horn of Africa. If successful, that would see it, together with Kenya and Djibouti, work towards joint investments and ownership in each other’s infrastructural projects.
According to stock market trader Aly-Khan Satchu, the rationale behind the Lamu Port is its ability to process bigger ships and serve regional markets more effectively. But Mr Satchu says the project has been overtaken by events. “It is clear the future whilst not seen in a rear view mirror is not coming fast enough,” he said.
Last year, Ethiopia separately signed deals with Sudan and Djibouti for stakes in their Port Sudan and Port of Doraleh respectively. Earlier, Ethiopia had also acquired a 19 per cent share in Berbera Port in Somaliland.