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Grand plan for regional bloc merger falters

By Kepher Otieno | Published Sun, July 23rd 2017 at 00:00, Updated July 22nd 2017 at 21:42 GMT +3


Almost five years after its inception, the Lake Region Economic Bloc (LREB), is yet to realise its full objectives as many of its flagships projects remain stuck.

The regional bloc is spearheaded by Kisumu, Kisii, Siaya, Migori, Homa Bay, Vihiga, Kakamega, Nyamira, Bomet, Busia, Bungoma, Kericho and Trans Nzoia counties. It was launched in 2013 to enable transfer of technologies across borders resulting into the improvement in productivity and quality of goods to hasten economic growth.

It is yet to come to fruition because it has been facing multiple challenges among them; relaxed commitment from some member counties to release funds towards its cause. Each county was expected to contribute Sh200 million.

According to the Head of LREB secretariat, George Kabongah, only four governors have committed Sh800 million towards the proposed LREB Investment Bank and seconded staff to the secretariat.

They are Governors Wycliffe Oparanya (Kakamega), Jack Ranguma (Kisumu), James Ongwae (Kisii) and Isaac Ruto (Bomet). Its top priority was anchored on the seven pillars of agriculture, industrialisation, health, tourism, financial services, education water and resource management, infrastructure and ICT.


Each county heads a pillar superintended by another. In the LREB member counties agreement, the cash was to be deposited in a special account and consented by Central Bank of Kenya -- as the depository agency. “It was agreed that no county would access the money or withdraw it until all members have contributed the agreed amount,” Kabongah says.

They were to also raise Sh130 million for setting up of the LREB secretariat. So far only Sh32 million has been collected. A team of representatives was in Washington DC in the United States in November 2015, in a tour organised by Deloitte, where they met World Bank Africa Vice President and Country Coordinator. World Bank pledged Sh500 billion towards LREB construction.

The donor has issued an ultimatum that members must set up a fully-fledged and running secretariat including a clear development blueprint. Kisumu, the host county has already donated an office space where four others have seconded staff to commence operations. President Uhuru Kenyatta officially launched the project during the Council of Governor’s conference held in Kisumu in 2015.

The governors have also enlisted the support of Deloitte and Touche Kenya Group of consultants to help them draft policy and legal legislation framework to guide their management operations.

“One of the key aims was to leverage the economies of scale on investment conference, so that instead of each county holding its own investment conference, they do it as a bloc,’’ Kabongah says.

LREB team has also visited Virginia University in the US where they were promised technical support in human resource training and in agriculture especially in aquaculture. “They were also in Virginia Business Council that promised to provide infrastructure development of up to Sh5 million upon setting up the requisite and actionable development structures.

The promises have now triggered them into action. This week the team met their consultants at Kisumu Sovereign Hotel where they held closed door meeting to validate the policy and legal frameworks.


“LREB legal counsels, economic advisors and Chief Finance officers are reviewing it to make necessary amends before ratification,’’ Kabonga says. Kisumu Senator Anyang’ Nyong’o argues that the Lake Basin Economic Forum will be an important catalyst for the 13-member counties. It will create linkages for economic sub-sectors and collective voice on trade.

Kisii and Kisumu governors James Ongwae and Jack Ranguma hailed the LREB as a “milestone” aimed at combining the economic forces of the resource-rich and growing lake regional market of about 14 million people.

“The vision for LREB is to have a single market with a free flow of goods and capital to compete with the likes of other blocs such as North Rift Economic Bloc, among others,’’ Ranguma explained.