Kenya's Treasury turns to private sector to plug annual Sh200b Big-Four hole

From left: Treasury CS Henry Rotich, Chief of Staff President's delivery unit Nzioka Waita, Head of legal function at PPP Unit Ronoh and Treasury PS Kamau Thugge

NAIROBI, KENYA: Kenya needs at least Sh200 billion every year to finance all the projects under the Big Four agenda, money that Treasury says it does not have.

The Government is enlisting the help of the private sector in the realisation of President Uhuru Kenyatta’s dream of ensuring universal healthcare, job creation, construction of 500,000 low-cost housing units by 2022, food security and nutrition.

National Treasury Cabinet Secretary yesterday unveiled the Public Private Partnership (PPP) Disclosure Portal, from where members of the public, media, civil society and other interested parties will learn about PPPs deals signed in the country.

Those who visit the portal can monitor the projects from different stages, starting from Identification and Preparation, pre-procurement, during procurement, post tender and after execution of project agreement.

"In order to realise this agenda, the Government is cognisant of the fact that it will need to deploy both physical infrastructure and technical expertise across all 47 counties. This will be a capital-intensive venture that we cannot hope to finance through the national budget alone," said Mr Rotich, noting that to achieve this through development agenda, they would need to partner with the private sector.

National Treasury PS Kamau Thugge said with the leg-room to chalk up more debt shrinking, PPP was the only way for the Government to continue with mega infrastructure projects without bursting the debt limit.

“PPP is our way of having our cake and eating it,” said Thugge, noting that with PPP the State will continue with the construction of mega infrastructure projects that have mostly been debt-financed.  

PPP would, as such, is a critical item in the ongoing fiscal consolidation in which the Government hopes to reduce fiscal deficit from the 2016/17 rate of 9.1 per cent of GDP to 5.7 per cent in the 2018/19 financial year.

KCB is one of the players in the ongoing PPP project that involves the construction of Ngong-Kiserian-Isinya and the Kajiado-Imaroro road under the annuity programme. The Government aims to tarmac 10,000km of roads.

KCB CEO Joshua Oigara said they were also involved in the financing of other projects, such as police housing.

Besides KCB, another financial institution that is already involved in the PPP, is CFC Stanbic, which is participating in two projects that were not identified.

In 2014, the State unveiled the Sh260 billion annuity programme, which would see commercial banks provide funding to road contractors.

The contractors were responsible for finance, design, construction and a 10-year long-term maintenance of the roads, with the Government acting as the guarantor.