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How officials' laxity is denying Kenya faster growth

By Mbatau wa Ngai | March 26th 2016 at 00:00:00 GMT +0300

Cabinet Secretary, Ministry of Industry, Investment and Trade Adan Mohamed (centre) addresses a press conference alongside East African Community (EAC) Integration Principal Secretary Betty Maina (left) and International Trade Principal Secretary Chris Kiptoo shortly after opening a stakeholders meeting to discuss implications of trade policy reforms on March 11, 2016. [PHOTO DAVID NJAAGA/STANDARD

Cabinet Secretary for Industrialisation and Enterprise Development Adan Mohamed’s inspection of the progress made in preparations to launch Kenya’s first leather industrial park in Mavoko earlier this week, revealed the underbelly of the Kenya’s march towards the much-hyped Vision 2030.

The CS demanded answers from the management of Export Processing Zones Authority (EPZA) on why simple tasks such as cutting down trees to construct roads and to build temporary offices had not been done. This is because in barely a month President Uhuru Kenyatta will launch the project.

To his credit, the CS has come up with a clear roadmap about how the country can advance.  Kenya’s industrial sector has stagnated at producing only about 11 per cent of the country’s Gross Domestic Product yet it can create jobs for 435,000 more people. He launched the country’s 10-year manufacturing plan last September. The leather industrial park is part of this ambitious plan.

But, going by the pace of work being executed in Mavoko, the government might have to go back to the drawing board to come up with a better plan on how to execute its overall strategy for the lethargic laxity found at the EPZA is not unique. The malaise is found in a majority of parastatals many of which were to be either merged or dissolved. Why the process was shelved even after the International Monetary Fund (IMF) gave the country Sh600 million to fund the programme may be better explained by the political intrigues of the times than economic considerations. Be that as it may.

The inescapable lesson from the leather industrial park saga, however, is that the existing government departments and agencies cannot be relied upon to deliver Vision 2030. Anyone doubting this proposition needs only look at country’s struggle to grow the economy at 10 per cent, as promised. Yet, this is the minimum rate that was projected to propel the economy towards Vision 2030.

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Perhaps, Jubilee government might be persuaded to accept that the administrative system it inherited cannot deliver even after a few changes at the top of the cumbersome bureaucracy that has, over the years, grown more adept at extortion than delivering services to the public. That would open the President and his deputy’s eyes to seek help from any of the Asian Tiger’s nations of South East Asia which successfully walked this road and delivered the majority of their people from poverty in one generation.

The other proposition State House has to accept is that it needs to empower the people implementing its programmes to work twice as hard as the Asian Tigers because both the national and international environment has changed dramatically over the past half century.

The good news is that Kenya still enjoys a unique window of opportunity that should not be allowed to shut because of failure to eat humble-pie and ask for outside help when necessary.

This window is provided by the fact that under the Africa Growth Opportunity Act (Agoa) and the European Union legislation, Kenyan goods enter these two markets duty-free. That means investors in both the leather, textiles and apparels sectors have a ready market not only locally but also regionally, in Europe and the United States of America.

Infrastructure bond

Yet, another paradigm shift that government may need to make if Vision 2030 is not to become another bridge too far is that investments in these sectors will not be brought by foreigners. Kenyans have the financial capacity to invest in them. They also have the ability to pay for the necessary technological and human resource expertise from wherever it can be found.

The only thing required is for the government to accept this reality, set up the necessary Special Purpose Vehicle to invest in the proposed ventures and mobilise the required funds from the public.

Surely, this should not be too difficult for President Kenyatta to do considering that as finance minister in the coalition government of former President Mwai Kibaki he presided over the successful launch of the country’s first infrastructure bond that was hugely oversubscribed. Surely, what the President did then as finance minister he can do now as the ultimate boss.


adan mohamed Export Processing Zones Authority (EPZA) kenyan economy
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