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Kenya struggles to give life to futuristic city

NEWS
By Thomson Reuters Foundation | December 16th 2018
Men at work at Konza Complex Phase One two years ago.

Labourers milled around an unfinished eight-storey building in an expansive field in Konza dotted with zebra and antelope - the only visible sign of progress in a decade-old plan to turn Kenya into Africa’s leading technology hub by 2030.

Grandiose plans, red tape and a lack of funding have left Konza Technopolis - the Sh1.5 trillion new city to be built some 60 kilometres southeast of Nairobi - way behind schedule on its goal of having 20,000 people on site by 2020.

“It has taken too long and I think people have moved on,” said tech entrepreneur Josiah Mugambi, founder of Alba.one, a Nairobi-based software company, who was initially excited by the Government’s ambitious project.

Dubbed the Silicon Savannah, Konza aims to become a smart city - using tech to manage water and electricity efficiently and reduce commuting time - and a solution to the rapid, unplanned urbanisation which has plagued existing cities.

About 40 per cent of Africa’s one billion people live in towns and cities and the World Bank predicts the urban population will double over the next 25 years, adding pressure to already stretched infrastructure.

Konza’s dream is to become a top business process outsourcing hub by 2030, with on-site universities training locals to feed into a 200,000-strong workforce providing IT support and call centre services remotely.

But the first building has yet to be completed on the 5,000-acre former cattle ranch three years after breaking ground, and business has shifted its focus to other African countries, such as Rwanda, with competing visions to become modern tech hubs.

“Nobody can wait that long for a city to be built. For a tech entrepreneur, they think about where their startup will be two to three years down the line,” said Mr Mugambi.

Other smart cities planned across Africa include Nigeria’s Eko Atlantic City near Lagos that will house 250,000 people on land reclaimed from the sea, Ghana’s Hope City and an Ethiopian city styled as the real Wakanda after the film “Black Panther”.

Bringing such utopian schemes to life is no easy task for African governments that are struggling to provide adequate roads, power, water and security to their existing cities.

“Upgrading infrastructure in places like Kibera in Nairobi to provide water and a better sewerage system is equally as important as building a new city such as Konza,” said Abdu Muwonge, a senior urban specialist with the World Bank in Kenya.

Some critics say Konza was ill-conceived from the start.

“The vision is wrong; the vision is too big,” said Aly-Khan Satchu, a Nairobi-based independent financial analyst.

“This is miles from anywhere. They are not leveraging the existing infrastructure ... It is assuming that you can bring in academia, you can bring in venture capital, you can bring in corporates.”

Land acquisition

The first serious hurdle arose in 2012 when the National Land Commission (NLC) introduced a cumbersome land acquisition procedure, said Bitange Ndemo, who led a team that conceived Konza Technopolis in 2008.

“The NLC was saying we should follow the processes of acquiring public land, which would take years to complete,” Prof Ndemo, now an associate professor of business at the University of Nairobi, told the Thomson Reuters Foundation.

The delays caused at least one deal with a German university to fall through, he said, as the process was much slower than the old one where investors signed deals directly with government ministries which took care of land leases.

To resolve this, the Government transferred ownership of the site to the Konza Technopolis Development Authority (KoTDA), set up in 2012 to co-ordinate development of the new city, which now allocates land to investors on 50-year renewable leases.

Financing has also proven a major issue. In its strategic plan, the Government promised to fund 10 per cent of Konza, laying the infrastructure, while the private sector would come in to build universities, offices, housing and hotels.

But the Government was slow to contribute its share and has yet to pass a law to create KoTDA as a legal entity which would make it easier to sign contracts with external lenders, said Lawrence Esho, one of Konza’s former project planners.

“They are way behind schedule partly because the Government took time to give Konza money,” he said, adding that no cash came in until 2013.

“This stopped any work from starting at the site and investors may have developed cold feet as they waited.”

KoTDA Chief Executive John Tanui said the Government has committed to invest more than Sh80 billion.

“When I say committed does not mean we have absorbed. Our absorption is less than 10 per cent of that figure,” he said. The Government has stepped up funding since last year, said Abraham Odeng, deputy secretary at the Information Communications and Technology ministry, without giving figures.

Odeng pointed to a Sh40 billion contract signed in 2017 with an Italian firm to build roads, water and sewerage infrastructure by 2021, funded by the Italian government.

“That is a concessional loan, which is a long-term (debt) that the Kenyan government will pay,” he said.

But Kenya’s growing reliance on loans is causing jitters, with the International Monetary Fund warning of an increased risk of default this year.

The Washington-based lender forecast Kenya’s total public debt will reach 63 per cent of gross domestic product this year, up from 53 per cent in 2016.

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