With a few months remaining in the life of President Uhuru Kenyatta’s administration, the jury is divided on the economic impact of the highway projects that have been the hallmark of his government. On the one hand, are those who consider the infrastructure projects a godsend that has changed their lives while on the other are naysayers who claim they cannot eat the new roads. As one of those who have been eating highways with a big spoon and loving it, allow me to explain why the road projects have been the best thing to happen since sliced bread.
To make my case, I wish to look at two corridors that have been the centre of unprecedented investments in road projects. The first is the Nairobi-Naivasha road corridor from Uthiru to Kikuyu which has become an island within a beltway comprising Eastern, Northern and Southern bypasses. With completion of the Western bypass, my fellow villagers will soon graduate to the unique and prestigious league of citizens with an address within a beltway like residents of Washington DC. As icing on the cake, completion of the Nairobi expressway and ongoing expansion of the Waiyaki Way from James Gichuru junction is expected to improve traffic flow between the city centre and the Nairobi-Naivasha road corridor.
Contrary to assertion by the naysayers, the highway projects have brought many positive social economic changes to the lives of the residents. The most notable economic impact has been doubling of land prices where a quarter of an acre that cost Sh7 million a decade ago, now cost close to Sh15 million. Rents have also gone up to the extent that deluxe apartments are fetching monthly rents comparable to units in upmarket estates in Nairobi. Additionally, rising population has resulted in attendant increase in demand for complimentary businesses such as bars, restaurant, nyama choma joints, car wash, supermarkets and hardware stores.
Apart from enabling a booming real estate industry, the area has also witnessed mushrooming of light industries that are taking advantage of proximity to Nairobi and cheap labour. Together, all these economic activities are creating job opportunities and additional incomes for many at the bottom of the ladder.
Socially, the impact has been equally impressive. While 20 years ago the villages along the corridor were primarily populated by members of one family, a thriving real estate industry has created a cosmopolitan environment where Kenyans from every corner of the country call home. Significantly, the economic interdependence between the tenants and the local community has created a peaceful environment that showcases how economic development can build social cohesion.
Another infrastructure project that has immensely impacted the economic and social lives of Kenyans is the Thika superhighway. Using my estate as an example, about 500 artisans work on various construction sites on daily basis. Since on completion the estate will have 4,000 homes that on average cost about Sh20 million to build, you can imagine the amount of money being injected into the local economy from labour costs alone. If additionally you factor money going to hardware stores, welders, transporters and local quarries, the merits of the infrastructure model are inarguably unbeatable.
Notwithstanding the value of the infrastructure model, there is a constituency of naysayers who claim they cannot eat the roads and would prefer the government to put money directly into their pockets instead. At first blush, I was inclined to dismiss such sentiments as either engendered by partisan politics or noises from idlers who want the trickle without the hustle. To these naysayers, let me make two observations.
The first relates to the unsustainability of cash handouts by governments. As the recent fuel shortage of petroleum products in Kenya illustrated, it is always difficult for a government to sustain any form of subsidies for long. The only way to sustain such subsidy is either by raising taxes, cutting government expenditure or increasing borrowing. These options are however not attractive because either the political class will not accept cutback on government expenditure, while raising taxes or debt will only increase unemployment.
The second reason why such freebies are considered undesirable stems from a capitalist ethics that demand human beings to earn their way through life. While such moral squeamishness may seem out of place in a society where we believe that the government is baba na mama, even in our society, it is morally reprehensible to use taxpayers money to subsidise able-bodied souls to live large at everyone's expense.
When US President Joe Biden submitted his budget to Congress, it had two components: Infrastructure and social safety net. The infrastructure projects that were supposed to improve the economy from bottom up received a bi-partisan approval while the social safety net projects such as tax credits for children were rejected. Let us observe and learn.