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Treasury prepares to sink billions into elusive Big 4 projects

Treasury CS Ukur Yatani. Treasury is again planning to spend heavily on Uhuru Kenyatta’s legacy projects. [File, Standard]

Each year since 2018, the National Treasury has given the Big Four Agenda special attention during the budget-making, splashing billions of shillings in what it terms as drivers and enablers of President Uhuru Kenyatta’s legacy projects.

The Big Four was the prominent item in 2019/20 budget themed, Creating Jobs, Transforming Lives - Harnessing the ‘Big Four’ Plan.

Between 2018 and the financial year to June 2022, the Government has allocated more than Sh1 trillion to Big Four Agenda enablers and drivers.

The big spending on Big Four continues in this year’s budget, with Treasury making explicit its plans to continue spending heavily on the enablers to make it easy for public and private investments in the Big Four Projects.

In the Budget Policy Statement (BPS), Treasury said among the key areas of focus in the 2022/23 budget would be the Big Four.

“The budget framework has focused on the Big Four Agenda, Post Covid-19 Economic Recovery Strategy and the strategic policy initiatives of the government to accelerate growth, employment creation and poverty reduction,” says Treasury in the BPS, a key tool that steers the budget-making process.

While there is consensus that the government has covered some ground in getting the Big Four Agenda ongoing, there is the view that it has fallen behind on many targets and entirely missing the mark on others.

“Despite some reported achievements under the Big Four agenda, the overall targets for each of the pillars have largely been missed. This implies that so far, implementation of the Big Four projects has not translated into expected outcomes,” said the Parliamentary Budget Office.

Infographics: The Standard Checkpoint.

Treasury, however, says that in the four years that the Government has been implementing the Big Four projects, a lot of ground has been covered and there are tangible benefits for Kenyans, including the creation of more jobs.

“Since initiation, the Government has continued to implement programmes under each pillar of the ‘Big Four’ Agenda, by formulating enabling policies and enhancing resource allocation,” says Treasury in the BPS.

“These efforts have borne fruits in improving livelihoods through creation of jobs and poverty reduction.”

The Big Four Agenda was adopted as part of Kenya’s development blueprint - Vision 2030 and the Medium-Term Plan III between 2018 and 2022. It was focused on four major areas - food security, affordable housing, manufacturing and affordable healthcare.

While it may have registered some success as Treasury believes, the government is nowhere near putting up the half a million low-cost houses or providing food to all Kenyans as it had promised in 2018.

For many, universal healthcare remains a pipe-dream while the manufacturing sector has over the four years declined to about 7.6 per cent in 2020. Mr Ken Gichinga, chief economist at Mentoria Economics noted that while there may have been momentum in the initial years, this has since slowed down.

President Uhuru Kenyatta. The Government has allocated more than Sh1 trillion to Big Four Agenda enablers and drivers. [PSCU]

When looking at affordable housing, Mr Gichinga notes that the government has constructed a few thousand affordable housing units but is short of the 500,000 units it promised at the onset of implementing the Big Four Agenda.

“On the affordable housing front, there has been some progress. There is some really visible work in the projects in Nairobi’s Ngara area,” he said.

“When it started, it appeared as if it was a government project but the costing might have led to the thinking that it is better to create an environment that the private sector can be able to utilise.” Mr Gichinga however notes that a mix of factors have held back the private sector from venturing into affordable housing as the State had envisioned.

“The private sector appears kin but there are challenges that hinder the sector and I think work has to go into removing the barriers,” he said.

“The thinking that government should create an enabling environment is a good approach but there is need to improve such areas as taxation and regulatory environment before the private sector can maximise the potential.”

He said the demand side is equally affected. While there is a shortage of houses in the country, many of the units that come to the market are usually priced beyond the reach of many Kenyans.

“Pricing remains key and even when the phrase affordable housing is used but the price varies and in many instances way above what the buyers would be offering. There is a housing deficit and the demand for housing is there but prices are a hindrance,” said Mr Gichinga.

“The economic power among the people also contributes to demand. Over the last two years, people have been losing jobs and businesses are not doing so well. The purchasing power is not there and people might not be there. So you might end up with many units but the demand remains soft.”

Manufacturing, whose contribution to the economy was supposed to go up to 15 per cent by end of this year, has been declining and stood at 7.6 per cent in 2020 from 8.4 per cent in 2018.

“Manufacturing has gone into reverse. Our manufacturing strategy is still fundamentally unsound. For manufacturing to grow, we need a few things to be working such as the cost of energy and the taxation regime as well as underlying manufacturing linkages,” said Mr Gichinga

The Government has put in place mechanisms that could push the manufacturing sector - including a reduction in the cost power in the country, with a 15 per cent reduction effected in January this year and another 15 per cent expected before the end of this month.

There are other incentives including the Times of Use of Tariff that offers a 50 per cent discount on power consumed during off-peak hours.

On the health front, the government had hoped to offer affordable health while increasing access by 2022. It had rolled out Universal Health Coverage (UHC) on a pilot basis in the four countries of Kisumu, Isiolo, Nyeri and Machakos. The State is attempting to scale this up to all counties.

It however faces the challenge of inadequate infrastructure and personnel. “UHC remains promising. But there is a lot to be done in terms of funding. The funding model needs to be tweaked,” said Mr Gichinga.

“We have quality doctors and other public health personnel but they do not have supplies and in many instances patients share beds.”

Among the areas that registered improvement include healthcare and transport infrastructure projects. [File, Standard]

Dr Sam Nyandemo, an economist and lecturer at the University of Nairobi said the Big Four has registered a mixed bag with the government hitting some of the targets and missing others.

Among the areas he noted had registered improvement include healthcare and transport infrastructure projects, the latter being a key enabler for development.

He said the State has had to contend with major challenges over the four years that saw it divert resources to deal with them. The biggest of these challenges has been Covid-19.

“There have been numerous challenges that compromised the full implementation of Big Four. A lot of resources were diverted to deal with such challenges as Covid-19… there were also locusts during the implementation period and we have had droughts that negatively impacted agricultural activities,” he said.

“All these saw a lot of resources being taken away from the projects to deal with the emerging issues.”

He noted that differences between the president and his deputy also came in the way of delivery of the ambitious projects. “With divided loyalty, the aspect of implementing fully what you had declared as a team becomes compromised,” he said.

Dr Nyandemo said among the factors that have seen President Kenyatta root for a Raila Odinga presidency include ensuring that the Big Four projects are seen to their conclusion, or at least to a point where his legacy is fulfilled.

“That is one of the issues Uhuru is fighting for, to ensure continuity,” he said. “A lot of resources have been put to use in getting the Big Four projects off the ground and to avoid these ending up as white elephant projects, that element of continuity is what Uhuru is propagating so that the different projects are completed.”

And while achieving many of the Big Four projects that will be left hanging by the Jubilee regime would be good for the new administration, Dr Nyandemo noted that there is a need to focus on the high cost of living that has hurt many Kenyans.

“The government must concentrate on a strategy that will make it easy for Kenyans to put food on the table and reduce prices of essential commodities,” he said.

Mr Gichinga is of a similar view, noting that it would be better to complete some of the projects that are already underway.

He said there is a need to give priority to areas that would make it easier for the country to live within its means while having a bigger impact on the lives of Kenyans.

“We need a re-prioritisation of projects…. remove things that are non-core for government and lower the budget deficit, which means that the tax collected can be used more efficiently,” he said.“Where they have started it might be cheaper to complete them but there might be a need to shelve some of the projects that are yet to take off.”

Food security remains an area of disappointment, according to the two economists. “On food security, the government has completely missed the target,” said Mr Gichinga.

“When it comes to matters of security whether food, military or other forms, it is better to do it locally even if it is expensive or inefficient to undertake.”

Dr Nyandemo said the food and nutrition pillar of the Big Four should be a key issue for the next government. “We must resort to heavy irrigation projects so that we can move away from relying on rain-fed agriculture and if you look, there has been progress in terms of completion of key dams,” he said.

  An Oxfam report published last week showed that 3.1 million Kenyans are facing starvation. “Kenya has suffered a 70 per cent drop in crop production… with 3.1 million people in acute hunger, now in need of aid. Nearly half of all households in Kenya are having to borrow food or buy it on credit,” said Oxfam.

The dire food situation in the country, the State says has been due to poor rains during the October-December season, worsened by Covid-19. The late onset of the March-May long rains may further complicate the situation in the country.