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We have hit some good Vision 2030 milestones but missed key targets

President William Ruto and Treasury CS Njuguna Ndungu during the launch of the 4th Medium Term Plan (2023-2027) at State House, Nairobi. [PCS]

The Bottom-up Economic Transformation Agenda (Beta) has finally crystallised with the launch of the Medium Term Plan (MTP IV) on Thursday. While this is a critical document for the country in the next five years, its publicity may be crowded out by the noise around signing and coming into effect of the Affordable Housing Act 2023 and the proposal to regularise the Chief Administrative Secretaries by Parliament.

Given the economic significance of the plan, in today’s article I shall highlight the big numbers of the last 15 years and the projections of MTP IV. This will be the last five-year plan before the 25-year Vision 2030 economic blueprint comes to a close. In my view, after 2027 we must undertake a comprehensive impact evaluation of the Vision, properly document its outcomes and impacts (not outputs), lessons learned and re-cast a 75-year master plan for the country towards 2100. Responsible governments and prosperous societies plan outside political cycles and individual political leaders.

My reflections in this article are limited to the information summarised in the forward by the President, preface by the Cabinet Secretary for Finance, the detailed executive summary and a quick general scan of the implementation matrix. The full document totals 412 pages and hopefully we shall dissect its details in the coming days.

Key achievements

For the purpose of placing the listed achievements into context, we first retrace the aspiration of the Vision 2030, its goals and key targets. The vision sought to usher the country into the realm of a highly industrialised middle income country. To realise this, the economic pillar targeted a 10 per cent economic growth by the end of MTP I in 2012 and sustain that growth through to 2030. The social pillar sought to achieve a socially equitable and prosperous society while the political pillar targeted a democratic, accountable and issue-based politics.

According to MTP IV review of the period 2008-2022, the country achieved a low middle income status after attaining per capita Gross Domestic Product (GDP) of US$1,430 (Sh189,475 at current exchange rate of 132.5/$) in 2014. As at 2022, the per capita GDP was estimated at $2,240 (Sh296,800). Over the period, the National Poverty is projected to have declined to 38.6 per cent in 2021 from 46 per cent in 2005/06. The life expectancy for females improved from 61 years to 66.5 years while for males improved marginally from 58 to 60.5 years. Maternal mortality reduced from 414 per 100,000 life births in 2007 to 335 per 100,000 in 2021/22 fiscal year. School transition rates from primary to secondary increased from 59.6 per cent in 2007 to 78.5 per cent in 2021/22.

On the side of infrastructure development, the review estimates that 14,000km of road were constructed and railway passengers peaked at 15.35 million against a target of 13.53 million since the inception of the Standard Gauge Railway services. Internet connectivity grew from 7.7 per cent in 2008 to 93.9 per cent in 2022 while households connected with electricity were 8.92 million by 2022.

Other key economic indicators were: tourism earnings growth from Sh65 billion in 2007 to Sh268.1 billion in 2022; international visitors grew from 1.2 million in 2008 to 2.03 million in 2019; earnings from minerals grew from Sh12.3 billion to Sh35.2 billion; and revenue from fish and fish products from Sh2.98 billion to Sh5.6 billion. The primary achievements under the political pillar was the promulgation of a new Constitution in 2010, the roll-out of a devolved governance structure in 2013 and close to four trillion shillings shared to counties. In addition, there is evidential enlargement of human rights and social freedoms while not exclusively captured in the report.

Main failures

While not unexpected, the dominant failure of the past 15 years of implementing the Vision 2030 was the misses of key macroeconomic targets. The average economic growth rate for the period 2012-2022 was 4.8 per cent against a sustained target of 10 per cent from 2012. Inflation target was to be sustained at below five per cent but averaged 7.7 per cent for the same period.

To attain the industrialised status, the vision targeted manufacturing to contribute 25 per cent of the GDP by 2030. Manufacturing contribution to GDP declined from 10.4 per cent in 2007 to 7.8 per cent in 2022. The ‘BIG Four’ sought to improve this ration from 9.2 per cent in 2016 to 15 per cent in 2022. The Kenya Kwanza administration seems to have abandoned manufacturing as a target altogether with no concrete target under BETA.

While the economy remains largely agriculture-based, the agricultural sector contribution to the GDP averaged only 23.5 per cent for the period 2008-2022 while trade (wholesale and retail) sector contribution improved from 7.4 per cent in 2018 to 7.9 per cent in 2022.

This dismal performance of key sectors of the economy may explain the seemingly difficult economic environment for households and businesses over the past 10 years. The policy planners highlight the main challenges over the review period including low productivity, inequality and weak resilience. Other ongoing challenges are rising inflation and interest rates, fiscal distress and structural weaknesses. They observe that the combined impact of these challenges have converged into a ‘perfect economic storm’ presently witnessed in the country.

This blunt admission of the hard economic realities in the country by the Treasury mandarins is noteworthy. Unfortunately, the same mandarins seem to ignore their own assessment of reality on the ground in a blind pursuit of more tax revenue from taxpayers whose tits have dried up of any more milk.   

Big numbers into 2027

In theory, there is nothing substantially new in the five-year plan period outside the KK manifesto presently christened BETA. For those that have been tracking the administration’s economic philosophy including its pet controversial programmes, then there is nothing much to look forward to except a few hard numbers that have been thrown into the plan.

The main plan objectives for the next five years include bringing down cost of living, eradicating hunger, creating jobs, expanding tax base, improving foreign exchange balance and inclusive growth. Other measures are on optimisation of resources by eliminating wastages arising from overlaps, duplication and ineffective coordination.

For purposes of tracking progress over the plan period, these are the key numbers highlighted in the summaries I have been able to go through. The administration targets to create 1.2 million jobs every year; build 200,000 housing units annually; expand the revenue base to 19.7 per cent of the GDP; improve investment to GDP ratio from 19.3 to 26.7 per cents; increase national savings from 14.2 to 20.8 per cent by 2027; sustain an exchange reserve of 6.1 months import cover; construct 6,000km of road and 100,000km of national fibre optic.

Others include digitisation of 80 per cent of public services and records, recruit 116,000 teachers, improving the population in the informal sector covered by social health insurance from 24 to 80 per cent, and train 40,000 youths every year on paramilitary, national services and technical and vocational enterprises. Majority of planned targets remain generic statements or are defined in outputs, not tangible outcomes. This perhaps explains the tragedy of our national plans.

Reflecting on the totality of the summarised information, it is evidentially safe to conclude that we have already seen the best ideas available in the ranks of the Kenya Kwanza administration. There won’t be any alternative magical wands in the coming days and months. Just plan, adjust and align on the reality of what you have witnessed over the administration’s 18 months in office now!

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