OBG talks to President Uhuru Kenyatta

Interview: President Uhuru Kenyatta

What are the challenges to the implementation of Kenya’s Vision 2030 development plan?

PRESIDENT UHURU KENYATTA: It is clear that Kenya has occasionally had governance problems in the past, especially where projects of this magnitude are concerned. Money has been wasted through inefficiency, corruption and poor planning. The challenge for us is to make sure that our ambitions are not damaged by incompetence, inefficiency or corruption. That is why we are digitising a very wide range of public records, consulting as widely as possible and relying on the best professional advice.

In the last decade, Kenya has rediscovered the importance of improving its infrastructure – roads, ports and power generation plants, among others, need to be expanded. The growth we seek cannot be achieved or sustained with our present infrastructure and power. We have committed to a very ambitious programme of constructing new infrastructure and upgrading the existing stock, whether it be our ports or our main roads. We have also committed to bringing on up to 500 MW of extra power in the next few years. The aim is to ensure that we have the structure we need to carry out our ambitious plan for development.

The last challenge is somewhat more intangible. Given the history of large infrastructure projects and the difficulties in achieving sustainable growth that Africa experienced some decades ago, one finds that some of us have given way to cynicism and despair. Some have lost the self-belief without which it is impossible to improve our lot. We need to be wary of this. We dare not let ourselves be distracted by the negative narratives which one still finds in too many quarters. We look to our past to find examples of African success against the odds, and we gather our courage to try again.

What are the key reforms needed to improve the attractiveness of Kenya as a business destination?

KENYATTA: We must first recognise that we have already made sensible reforms – opening our market, tightening our fiscal management and so on – which explains our level of development. Our reward for the discipline we showed in the recent past is an uptick in GDP growth, projected at 5.8-6% for 2014. This is significant, given the 4.6-4.7% growth rate recorded in 2012 and 2013. Inflation remains low, the shilling remains stable against major trading currencies and we have recently floated an oversubscribed eurobond that allowed us to borrow at reasonable rates. Of course, more can be done. We can lower the cost of business and ease the work of the private sector by focusing on three key areas: infrastructure, power and digitalisation.

In late 2013, we launched the standard-gauge railway project. We expect it to deliver a major boost to local trade and to cement Kenya’s position as a regional economic powerhouse. The line will run from Mombasa to Nairobi in the first instance, and it will then be extended to Kampala, Kigali and Juba. Thousands of jobs will be created. The project will reduce freight transport tariff charges, and will reduce transit time by freight trains from 30 hours on average to eight hours. Our projections show that it will sharply cut the cost of doing business in Kenya and in the region.

We have also earmarked billions of shillings for the addition of 500 MW of electricity to the national grid in the next 36 months, and to lower electricity prices by at least 50% in that period. The capacity will be developed chiefly through diversification of the power generation sources, and by expanding the generation and distribution spectrum. We have chosen to do this by encouraging cooperation between government power utilities and independent power producers.

As for digitisation, this is only one facet of a transformation of our methods of public record keeping. One constraint on business has been the delay it takes to get agreements registered, or to find relevant data. We have attacked the problem head on – there is an extensive clean-up now in progress at the land registries; we are digitising land records; we are accelerating business licensing and registration by introducing the latest technology; and we are improving public services through the Huduma centres, which will help conduct business quickly, transparently and efficiently.

How would you rate the progress in devolving fiscal and political power to the counties?

KENYATTA: The new county governments were established with very little disruption. Staff and budgets were found for them. Thousands of staff were moved from the national government to the counties, where they could serve Kenyans more closely. Functions have been devolved even faster than the constitution required: where it envisioned a three-year transition period, many were transferred long before that deadline. And we have already raised the allocation from the minimum – 15% to 42%. This is perhaps the most extensive reorganisation of an African state in peacetime. It is a remarkable achievement by any standard, especially when we remember the number of institutions that had to be established and coordinated. Of course, there have been teething problems, but we are generally pleased with the progress of devolution so far.

What steps can be taken to deepen economic integration within the East African Community (EAC)?

KENYATTA: We have taken concrete measures that have had a direct impact on integration. In the last few months, transit of containers from Mombasa to Kampala has dropped from 18 days to four days, while transit time from Mombasa to Kigali has been reduced from 22 to six days. In addition, multiple Customs declarations for fuel have dropped by 90%. In April 2014, we launched the East Africa Tourist Visa and agreed to use identity cards as travel documents. These two initiatives have been rolled out successfully. With the advent of the single tourist visa we are now able to market the EAC as a single tourist destination. The use of ID cards as travel documents across the borders of participating countries has eased travel for our citizens, facilitating cross-border trade as well as integration at the grassroots levels. We have also agreed to remove all non-tariff barriers and technical barriers to trade. There are also other measures in the pipeline.

What impact has the continued instability in Somalia had on Kenya?

KENYATTA: There is no doubt that the troubles in Somalia have robbed us of a partner in trade and the development of the region – they have also impacted our security. Our basic approach is to do everything we can to restore peace and stability in Somalia, so that its people can join in the full development of the region. That effort has required, and continues to require, the support of regional, continental and other players. We remain convinced that our present strategy minimises the security problems, while giving Somalia the best chance of peace and prosperity since the civil war.

What role can Kenya play in supporting development in South Sudan?

KENYATTA: We have an obligation to support South Sudan: it is the newest independent nation in Africa and the latest example of the determination of Africa’s people to take responsibility for their own destiny. We all also know that neighbours prosper together. But this can happen only when there is peace and security. In that way, the peace and prosperity of the region depends on peace and prosperity in South Sudan. That is why Kenya has done all it could to mediate an end to the conflict, continuing the support it gave for a peaceful resolution to the earlier conflict. The latest example of that resolve is the extraordinary summit of the Intergovernmental Authority on Development in October 2014, which agreed to strong resolutions for the near future, while assuring the leadership and people of South Sudan that we would walk the difficult path to peace with them. We have also worked out infrastructure agreements with South Sudan to help integrate the country into the region. We remain hopeful that the current crisis will be sorted, and that our youngest neighbour will take its rightful place in the region.