Out-Law News | 11 Jun 2014 | 10:04 am | 2 min. read
The bank’s executive board has approved a new ‘Country Partnership Strategy’ (CPS) for Kenya, supported by the bank group’s International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency.
Under the CPS, the bank said all three organisations are “committed to leveraging private resources for innovative financing for infrastructure, including public-private partnerships in energy, water and transport”.
IFC’s director for eastern and southern Africa Oumar Seydi said: “Inclusive growth requires job creation through a dynamic private sector. We aim to expand our support for strong businesses in an increasingly competitive economy.”
The IFC said it will provide “investments and advisory services to help expand access to finance, promote more businesses and improve the investment climate, while supporting agribusiness and infrastructure."
The bank said the CPS was drawn up in close consultation with the Kenyan government and “extensive consultations” with Kenya’s county governments, the private sector and civil society organisations.
According to the bank, while Kenya’s growth has increased at an average of 4.6% annually over the past 10 years, “poverty and inequality have fallen less dramatically, which has prevented many Kenyans from sharing in the benefits of the country’s strong economic performance”.
Kenya’s CPS is designed to support the government’s ‘Vision 2030’ priorities, which includes “development investments in more and better quality infrastructure, improved health, social protection, rural development, and other areas that can increase economic opportunities while lowering inequality”, the bank said.
Vision 2030 has identified infrastructure as an “enabler of Kenya’s transformation”, such as the completed Thika Superhighway, designed to boost trade in the East African region, and the $325 million greater Nairobi commuter rail project, including laying new track to link Jomo Kenyatta International Airport (JKIA) with the Nairobi central business district.
A new ‘Greenfield Terminal’ is expected to give JKIA handling capacity for an extra 20 million passengers a year when construction is completed in 2017. The Export-Import Bank of China is providing a loan for 85% of the project’s cost.
Kenyan president Uhuru Kenyatta told business leaders in Nairobi last week: “As government, we believe that ours must be a partnership with the private sector. We are here to facilitate you so that you can help us meet our social and economic development agenda for this country.”
Kenyatta said the government had begun to digitise all payments to make it easier for the private sector to get public services and had established an electronic procurement system “that makes contracts more transparent”. “This will improve efficiency for the benefit of the private sector in terms of the time taken to be served in government offices.”
Kenyatta has also directed his senior ministers to “ensure they meet with private sector representatives at least once a month to iron out any emerging issues regarding improvement of the business environment”.
At a regional level Kenyatta, who is the current chair of intergovernmental body the East African Community, said Kenya “will continue pushing for rapid integration and removal of hurdles that hinder the operations of Kenya’s private sector in the neighbouring countries”.
In March 2014, the African Development Bank Group’s Country Strategy Paper for Kenya (CSP) for 2014-18 said the country has significant potential to further capitalise on regional markets and strengthen its position as East Africa’s “economic powerhouse”.