Interview: Uhuru Kenyatta
What have been the biggest challenges in implementing the Vision 2030 framework?
UHURU KENYATTA: Among the challenges we have faced putting together a framework for the projects, governance, financing and coordination are perhaps the most serious. Inefficiency, corruption and inadequate planning have held us back; we have not always been able to find the money we need at reasonable prices, and it has taken us longer than we expected to get the right sorts of monitoring practices in place.
As you might have seen, this government has gone to war with corruption, and we are also digitising and publicising a very wide range of government procedures and information. We have also put in place a tough new set of rules for public officers serving in state corporations. The aim is to pre-empt corruption by making information public, and by making explicit the standards expected of public officers, and to deter it by exemplary punishment. The eurobond proceeds proved useful in getting financing at reasonable rates. We now have a unit in government that is devoted to managing the progress of our projects.
What immediate measures would help improve Kenya’s position as an investment destination?
KENYATTA: Kenya is already an attractive investment destination, given the policy improvements of the last few years: we’ve tightened our fiscal management; improved our gathering and management of economic information; taken steps to ensure that growth is equitable and inclusive; and are working on improving integration and infrastructure. I mention all these points because it would be a mistake to simply look at our plans for the next few years without considering what has come before. In response to this question one year ago, I said that our priorities would be infrastructure, energy and digitisation.
I don’t need to tell you that Kenya has had to put up with a long-term gap in infrastructure. That’s especially true outside of our towns and cities. We can’t grow our economy if we don’t bring infrastructure up to speed and spread it more widely around the country. That’s why we launched the Standard Gauge Railway, whose progress is on schedule, and that’s why we’ve launched a programme to bring up to 5000 MW of power to the national grid.
I should mention here that much of our energy, up to 65% by some estimates, is green. A lot of that is geothermal, much of which has come on tap since 2013. Consequently, we have already seen a sharp rise in our electricity generation and a fall in the cost of power. We need to keep that momentum going.
The point of all this infrastructure is not just to lower the cost of doing business – we are also looking to spread economic activity more widely. We cannot grow as quickly as we would like unless we can get a broader regional distribution of economic activity. Opening access to good roads and reliable power is the start of inclusive growth, and investors want this.
How concerned are you about youth unemployment, and what can be done to further reduce it?
KENYATTA: This is obviously a very serious concern. But we need to look at the problem calmly. We’ve seen that the key constraints for youth unemployment are capital and facilitation. Once you put capital at reasonable rates in the hands of our young people, and help them relate to the institutions they need to work with, then they tend to do well for themselves, and to create new opportunities for others.
So what we have done is set up a fund, the Uwezo Fund that supports groups of young people who have joined together to establish a business. We have also set aside 30% of government procurement for young people and marginalised groups. Both programs are beginning to make a difference. As always, if we give the young a chance to grow their own enterprises, then the jobs they need will follow their lead.
The other point to make here is that there remains room for growth in a number of important sectors. Both agriculture and manufacturing grew in 2014, at around 3.5% each. In the recent past, each of those sectors has grown at above 5%. If we can return growth in those sectors to previous levels, we will make a serious dent in youth unemployment.
Much higher growth is certainly possible – part of the potential growth in agriculture in 2014 was lost because of poor rainfall. What we are doing is ramping up irrigation projects, so that we can escape dependence on rain-fed agriculture and reap the benefits in food security, growth and employment.
I also think that growth in services will have good knock-on effects for jobs. Our services sector grew at nearly 6% last year, in spite of lower tourist numbers. Tourism will rebound, and other parts of the service sector also have very good potential for growth – we have seen good prospects in ICT and professional services, for example. These are sectors where Kenya can grow even faster, and this is good for the young.
What can be done to expand and strengthen the current plans for fiscal harmonisation and economic integration within the EAC?
KENYATTA: I think we need to work harder on getting the political preconditions of harmonisation right. It is also clear to me that we need to try to integrate economically before attempting fiscal harmonisation. Without real economic integration, it is not clear why fiscal integration is a good idea. With real economic integration, the momentum for fiscal integration will be quite strong. To my mind, then, the real issue is to get the economic integration done properly.
We have seen very encouraging progress in aspects of economic integration. At the last Northern Corridor Infrastructure Summit, for example, we were able to report advances in the Single Customs Area plans; we saw greater commitment to the plans for a single tourist destination; and we saw a strong resolve to push the Standard Gauge Railway project to its conclusion. We also have the Democratic Republic of Congo announcing its interest in joining our regional infrastructure cluster. That strengthens my conviction that if we get economic integration right in the first place, the political project will follow.
What measures might improve overall transparency in Kenya’s business environment?
KENYATTA: As I’ve mentioned before, we need to do more to put information about government procedures online and increase public awareness. There has been some serious improvement here, as far more of government is now online and publicly accessible. Applications for visas, searches for company records and so forth are examples. The more transparent and public we are, the harder we will squeeze corruption.
What impact has devolution had on rural development and inclusive growth?
KENYATTA: Let me select just one point for emphasis. In the past, development was not nearly as inclusive as it needed to be. Now, under devolution, there really is a clear mechanism for inclusion – local governments, and the people they represent, have a much larger say in the setting of priorities and budgets for development. We have a much clearer process for the division of revenue between the different levels of government, and a much better representation for the regions in this whole procedure. I would also point out that parliament is also much more involved in the planning and preparation of budgets.
It is important to point out that this is a long-term process. There will be setbacks, delays and disagreements: this is simply a fact of life in the world of politics. However, the truth of the matter is that development is now more inclusive and participatory than it has ever been at any time in Kenya’s history.
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