More incentives needed to lure county investors

Opinion and Analysis

A fish monger in Kisumu town. Counties in the lake region are set to benefit from a joint economic plan. PHOTO | FILE 

By THOGO JOSEPH

A couple of years ago, a student from a high school in Nairobi presented a memorable soliloquy during the National Schools Drama Festivals which had the president in stitches.

The narrative which sought to bring to light the benefits accruing from devolution, tells the story of a fictional character, Sylvester Ogwamfumbe, who moves to Nairobi from his rural village prospecting for greener pastures only to find that life in the city is not what it is made out to be.

After enduring untold and humiliating hardship in ‘Lower Karen’, the disillusioned young man decides to go back to his Nyamthoi county to start a new life.

The story ends with the young man boasting about how his business ventures have taken off, the types of clothes that is wearing and the different countries he has visited as a result of taking advantage of the opportunities presented by devolution in his county.

Devolution has brought previously non-existent development and opportunities closer to citizens. Within the devolved structure, Kenyans can now participate in the planning and implementation of development agenda in their region.

It is perhaps drawing on this that at last week’s Governor’s Conference in Kisumu, President Uhuru Kenyatta launched the Lake Basin Economic Blueprint; a development master plan initiated by 10 counties which identifies strategic areas of focus to realise their growth potential.

The blueprint, which has been developed with the support of Deloitte East Africa, identifies seven strategic pillars of growth—agriculture, tourism, health, education, financial services, ICT and infrastructure.

The challenge will be to breathe life into these documented ambitions which are on paper and bring them to fruition.

This can be done through establishment of an agricultural commodities exchange, creation of a lake region tourism circuit, set up of specialty hospitals in each county, creation of educational centres of excellence, establishment of regional banks, creation of a lake-region ring road as well as improving ICT infrastructure.

This ‘road map’ is designed to harness and steer development efforts by leveraging on existing assets in the region, addressing constraints and defining key steps that leaders and citizens of the region can take to realise the shared vision.

It is, therefore, anticipated that the development projects will be spread across the different counties— Bomet, Bungoma, Busia, Homa Bay, Kakamega, Kericho, Kisii, Kisumu, Migori, Nyamira, Siaya, Trans Nzoia, and Vihiga.

Partnerships among these counties and the central government is essential and would create a practical framework through which the county governments’ efforts can be pooled to harness the abundant natural resources, build on existing strengths and address challenges.

These projects will require the county governments to ‘sit-down-and-break-bread’ with the central government and the private sector to ensure that the blueprint becomes reality.

The Constitution authorises the central government to levy or provide exemptions in relation to income tax, value added tax, import and export duty and excise duty while county governments are only allowed to levy property taxes, entertainment taxes and other taxes authorised by statute.

It unlikely that the 13 county governments will have enough from these taxes to finance the projects. They require assistance from the central government which should be in the form of either additional revenue allocation or additional targeted tax incentives aimed at encouraging private sector participation, or both.