A
professional colleague handed me the Lake Region Economic Blueprint,
developed on behalf of some counties by a business advisory firm with
support from the Ford Foundation.
It
represents the quest by counties situated close to Lake Victoria to
foster growth and improve the welfare of the people resident in these
counties. Towards the end of its preparation, Kericho, Bomet and Trans
Nzoia applied to join the initial ten comprising Busia, Bungoma, Homa
Bay, Kakamega, Kisii, Kericho, Kisumu, Migori, Nyamira, Siaya and
Vihiga.
While
I am a sceptic of documents and master plans purporting to direct
economic and social development, I find this quest laudable for many
political and economic reasons, primarily because these 10+3 county
governments have initiated a development process independent of the
national government.
While
the plan wisely cites the intention align itself to prescriptions of
Vision 2030, it also signals that county governments, whether alone or
corporately, have ideas that they wish to implement independently.
This
suggests that the wheels of the devolution train are moving ahead and
are unstoppable even if the train can be momentarily delayed at some
stations.
While
these plans will not all be a success, failure is an experience that
central government has had in abundance, the record of which requires
modesty on its part.
Contained
in the blueprint are interesting insights and connections that inspire
and others that repeat clichés of development thinking in Kenya. The
blueprint identifies seven flagship areas that are in turn merged into
three sectors namely productive sectors, enabling sectors and social
sectors.
Agriculture
and tourism are fronted as the productive sectors in which the 10+3
counties will drive growth and improve livelihoods. It is difficult to
argue against the idea that there is need to provide incentives for
investments in tourism in the region.
Coming
to the proposals on agriculture, it is unclear whether a sufficiently
critical lens was applied to the analysis, because the blueprint
maintains the false dichotomy between food crops and cash crops.
A
grand plan ought not to reiterate this false dichotomy because food
products are also amenable to exchange for cash provided surpluses are
generated. The implication is that the errors of agricultural policy
analysis at the national level have informed this plan.
LOOK AGAIN AT SUGARCANE
This
is a material finding because from this false dichotomy comes emphasis
on intensifying production of cotton and sugarcane. For sugarcane, this
is a curious proposal because the plan states that of the 10 counties in
the plan, Kakamega County has the highest poverty head count and is
also the site of highest sugar production.
Just
because sugarcane forms the largest industrial crop in the region
doesn't mean that it also forms the main gateway for value addition and
income growth.
Indeed,
poverty levels in the regions most dependent on sugarcane growing
suggest that the people of these counties are locked in a crop that
correlates highly with poverty.
A
bolder plan consistent with the objectives of welfare enhancement ought
to have cautioned on its continued production, if not suggested the
abandonment of the crop altogether.
Another
diagnosis in the blueprint makes the very intelligent suggestion of the
development of a commodities market. This is informed by the
understanding that agriculture is a major activity of households, and
seeks to capture efficiencies and bulking of these commodities through
efficient trading.
Given
that the region also forms Kenya’s borders to both Tanzania and Uganda,
the commodities market has great potential in a regional bulking
centre. The blueprint mentions in passing the proximity to these
countries but its advantage as a gateway to trade within East African
Community (EAC) could be more prominent.
WHY A REGIONAL BANK ?
In
the area of infrastructure investment, the blueprint stands out for
bold ambition. It seeks to build a ring road connecting the original ten
counties, which is important because it requires a considerable amount
of investment in partnership with the national government.
Here
though, the blueprint shows a dearth of innovation in the financing of
infrastructure by relying on conventional methods such as direct
investments, foreign funding and public private partnerships. Bold ideas
such as a joint county infrastructure bond could be pioneered by the
10+3.
The
blueprint proposes the formation of a regional bank as a solution to
the finding that this region shows low penetration by banking and
financial institutions. Whether this low penetration
is driven by the low level of urbanisation or poor monetisation of
agriculture is unexplored, which raises doubt as to whether establishing
a regional bank is an appropriate policy response.
I
doubt the counties should spend public money to establish a facility
for which no demand has been demonstrated, but which will surely prove
lucrative for advisors during its establishment.
For
their boldness, the 10+3 deserve good luck, but this plan can get them
only 65 per cent of the way there. The ideas contained in it ought to be
improved by working with a bold but smaller and smarter programme.
Kwame
Owino is the Chief executive Officer of the Institute of Economic
Affairs (IEA-Kenya), a public policy think tank based in Nairobi.
Twitter: @IEAKwame
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