President Uhuru By Jacob Ngetich Kenyatta President Uhuru Kenyatta has put up a spirited effort to implement the ‘Big Four’ agenda to shape his legacy, as questions emerge as to whether it is attainable. The Jubilee administration hopes to come up with legislation and strategies to finance the five-year plan aimed at turning around the country’s economy through manufacturing, affordable housing, healthcare and food security.
ALSO READ: Cabinet approves Africa free trade treaty for ratification The government is expecting in excess of Sh80 billion by June this year from the manufacturing sector and according to the plan, by that time, there should also be at least 86,000 jobs created.
The government seems to have come up with the formula aimed at seeing the country’s manufacturing sector grow by 11 per cent in the next five years. According to the plan, by the time the country will be holding its next general election in 2022, manufacturing should be contributing 20 per cent of the country’s Gross Domestic Product (GDP). The current contribution of nine per cent staggers around Sh600 billion on a GDP of Sh7 trillion as at 2016.
Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Text the word 'NEWS' to 22840 Kenya Association of Manufacturers chief executive Phyllis Wakiaga says the manufacturing sector, for example, has a goal to increase its contribution to the GDP from the current 9.2 per cent to 15 per cent by 2022. “In order to do this with the entire economy growing simultaneously it means that the sector should plan to grow at over 20 per cent or more per year. Now this is not an impossible feat to achieve, however it is quite ambitious given that the current growth rate per year is not even close to double digits,” she says.
The highest registered growth rate was in 2010 at 5.8 per cent while the lowest was in 2012 at 0.6 per cent. Last year, the average growth rate was 2.2 per cent. “So while it is not inconceivable to want to grow the industry at this rate, it means a re-calibration of business-as-usual and a deliberate campaign to foster political will, as well as cohesion among policy-making agencies and institutions of government towards this goal,” she said.
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At least eight areas have been singled out by the government as the major drivers of this growth.
These include Information and Communication Technology (ICT), fish processing, textile, agro processing, and leather and construction materials. Critics of the Sh98 billion plan claim this might not take place given the cost of production and lack of materials locally. Cotu Secretary General Francis Atwoli tells the Saturday Standard that the rising cost of fuel and the current economy is likely to jeopardise the plan. Most companies have also reduced the number of employees in a bid to remain in the market.
“More than 100,000 employees in the private sector lost their jobs between August and November last year. How will it be possible to create jobs when such a big number of people are laid off within a period of four months?” Atwoli said. Out of the 86,000 jobs to be created by June, 10 are in apparel, 50,000 cotton, 20,000 agro-processing and 2,000 in construction.
AMBITIOUS Describing the plan as ambitious, economist Kwame Owino says for it to be attained, manufacturing probably needs to grow faster than any other sector. ALSO READ: NASA-Jubilee talks coming: Nyong’o “And that has never happened. But we are not saying it cannot happen. We just need more investment,” says Owino. He says there is need to expand other sectors, such as agro processing, so that this goal can be made a reality.
“Right now our economy is growing by an average of five per cent and manufacturing contributes a tenth. We actually need to boost this to may be a fifth,” he says. He says it narrows down to the actual plan the government has in mind on which exact areas it seeks to invest in, such as industrial parks or special economic zones. On housing, the government expects to build 500,000 social housing units and 800,000 affordable units by 2023 at a cost of Sh2.6 trillion. Affordable housing may be one of the easiest catchphrases to throw around for a population that has inhibitive mortgage rates and some of the widest housing deficits despite a construction boom. On average this puts the cost of each unit at Sh2.6 million each, which will be constructed by private equity firms who will presumably charge a markup. This means that on average, a unit will be sold at over Sh3 million despite the government offering free land to the investors, a cost that is out of reach for a majority of Kenyans. As President Kenyatta set his sights on his priority to ensure all Kenyans have access to affordable housing he must come up with more concrete plans to make really cheap houses and very fast.
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To achieve his targets, the President needs to see private partners put up an estimated 200,000 units each year, yet in the first quarter, there are no concrete projects online. The task is even harder given that it will not be financed on the budget as members of the National Assembly Budget and Appropriation Committee noted that the agenda is not well-articulated in the Budget Policy Statement (BPS) and the focus appears to be on targets and outputs only.
While the decision to go into public-private partnership is commendable given the burden on the country’s resources, PPP projects have not necessarily taken off due to legal and structural challenges. In fact, last week, the State Department of Housing & Urban Development cancelled the tender for hiring an expert to advise on a private-public procurement model for setting up 10,000 houses in Nairobi and Mombasa.
BIG TASK AHEAD The government’s initial plans are to build 1,600 units on Park Road, 1,800 units at Shauri Moyo, 5,000 units at Starehe Housing Project and 750 units at Muguga Greens and Hobley in Mombasa. Government has a big task ahead since Kenya has not adopted technology in terms of land ownership for registration and transfer of titles. The fact that there is no clear regulation on who is entitled to affordable housing is still a matter of great concern.
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Kenya has in the past witnessed the rich purchasing homes intended of the poor and renting them out. Housing Principal Secretary Charles Mwaura says it is possible to achieve this pillar with the government already setting up mechanisms for ensuring this. “We will have qualifying criteria on who will have access to the houses by ensuring one household for one family. Our plan will be devoid of any human inference,” he says. Healthcare is expensive and any Kenyan can relate to having had to participate in a harambee to take a sick person to India or to get specialised healthcare. The government has been trying to change this to get more people to plan for the eventuality that they will fall sick by getting insurance.
The National Hospital Insurance Fund (NHIF) has been taking monthly payments pegged at about Sh150 for individuals earning up to Sh5,999, Sh1,700 for those earning Sh100,000 and above or Sh500 for those in self-employment.
However, only 7.5 million people are registered with NHIF, with 16.5 million beneficiaries out of which only four million are consistent in their monthly contributions. To get all Kenyans on board, the President said major policy and administrative reforms would be undertaken in the medical sector. In an interview with the Saturday Standard,
Health Cabinet Secretary Sicily Kariuki said the ministry would develop programmes designed to expand access to healthcare and reduce the number of people impoverished by paying for the healthcare they need. Ms Kariuki said to make this possible, the ministry has commenced a rigorous plan to register all Kenyans under the state social health insurance platform by 2020.
She said the plan is to register 8.5 million people with NHIF by the end of 2018 and another 25 million in the next one year and continue to raise the numbers to 40 million by 2020. Even as the national and county governments embark on this noble quest, health remains a devolved function and there has been no laid out plan on working with counties to ensure affordable healthcare. The wisdom of this is in the fact that all counties do not have homogeneous health challenges.
For instance, while maternal mortality rate may be the biggest problem for Mandera County, that is not the same for Kiambu. Counties like Makueni have started making affordable healthcare for all on their own by registering all residents to their insurance programme. The county has registered every household for Sh500 per month to meet their deficit in ensuring affordable health for all. SUBDIVISION OF ARABLE LAND On agriculture, the government has put on the pipeline a number of legislation towards improving the sector as it seeks to ensure the Big Four agenda is successful.
Among the legislation that will soon be tabled in Parliament is one that will make soil liming mandatory, capping on the cost of leasing land to attract private and foreign investors and halt further subdivision of arable land. In his final term in office, President Kenyatta promised to ensure not only 100 per cent food sustainability, but a surplus of about 10 million bags. Currently, the country produces 40 million bags of maize annually against a demand of 52 million, but the agenda targets 67.3 million bags by 2022, against a demand of 57 million.
Other radical legislation include laws to stimulate water harvesting, on irrigated land for each constituency, enforcement of agriculture regulations – crops (tea, sugar, potatoes) and caged fish farming.
The National Assembly and Senate will also be required to pass laws on the enforcement of the Fisheries Management and Development Act and the elimination of multiple levies and introduction of Warehouse Receipt System Bill 2016.
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