Kenya is ranked among the top five gainers of population growth rate. Kenya’s demographic dividend is third in Africa behind Nigeria (1.9% of a 4.9% GDP growth) and Angola 2% of a 4.3% GDP growth) Kenya’s labour force will nearly triple to reach 48 million by 2050, compared to 18 million in 2014. The large base of economically active people should enable Kenya to sustain an average annual gross domestic product (GDP) growth rate of nearly 4.7% over the 35 years.
Definition: The average annual percent change in the population resulting from a surplus (or deficit) of births over deaths and the balance of migrants entering and leaving a country. The rate may be positive or negative. The growth rate is a factor in determining how great a burden would be imposed on a country by the changing needs of its people for infrastructure (e.g., schools, hospitals, housing, roads), resources (e.g., food, water, electricity), and jobs. Rapid population growth can be seen as threatening by neighboring countries.
If the country is to meet its full economic potential in a sustainable and balanced way so that all regions benefit, it needs the necessary infrastructure to cope with this increased demand.
I have identified three major challenges for infrastructure in Kenya:
- We need to improve delivery, especially for projects outside of the capital, Nairobi. Because of finite public investment opportunities, hard choices must always be made and the economic case is most often a major determining factor,
- The overall level of investment lags behind that of our major global competitors, largely due to a combination of political interference, no clear long term vision, a lack of devolved power and limited local finance options that would enable cities and regions to determine their own infrastructure choices.
- The third challenge facing infrastructure in Kenya is balancing competing investment needs. The current method does not account for the economic contribution or potential of the core cities.
Since 2010, a number of infrastructure projects have been completed in the Kenya across a broad range of sectors: Energy, Agriculture, Sanitation, Floods defenses, ICT, Road and Air. Kenya’s economy grew by an estimated 4.9% in the first quarter of 2015, compared to 4.7% in the same period in 2014, according to Kenya National Bureau of Statistics. Agriculture, infrastructure, financial services and ICT contributed to the growth, but manufacturing and tourism declined. The economy grew by 5.4% in 2014 and the World Bank, in its Kenya Economic Update for March 2015,projected the economy would grow by 6% in 2015, supported by lower energy costs, investment in infrastructure, agriculture, manufacturing and other industries. A stable macroeconomic environment, continued investment in infrastructure, improved business environment, exports and regional integration will help sustain the growth momentum.
In recent history, some notable high profile projects have been delayed or come in vastly over budget, leading to the impression that Kenya is not very good at delivering major infrastructure projects, especially when compared to other countries.
A recent example is the postponement of Konza city, a world-class global technology hub. As a Kenya Vision 2030 flagship project, Konza city was expected to foster the growth of the technology industry in Kenya. Konza city was being developed to be a sustainable, world-class global technology hub and a major economic driver for the nation, with a vibrant mix of businesses, workers, residents, and urban amenities, and is therefore a major setback for the core entire country.
Of course, a project that is behind schedule or over budget can still ultimately be a success, just as much as one that is on time and on budget can be riddled with problems.
For example, the new Thika super highway was one of the longest planning applications this country has witnessed, but was completed in November 2012 on time and on budget. However, despite being A Masterpiece for East Africa and “A National Pride” a catalogue of problems soon arose and the project was initially greeted with a great deal of skepticism.
The understanding of costs, schedules and the processes involved in delivering and project managing major infrastructure has increased significantly in the Kenya, and both the public and private sectors have had greater exposure and experience of managing these types of projects in recent years. A recent study of public-private partnership infrastructure projects showed that only 28% of projects ran more than 5% over schedule, and just 30% were more than 5% over budget, based on the original estimates at the start of the project. That means that over 70% of projects were delivered on time and on budget.
The amount spent on total infrastructure (defined as Water, Rail, Road, Air, Port, Electricity and Communications) as a percentage of GDP has increased steadily since 2000, and even more so in the last decade. Maintaining this level of output over the next five years would help to stimulate economic growth as well as improve the quality of infrastructure.
So is Kenya poor at delivering infrastructure?
Recent history suggests that there have been clear successes, with examples of several projects delivered on time and on budget. Furthermore, some ambitious major projects currently under way, such as The Longonot Gate Resort City & The Makuyu Ridge Golf Resort, have so far avoided any significant setbacks.
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