Kenya has an annual investment deficit of $90 billion, Devolution and Planning Principal Secretary Wilson Irungu Nyakera has noted, affirming that this hinders the economic take off of the country.
The PS said there is increased infrastructural investments in the country to lay a firm foundation for economic activity to provide the provide sector with impetus to create jobs. He asserted that there are 34 international institutions who have headquarters here in Kenya, indicating an interest in Kenya as a regional hub which the country needs to take great interest to grow exponentially.
According to the PS, 34 per cent of the cost of goods is transport yet in the developed countries it is 4 per cent, fueling the government’s appetite to invest in infrastructure projects. Raw materials take the bulk of the transport costs while poor road network across the country also contribute. This poor connectivity is aiding agricultural produce failing to reach markets and chocking potential exports.
Kenyas biggest infrastructure project yet, the Standard Guage Railway is estimated to cost $10 billion from Mombasa to Malaba.
The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor which is a regional flagship project intended to provide transport and logistics infrastructure aimed at creating seamless connectivity between the Eastern African Countries of Kenya, Ethiopia and South Sudan estimated cost is $25 billion. The project connects a population of 160 million people in the three countries. According to the LAPSSET report published in June 2016, it is intended to operate as an Economic Corridor with the objective of providing multiple Eastern African nations access to a large scale economic trade system thereby promoting socio-economic development in the region.
Thika Superhighway, a 40 kilometer road network cost the tax payers sh27 billion.
“If we want to grow, we also have to invest in cheaper sources of energy. The developed world used coal yet today we cannot use it because of environment issues is not sustainable,” he said. He was emphatic that the environmental concerns raised by activists is not about emissions because the government is working on recycling it under the clean coal initiative but on the mangrove forest that will be cut down.
Coal costs are sh5.5 cents per kilowatt hour compared to sh8 cents per kilowatt hour for wind and sh12 cents per kilowatt hour for solar. As at February this year, electricity cost was sh2.85 per kilowatt hour.
Kenya is looking to triple its energy generating capacity to 5,000 megawatts by 2030. He was emphatic that the project will proceed as planned.
According to KPMG’s economic snapshot of 2016, agriculture remains a cornerstone of the Kenyan economy, fulfilling a salient role as an employer and as provider of livelihoods through subsistence farming. The sector contributes around 30.1 per cent to GDP and is the primary generator of foreign currency in the economy. Formal economic production is dominated by the services
sector, with a well-developed retail sector, relatively sophisticated and growing telecommunications and financial services sectors, and a developed tourism sector. In turn, the industrial sector is driven by strong public investment in infrastructure, and the country also has one of the strongest manufacturing sectors in sub-Saharan Africa (SSA).
Potentially lucrative opportunities for investment in the services sector include tourism, banking, telecommunications, wholesale and retail trade, and business process outsourcing. This service industry today employs the majority of Kenyans at 66 per cent, followed by industry at 20 percent and agriculture is at 14 per cent.
“Let us look at infrastructure as an enabler,” he asserted.