Tap institutional partnerships to fire up growth
Friday, February 5th, 2021
What are some steps government and private sector players ought to take to reduce poverty drastically over the next ten years?
Finding an answer to this question will determine whether Kenya becomes a middle-income economy by 2030.
To get to a practical and achievable answer, however, will require government agencies and private sector players to partner to create jobs and economic opportunities for ordinary citizens to advance themselves even as they contribute to Kenya’s grand agenda of growing into an economy that supports a high quality of life.
As with all questions, however, this one has no simple answers. It will require policy makers to burn the midnight oil if they are to unlock the magic that will drive economic growth and power job creation.
Since government cannot employ everyone, one step it can take to accelerate job creation is to create incentives for private investors to set up shop and create value chains that will cascade opportunities to both urban and rural communities alike.
Already, there is a model that holds up a light of hope that this grand ambition is achievable.
Only a few years ago, the plains of Konza were nothing but grasslands teeming with wild animals and the occasional herdsman.
Today, however, a smart technology city is rising from the black cotton soil, offering hope that in three to five years, the emerging “Silicon Savannah” will become one key driver of job creation and expansion of gross domestic product.
For Konza’s full potential to be actualised, however, government agencies such as Konza Technopolis Development Authority will need to attract more local and foreign private investment to provide the vertical infrastructure that will translate to businesses, light industries and technology hubs that will create high quality jobs.
Indeed, it is encouraging that much horizontal infrastructure in the form of roads, power and water systems are already taking shape, but progress can be accelerated if, for instance, the expansive area can be linked to both Nairobi and Mombasa by railway, an air transport system and, of course, the badly needed expansion of the Nairobi-Mombasa highway.
All these require private sector interventions to become a reality “on the ground” as Kenyans are wont to say.
This is where institutions such as the Vision 2030 Delivery Secretariat comes in.
By sitting at the intersection of government agencies involved in powering the country’s economic growth dream, Vision 2030 has the unique capacity to build synergy across government agencies driving the growth agenda and prodding them to be more proactive in engaging private investors.
Although Kenya’s ranking in the Ease of Doing Business index has been improving in recent years, there is still more government agencies ought to do to translate this gain into tangible products that incentivise investors to set up shop.
Among them include easing licensing process, encouraging small businesses to drive innovation and creating hubs through which start-ups can be incubated.
This formula has been tried and tested in countries such as America, leading to exponential growth especially in tech-related sectors.
The listing of these start-ups on stock exchanges has helped them generate working capital and, over time, spreading wealth to ordinary people who invest in them.
In Kenya, there has been a slowdown in listing of new companies at the Nairobi Securities Exchange.
The upshot has been that there is depressed trading in that market and not enough motivation for companies – big and small – to try out listing.
As such, this is one area that requires critical attention to drive investor appetite.
One other ingredient is needed to ensure the mix is successful in both medium and long terms; the participation of counties.
This is a key pillar of ensuring wealth and jobs are devolved while supporting critical economic undertakings from the bottom up.
Konza Technolopolis, again, has led in this direction, driving synergy with Machakos, Kitui and Kajiado counties and seeking grassroots support for the huge undertakings that have so far cost Treasury in excess of Sh7 billion.
This bottom up approach ought to be replicated in other parts of the country to ensure that investors have confidence to put their money into local undertakings which will in turn drive jobs while winning community support for sustenance. —The e writer is a Partner and Head of Content at House of Romford