Vision 2030 is a wonderful blue print, and if followed as it should be, the country is set to be among the most developed in Africa by 2030. We have discussed some of the economic gains from Vision 2030 in the areas of trade, tourism and manufacturing. In this post we continue with the discussion on economic gains and discuss energy as an enabler and the areas of agriculture, financial services and Information and Communications Technology (ICT).
Energy is one of the infrastructural enablers of Vision 2030 and is a key foundation for this strategy. It will affect the economic, social and political pillars of the development strategy. From Education to Manufacturing, to financial services and ICT, energy is important for the Vision 2030 to be achieved
A coal power project is one of the projects the Government of Kenya is implementing as part of its Vision 2030 to make electricity available for both manufacturing and household needs. Amu Power in Lamu will develop a 981.5 megawatt Coal-fired power plant in Manda Island, Lamu county. Construction is to start on December 7th. It is being built for Kenya’s Ministry of Energy and Petroleum on a build, own, operate and transfer basis for 20 to 25 years. The coal power plant is currently the largest private sector led infrastructure project in East and Central Africa.
The project is expected to bring down the cost of power for domestic and industrial use as it will provide reliable and affordable electricity. This project is part of the Government’s plan to produce 5,000MV of power in 40 months.
The project by Amu Power aims to create at least 1,000 jobs during the construction phase. The construction will contribute greatly to the economy by providing employment, supporting the local supply chain and developing infrastructure like roads and housing. The investment of Ksh. 180 billion includes the power plant, a jetty, and a modern housing complex for at least 300 workers.
Agriculture is the backbone of our economy. Traditionally, cash crops such as tea and coffee have earned the country a lot of foreign exchange. The country has for a long time, however, relied on traditional methods of farming. With new technology coming in, farmers are better equipped to produce more from their farms and livestock.
The Galana-Kalulu Food Security Project is one of the 124 flagship projects that have been identified to be implemented. It is a Kshs. 400 billion project aiming to irrigate 1,000,000 acres of land. The first phase of 10,000 acres of land has been irrigated and the second phase is set to start. The National Irrigation Board has engaged a consortium made up of Israeli and local companies to help set up green house farming. Moreover, Kshs. 3.5 billion has been set aside for the project this financial year.
In September, construction of the first phase of a Kshs. 103 billion fertiliser plant started in Eldoret. Once completed, the cost of fertilisers is set to go down since about 40 percent of the cost of fertiliser is due to freight and port handling charges. Affordable fertiliser will result in low cost of production of farm produce as well as resulting in more yields since more farmers will be able to afford the fertiliser.
The country has one of the best capital markets in the continent. The Nairobi Securities Exchange is the fourth largest in Africa while the retirement benefits sector is well regulated. The insurance and banking sectors are also in a league of their own in Africa.
Mobile banking has ensured that there are more bank accounts in the country than the people in it. Moreover, Kenya has more people with mobile banking accounts than the whole world combined. This has made banking and sending money affordable, cheap and convenient.
The Government has also introduced the M-Akiba bond where anyone with a mobile phone can lend the Government as little as Kshs. 3,000. This is a first in Africa. The first Income-Real Estate Investment Trust (Fahari I-REIT) is set to be listed at the Nairobi Securities Exchange (NSE). The country is just the fourth in Africa to introduce REITs in its securities exchange. There are plans to introduce futures as well.
The Growth Enterprises Market Segment (GEMS) was launched by the NSE two years ago. The GEMS will enable small and medium sized firms to raise substantial and ongoing capital, while benefiting from increased profile and liquidity within a regulatory environment designed specifically to meet their needs. Currently, there are four companies already listed in the segment including Flame Tree Group Holdings which was listed a year ago.
Information and Communications Technology (ICT)
The internet contributed 2.9% of the country’s GDP. This was the second highest in Africa after Senegal with 3.3%. Considering that internet contributed 3.8% of the US GDP, Kenya can be said to be doing well in the sector, and on the way to getting the internet to contribute 10% of the GDP by the year 2025. Internet penetration is as high as 74% when you include mobile data. The average in Africa is at less than 25%.
Fibre network has been laid across the country to improve internet speeds. These include Undersea, Terrestrial and Digital Villages. Moreover, the Government has launched E-Govt where one can access Government services such as company registry, lands registry, immigration, tenders etc through the internet.
The Government also allocated funds in the current budget for the construction of the Kshs. 1.2 Trillion Konza Techno City. The City is to be built in Makueni County in 5,000 acres of land. Once completed, it will host Business Process Outsourcing (BPO) ventures, a convention centre, hotels, international schools, a Science park and, shopping malls.