IMF chief salutes Kenya for mega rail and road projects

The International Monetary Fund (IMF) managing director Christine Lagarde has commended Kenya and Cote d’Ivoire for starting regional development projects that are likely to drive economic growth.

Ms Lagarde said high quality infrastructure could be a magnet for foreign investment, economic diversification and employment.

Kenya is involved in the standard gauge railway (SGR) project that is to link Kenya, Uganda, Rwanda and even South Sudan.

The Lamu Port South Sudan Ethiopia (LAPSSET) corridor projects — rail, roads and pipeline — that start at Lamu port are supposed to link with South Sudan, Ethiopia and Uganda.

“Kenya and Côte d’Ivoire are also initiating regional infrastructure projects in electricity, and road and railroad networks,” she said in prepared remarks titled ‘Africa Rising—Building the Future’ to be delivered in Maputo, Mozambique. Such investments would make growth sustainable for a large group of people in Africa, she said.

However, she said, the infrastructure investment needs for the Africa region top Sh8 trillion ($93 billion) annually.

“The investment needs for the region are estimated at about $93 billion annually. In most cases, the investments are large and upfront,” she said.

She said the investments need to be carefully selected, managed and implemented within medium- to long-term budgeting. Another policy priority was to build institutions for improved governance.

“We all know that Africa has tremendous potential — it is home to more than 30 per cent of the world’s mineral reserves. Properly managed, these endowments offer unparalleled opportunity for economic growth and development,” she said.

Valuable lessons

The management of the resources has become a major discussion issue in view of the conflict generated in some of the countries like the DR Congo, South Sudan and Nigeria where violent conflict has left thousands killed.

The IMF boss said Kenya offered a good example in terms of increasing financial access.

In the 2013 FinAccess Survey conducted by UK-funded NGO Financial Deepening Trust and the CBK, it emerged about 75 per cent of Kenya now have access to a formal financial sector service provider.

“Kenya’s experience offers valuable lessons to the rest of the world on how to empower the poor through financial access. ”