Kenya plans more big projects amid surging cost fears


Ongoing construction of the Nairobi Expressway along Uhuru Highway. PHOTO | DIANA NGILA | NMG

Kenya will continue spending massively on infrastructure projects in the five years to 2027, in what will keep the country as a big construction site for the next decade.

In its new medium-term plan, the Treasury says it will prioritise spending to upgrade the nation’s rail system, road network and building of new power plants despite mounting concerns of the high costs of the projects that in the past fuelled a controversial debt binge by the government.

“The fourth medium-term plan will prioritise increased investments in improving infrastructure so as to lower the cost of doing business which in turn improves national competitiveness and productivity,” says a concept note presented yesterday by Treasury teams at the start of the budget-making process.

“It will fast track expansion and rehabilitation of national and county roads, model Jomo Kenyatta International Airport into an aviation hub, expansion and modernization of airports and rehabilitation of airstrips.”

Economists under the plan are also calling for the continued modernisation of sea and inland ports and the expansion of rehabilitation of railway infrastructure to facilitate seamless connectivity.

The plan will also accelerate the transition to clean energy, promote energy efficiency and shift to auctions as a successor to the feed-in-tariffs policy to address high electricity tariffs.

Kenya under President Uhuru Kenyatta has borrowed a cumulative Sh7.7 trillion to date, most of it since the Jubilee government took power in 2013, to fund ambitious infrastructure projects.

Speaking during the launch of the budget-making process, Treasury Cabinet Secretary Ukur Yatani said Kenya’s economic activity is picking up after an unprecedented decline in the last two years due to the coronavirus pandemic and is expected to rebound helped by improved performance in agriculture, recovery in the tourism industry and construction.

“We’ve come out stronger and better. We can feel and see and touch that lives are getting back to normal,” Mr Yatani said.

“We registered a GDP growth of 9.9 percent in the third quarter (2021), the second quarter was much better at 10.1 percent and overall for this financial year we are looking at a growth of possibly eight percent or even more. This is quite significant. It portends better jobs for our people and lives getting back to normal,” added Yatani.

Kenya’s economy was hit hard in 2020 by the effects of restrictions aimed at curbing the spread of Covid-19, particularly tourism and other main sectors.

[email protected]