Senators differ on plans to establish lake region bank

Western Kenya Senators have urged governors in the region to tread carefully with plans to form a development bank, casting further doubts on its launch just two days after it emerged the institution could be delayed.

Four Senators representing counties from the Lake Region Economic Bloc (LREB) appear to be reading from different scripts on the plans to raise Sh2.8 billion to buy a controlling stake in a local bank.

Bomet Senator Christopher Langat, Moses Wetangula (Bungoma), Okong’o Omogeni (Nyamira) and Samson Cherakei (Nandi) are yet to back the push by governors to have their respective county assemblies pass Bills that would legally lead to the establishment of the bloc. Passing of the Bills would set the stage for the governors to release Sh200 million each for the bloc to buy a stake in one of the 46 licensed banks in Kenya whose identity is a closely kept secret among the county chiefs.

The Lake Region Economic Bloc hired consultancy Deloitte to identify a bank and advise the governors on the matter.

“One thing must be made clear from the onset, that as leaders we are fully behind LREB as a marketing platform, especially for farm produce from the region as there is strength in numbers and we shall cut off brokers and enable farmers to access the markets directly,” said Dr Langat at the venue of the regional bloc’s first economic four-day conference in Bomet from next Sunday.

“Taxpayers’ money should not be spent on such an ambitious plan without proper public participation meetings being conducted.”

Other senators present were Prof Margaret Kamar (Uasin Gishu) and Dr Michael Mbito (Trans Nzoia).

“There is a need for more public participation meetings to be held before a common position is taken on this matter since it involves millions of taxpayers’ money,” said Mr Omogeni. “The grey areas need to be addressed as a matter of urgency and the push to release the money should not be done in a rush. I am yet to meet with MCAs to discuss and arrive at a consensus on the matter.”

However, Mr Wetang’ula supported the governors.

“Setting up the bank would make it easier for development partners including the World Bank and African Development Bank to channel grants and loans through it as opposed to going through other commercial banks, which rake in millions through administrative fees and other charges,” he said.

“I have held a series of meetings with MCAs from Bungoma and governor Wycliffe Wangamati on this matter. We are in agreement that we should give it full backing as leaders as the residents stand to benefit from it.”

Prof Kamar said there was a need for leaders to subject all development matters to public participation to ensure taxpayers’ money is prudently spent.

“The North Region Economic Bloc started off very well but it has been hit by a myriad of challenges in the past few months, which we hope to surmount in days to come,” she said.

Mr Cherarkei separately urged Nandi MCAs to reject the LREB Bill. “We should pump the money into development projects, which have a direct impact on development at the grassroots level instead of setting up a bank that has no bearing on development in our county,” he said.

Two out of 14 assemblies have ratified the Bill while 12 were last week given another six weeks to follow suit.