Kenya to triple strategic fuel reserves

December 5, 2008
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, NAIROBI, Kenya – The Kenyan government will soon come up with the provision for strategic fuel and gas reserves which can last between 40 and 90 days.

This is part of the commitments announced by Prime Minister Raila Odinga on Tuesday that are aimed at resolving the bottlenecks in doing business and enhancing Kenya’s competitiveness in the global arena.

“In addition, the Energy and Finance Ministries will review other charges on the power bill with the aim of addressing the high cost of power,” said Mr Odinga in a joint communiqué with the members of the Kenya Private Sector Alliance (KEPSA).

He said commitments, referred to as “Quick Wins’ and which were agreed upon during the Second Round Table meeting with the business community would be implemented within a period of three months.

Energy Permanent Secretary Patrick Nyoike said his Ministry officials and their Finance counterparts would meet to work out the modalities of how to go about it and determine how to fund the package.

“The number is dynamic so with rising demand the number might be 90 days but the volumes will be very large. We will be looking into ways and means of financing that cost because it will be very high,” the PS revealed.

He however could not give estimates on how much the cost would amount too. Last year, the country consumed 3.3 million metric tonnes of fuel and related products, and Mr Nyoike disclosed that the reserves were likely to be a quarter of the projected consumption.

Other ‘Quick Wins’ that were highlighted included the harmonisation and coordination of the Small and Medium Enterprises (SMEs) whose activities would also be centralised and put under the Industrialisation Ministry.

The youth would also benefit upon the implementation of a pledge to reserve 10 percent of government procurement for the youth-owned SMEs. Mr Odinga said they would compile a database of such enterprises to facilitate the move.

“The government will also boost the Youth Enterprise Development Fund through signing of leveraging agreements with three commercial banks,” he added.

Mr Odinga announced that the government would speedily gazette circular 12 and 13 which clearly spell out the fees and charges that businesses are required to pay.

“The government is also committed to address the issue of harassment of businesses by law enforcement agents particularly the police and the Council askaris,” he added amid wild cheers from the private sector representatives at the press briefing.

To address the concerns about the many levies, taxes and charges which hurt businesses, the Premier directed the Public/Private Sector Committee on Modernisation and Harmonisation of the tax regime to meet and make recommendations for immediate implementation.

He also revealed that the government would adopt proposals for a modern building code that have been developed in consultation with stakeholders and promised that country would also have a new (building) code by the first quarter of next year.

“The government will also review and harmonise the draft Wildlife Bill with the Wildlife Policy in a bid to ensure that there’s a comprehensive and modern law addressing wildlife issues,” he pledged.

Mr Odinga added that the government had committed itself to settle debts amounting to Sh1.2 billion owed to the suppliers of the Kenya Medical Supplies Agencies.

He challenged the private sector to identify measures that could be implemented to improve the business climate.

While concluding his remarks, the Prime Minister called all the concerned ministries to ‘move with speed’ and implement the recommendations without delay and directed them to submit a progress report in three months.

“We will therefore use the next round table meeting to review the implementation progress of the commitments made by the government from the two foras and to receive the proposed measures from the private sector” he added.

During the meeting, the Premier also launched the Kenya Competitiveness Report which points out why the country is lagging behind on the competitive front and highlights what measures need to be taken to improve the situation.

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