NAIROBI, October 27 – The country needs to invest Sh360 billion to develop various infrastructure projects before 2012, President Mwai Kibaki has said.
Speaking during the launch of the first infrastructure bond conference, the President said this translates to about Sh72 billion every financial year prompting the need for the private sector to play an active role in infrastructure development.
“It is clear that the financing requirements for this program are enormous and cannot be met by the government alone. We will soon be launching regulations for Public Private Partnerships that will provide a framework for the business community to invest in public projects,” he said.
He added that rehabilitating and modernising the infrastructure would greatly reduce the cost of doing business, attract private investment and increase productivity which would enable the country to realise the high growth targets set out in the economic blueprint Vision 2030.
The Head of State also explained that the government would in the next five years prioritise the construction and upgrading of 64,500 kilometres of roads at a cost of Sh186 billion.
“It is clear that we will not be able to achieve sustained rapid growth without investing heavily in infrastructure. Therefore, we will need to scale up our investments in this area,” he said.
President Kibaki called on the officials from the various government’s agencies attending the two-day conference to learn how they can tap the capital markets to fund infrastructure projects.
“We expect those who provide critical infrastructure services to obtain first-hand knowledge and best practice ideas on how the capital markets financing process works,” he said.
At the same time, the President urged the best performing parastatals to issue their own infrastructure bonds to raise resources instead of always relying on the government for support. He however recommended that the organizations should first learn from the best international practices.
He pledged to support public sector agencies that were still struggling to improve their efficiency, management capacities and return to profitability.