Raila: Govt committed to fighting graft

February 9, 2009

, NAIROBI, Kenya, Feb 9 – This is a speech delivered by Prime Minister Raila Odinga at a consultative meeting with donors in Nairobi.

It is my great pleasure and honor to once again co-chair the KCG meeting together with His Excellency, Bo Jensen, Ambassador of Denmark.

As you are all aware, we as a country are facing a very serious food crisis, so serious that President Kibaki a few weeks ago had to declare it a National Disaster.  In this context, I would like to share with you the actions that President Kibaki and I are taking to overcome this crisis and to put this Nation on the right course to achieve food security for all of our people.   Our desire is to move firmly toward the goals of Vision 2030 and in particular to conquer hunger in this country.

The weather has been extremely harsh for Kenya over the last several years. I do not need to dwell on this point because you know very well its severe impact on our food production, livestock, and daily lives of millions of Kenyans.

What I wish to emphasise here is that the current food crisis is not due entirely to adverse weather.

Over the last decade, government policies failed to optimise Kenya’s vast potential on food production. The efforts of the Government to make quality seeds and affordable fertilisers available to our peasant farmers were weak.  Irrigation to make arid and semi-arid lands arable has not reached far. Interventions by the National Cereals and Produce Board have lacked consistency and efficiency. 

The post-election crisis of early 2008 worsened the food shortage situation. There was general disruption of the food production chain as farmers got dislocated.  The increase in the international prices for fertiliser complicated food production even more as farmers could not afford this important input.  

I cannot fail to comment on corruption because I am convinced it has in a significant way discouraged genuine private investment, both in agriculture and in industries.  This vice has led to siphoning off public funds that Kenyans entrusted the Government to make best use for improving their welfare, including the assistance to the under-privileged and to build infrastructure.

This vice must be eliminated from our country.  In this regard, I assure you that I remain fully and firmly committed to transforming our country to make it free of corruption.  President Kibaki and myself are committed to liberate this Great Nation of ours from corruption.
True to this commitment, the Government has directed that a forensic audit of all financial transactions of National Cereals and Produce Board (NCPB) and its handling of imported grains since July 1, 2008, be conducted.

The audit will be conducted by a reputable international firm and its findings will be made public.  Those found responsible of wrong doings, if any, will be held to account irrespective of their status.   

In addition, the management of buying and selling grains by the NCPB and its storage facilities will be outsourced to an international firm through an open bidding process. To avoid any disruptions in securing the supply of maize during this crisis period, the outsourcing of the management of NCPB will commence from September 2009.  

I am of course aware of serious allegations in other areas as well. I assure you the Government is firmly acting on them and we will inform all Kenyans the results of the ongoing investigations when such investigations are completed. Where evidence is established, the Government will take remedial actions as appropriate.

President Kibaki and I are determined to extending help to each and all of Kenyans who require and deserve food relief, including in particular the 10 million people who now face hunger and risks of starvation.

Recently, I visited Gujarat, India, to learn from their social and economic policies. Among a number of policy matters I found very instructive is the extensive and elaborate scheme of food subsidy offered in Gujarat.

Kenya is in need of a well targeted food subsidy scheme that is efficient and accountable, that minimises opportunities for abuse, and that reaches all Kenyans who require and deserve help. I have, therefore, formed a special task force to design a food subsidy scheme that is most suitable for Kenya, and to put it in operation by the end of this year.

The task force will be led by my office, and include representatives of concerned ministries who have relevant expertise. I have also asked the World Bank to join the task force to help us with the knowledge of best practices around the globe.

President Kibaki and I are keenly aware that fellow Kenyans in the drought stricken areas and many, many others – particularly the youth – do not have the means to earn income to buy food and other basic items essential to protect the minimum standard of living.

The Government is, therefore, launching the “KAZI KWA VIJANA” Programme, which is modeled after the New Deal that President Roosevelt pushed forward to bring the United States of America out of the Great Depression. 

Under the “KAZI KWA VIJANA” programme, the Government will roll out numerous small, labor intensive projects firstly, to secure water supply for farming and livestock in time for the next crop seasons, secondly to repair side roads and drainages in urban areas, and thirdly, to upgrade basic facilities in slum areas to raise the quality of life of those living in our slum areas. The Government will call on the people living in the areas to take part in those projects, and will pay them for their work.

The Ministry of Youth will spearhead this effort, in collaboration with the Ministries of Roads, Local Government, Water, Livestock, Environment and Public Works. We will also deploy our Military and the National Youth Service in this regard. We have invited the United Kingdom, Japan, China, the World Bank and the African Development Bank to help us implement this Programme. Other donor agencies and NGOs are most welcome to join us.  

The Government liberalised maize market during the 1990’s. Since then, its policy has always been not to control prices at which maize is bought and sold, with the government retaining a role to intervene to help stabilise the market during the period of crisis or abnormal price upsurge/downswings. This policy still holds today and will be adhered to in the future.

I recognise that there may have been some elements of arbitrariness in the application of this policy for the management of the current crisis. It may have left some room for discretion and abuse. 
Therefore, an alternative set of measures to stabilise the maize market is under consideration. I expect that a proposal will be submitted to Cabinet for consideration in its sitting during the week beginning on February 16, 2009. This proposal aims to vigorously facilitate the importation of maize by the private sector, with a view to have a large volume of imported maize in order to fully stabilise the maize market within a few weeks. Under this proposal, farmers, traders and millers will be free to buy and sell maize at any price agreeable to both parties.

The subsidy programme to ensure that maize flour could be sold in retail stores at a price below the cost of import will be continued for limited period. However, the subsidy will be administered in a most transparent and efficient manner.      

The global economy is in crisis, and no country in the world is left untouched. Kenya is no exception. Our foreign exchange earnings are on a decline at a time when we must expend a large amount of foreign exchange to pay for emergency imports of maize.  This development has forced us to draw down our official foreign exchange reserves, leading to a decline in official foreign exchange reserves to 2.8 months of import cover.     

That not withstanding let me assure my fellow Kenyans and you that we will keep our foreign exchange market – and the value of the Kenya Shilling – stable. Last week, I met the First Deputy Managing Director of the IMF in Davos, and requested a soft loan under its Exogenous Shock Facility. In response to our request, an IMF mission is coming to Nairobi in 10 days’ time. I expect speedy and favourable conclusion of our negotiations with the IMF.

We have also been in touch with the World Bank and a few bilateral donors. However, let me not pre-judge or get ahead of your discussions in the meeting today.

The Kenya Government will do all it can within its power to contain the food crisis. We are re-prioritising our government expenditures to overcome the food crisis and to care for the poorest and the under-privileged.  We as servants of the people must also sacrifice some of the luxuries we may be enjoying.  In this context, to compliment the efforts of the National Exchequer, all Members of Parliament and public servants earning over Sh100,000  are requested to contribute 10 percent of their salary in the month of March 2009 to assist with the purchase of food for the poor during this crisis.

But we can not do it alone. The abnormal weather in Kenya, a cause of the current crisis, is a consequence of global warming, for which all of us – particularly those of the industrial world – share the responsibility. I look to you to work with us as our development partners to help us overcome the current crisis and in building a prosperous Kenya in which hunger will be a thing of the past.

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