Kenya seeks Sh300b donor backing

October 24, 2011
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, NAIROBI, Kenya, Oct 24 – The government is appealing for donor support to help raise approximately Sh300 billion it requires for infrastructure development over the next three years.

Finance Minister Uhuru Kenyatta said on Monday that the availability of these funds would enable the country to achieve the required level of infrastructure that can in turn drive economic growth.

“I therefore remain hopeful that our friends will agree to double their support to us to enable us achieve the planned investment in infrastructure and in the social sector,” he said during a meeting with Arab Development Partners in Nairobi.

The roundtable conference is in its fifth year and has been a platform through which the government has cemented its ties with the Arab countries.

In 2009, the partners pledged loans and grants amounting to $1 billion to be released for three years to 2012 and which were targeted at sectors such as agriculture, water, infrastructure and education and the health industries.

This support has come in handy for the country Kenyatta said, adding that its impact had particularly been felt in the social sector. This coupled with the progress being made in the implementation of the new Constitution is expected to augur well for the country’s economy.

Notwithstanding the current shocks such as high inflationary pressures, soaring interest rates and a weak shilling that the country is experiencing, the minister said the government is optimistic of closing the year within the five percent Gross Domestic Product (GDP) range.

“We have realigned government expenditures and stand ready to take further fiscal measures to ensure macroeconomic stability. It is worth noting that the economic fundamentals remain solid and we are expecting a real GDP growth of around 5.5 percent this year,” Kenyatta affirmed.

Although this is a downward adjustment from the initial projected six percent, it will just be a basis point lower than the impressive 5.6 percent that was registered in 2010.

The government has in the meantime made it clear that this growth will be achieved on the back of infrastructure which has over the years seen increased budget allocation of up to Sh100 billion per annum.

Roads Permanent Secretary Eng Michael Kamau said they expect a similar amount going forward to facilitate the completion of infrastructure projects across the country.

Some of those projects include the construction of the Southern bypass which is a dual-carriage way expected to cut across Langata Road into Kikuyu Township and link the Nairobi-Nakuru highway at Rironi.

Although the project has been delayed for nearly two years due to the financing wrangles, Eng Kamau said the Chinese government has agreed to come on board at a cost of Sh14 billion.

“They (Chinese government) sent the finance agreement, the Attorney General (Prof Githu Muigai) looked at it, made some slight comments and we have sent it back to China and then we will sign the agreement before the work can commence,” he disclosed.

All the other projects were progressing well he said while adding that the ministry’s absorption capacity of funds allocated to it had greatly improved.

“In 2006, we started at an absorption rate of 50 percent of the total budget; we were at 82 percent in 2009 and this year we are hoping to get to about 90 percent,” he indicated.

The extent to which the development budgets are utilised has been one of the country’s biggest problems and has been blamed on procurement challenges, capacity constraints and delays in the disbursement of donor money.

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