NAIROBI, Kenya, Nov 28 – President Uhuru Kenyatta has prioritized affordable housing, expanding the manufacturing sector and creating jobs as he starts his second and final term.
Speaking after he was sworn in, President Kenyatta said the focus over the next five years will be to create value and generate jobs.
“Whether it is our vegetables, tea, coffee, oil or gemstones, our policies and actions as a government over the next 5 years will be to ensure that as much value, and as many jobs, as possible are created and retained in Kenya,” said the President.
Part of the new jobs will come from the building and construction industry where the President has promised to create 500,000 new homeowners in five years.
He says his administration will focus on attracting both from private and public sectors patient low-cost capital into the housing sector.
“Policy and administrative reforms which are targeted at lowering the cost of construction and improving the accessibility of low-cost mortgages will be given priority,” he said.
The policy direction comes even as the uptake of home loans dropped for the first time in a decade as banks tightened access to mortgage financing owing to the capping interest rates September 2016.
The number of active mortgage accounts fell by 373 or 1.5 percent to 24,085 at the end of December 2016 – a significant reversal from where it stood in the previous period when the number of loan accounts grew at a compounded annual rate of 12.9 percent between 2006 and 2015.
Kenya had 7,275 mortgage accounts in 2006, which steadily grew to 24,458 in 2015.
The CBK says the lenders reacted to the rate capping law by tightening the credit standards for such loans, while also shunning longer-term loans, where mortgages belong, in favour of short-term credit.
On manufacturing President Kenyatta’s administration aims to raise the sector’s share of Gross Domestic Product to 15 percent from the current 9 percent with the hope of spurring job creation for the youth.
Consequently, Kenyatta has ordered a 50 percent reduction of power tariffs for manufacturers operating between 10 pm to 6 am from December 1, 2017.
“As you know our manufacturing sector is the primary vehicle for the creation of decent jobs. We will build on ongoing efforts, such as the VW and Peugeot motor-vehicle assembly plants; the fertilizer blending factories; and Wrigleys in the confectionery industry. Similarly, we will target the creation of 1,000 small and medium scale enterprises in agro-processing,” he promised.
President Kenyatta also vowed to re-engineer the agricultural sector in a bid to make the country food secure through investing in securing water towers and river ecosystems to harvest and sustainably exploit the potential of water resources.
“Never again should we allow the vagaries of weather to hold us hostage,” he stressed.
The country suffered a severe drought that saw the economy slow down to a five-year low in the second quarter to grow at 5 percent compared to 6.3 percent in the same period last year.
He says steps are underway to utilize idle arable land and facilitate large-scale commercial agriculture to help diversify staples.
“We shall redesign subsidies to the sector to ensure they target improvements in food yields and production quality. We shall provide, together with other actors, key enablers within the farming process that will address distribution, wastage, storage and value-addition of agricultural commodities,” he added.