Kenya gearing for economic take-off

Dogo Kundu By-pass

Dogo Kundu by-pass phase 2&3, Lamu-Isiolo Highway, Second Runway at JKIA, the phase 2 Standard\gauge Railway, Thwake Dam…all gearing for construction this year and the next. At this rate, Kenya will soon look like a big Construction site. 

 Kenya is gearing for economic take-off “into a newly industrializing middle-income country providing quality life to all its citizens by 2030” says the long-term development strategy, Vision 2030.

 The construction of a string of mega-projects in key sectors of the economy worth billions of US dollars across the country will soon begin. Some are on-going and are nearing completion. Some are Greenfield, others are extensions of existing infrastructure. And some compliment already completed projects, improving their operational efficiency.  The projects are well distributed among such key sectors as transport, energy, ICT, and water. All have one thing in common, they are transformative in nature.

 Transformative infrastructure serves more than just its immediate functions.  They spark off productivity in existing sectors or enable new ones to come on board, shifting the production curve outwards.

For instance, the Second runway at Jomo Kenyatta International airport, will not only increase parking space, and increase the frequency of landings and take-offs from 25 to 45 aircrafts an hour, it will enable exporting sectors to reach a wider market.

Newly paved roads will not only cut the cost of travel and increase speed, they also open up new markets for both local produce and imports, lower, distribution costs and increase the speed of distribution of local products thus lowering consumer prices. They also cut down health costs and improve the balance of payments.

The US$ 620 million Lamu- Isiolo highway, for example, whose construction begins in the second half of this year, will traverse 10 towns in four counties. It is the first indication that Kenya is determined to implement LAPSSET, the US$23 billion project opening Northern Kenya which forms two-thirds of the country’s land mass, for exploitation to contribute to the nation’s wealth creation. Read http://eaers.blogspot.co.ke/2012/07/lapsset-biggest-business-venture-in.html

Both Isiolo and Lamu are also planning to develop resort cities as part of the Lapsset development but they, together with Turkana, are expected to grow into major energy cities. Several energy sources, including Oil and wind power, have been discovered in this region.  Read http://eaers.blogspot.co.ke/2012/04/awaiting-birth-energy-cities-in-kenyas.html

Also in the transport sector, the construction of the second phase of the Standard Gauge Railway from Nairobi- to Naivasha will be completed in September 2019, three months ahead of schedule. This follows the completion of Mombasa –Nairobi section which was completed 18 months ahead of schedule. A Special Economic Zone is also expected to be up and running by the same time in Naivasha.

The completion and lengthening of the SGR, coupled with the completion of investment in the ICD in Nairobi compliments the expansion and deepening of the Mombasa port that is nearing completion.  For more read: http://eaers.blogspot.co.ke/2013/07/kenya-ports-post-panamax-project-ahead.html

 The tender for the construction of the $350 million second runway at the Jomo Kenyatta International airport has been advertised. The runway will increase the movement of aircraft from 25 to 45 per hour and accommodate wide-bodied aircraft.  It will “enable direct intercontinental flights to North America and Australia. This is expected to increase access for Kenyan floricultural produce to new markets,” says the Africa Development Bank.

Ol Karia Geothermal station

 The construction of the runway will support the creation of an estimated 1.5 million jobs across the sectors and expansion of the economy by an additional $22.7 billion a year, the bank concludes. This is 30 percent of the current GDP estimated at US$75 billion.

Investment in green and renewable sources of energy generation increase power supply and lower costs of power. They also increase productivity in the economy as more manual activities are electrified. Among the sources is wind power, the largest of which is Lake Turkana wind project.

The Project is complete and awaiting the completion of Loiyangalan– Suswa 440KV power transmission in August to evacuate power from Lake Turkana Wind power farm. The 330 Mw facility, arguably the largest in Africa, will raise electricity supply by 20 percent of the current generating capacity and begin to lower costs of electricity as more Thermal generators are decommissioned.

 In the water sector, some 57 small and Mega-dams are at various stages of implementation across the country.  All are expected to be operational by the end of the current national development strategy, vision 2030.  Thirty of these will be completed by 2019 says the Water Ministry. “The idea is to increase the volume of water for irrigation and correct the blunders made in previous schemes, including the Galana-Kulalu Food Security Project. Its failure was blamed on inadequate water,” it said in an interview with a local daily.

Silicon savannah

Apart from enabling food production through irrigation, the larger dams will also generate power and introduce more economic activities in the project areas. Among the dams whose construction should start this year is the 27 story- high- 22 kilometres long Thwake Dam in Makueni and Kitui counties border. The project, the largest Multi-purpose dam in east Africa will transform an arid area into a bread basket.

In addition, the dam will support the growth of Konza ICT city and its environs. The city, arguably the first of its kind in Africa is located just 60Km Southwest of Nairobi, at Konza in Makueni country.

Dubbed the silicon Savannah of Africa, Konza ICT City is a greenfield project that will spearhead Africa's entry into the world of ICT-something similar to Silicon Valley in the US.  The city will be served by a high-speed Railway which is already complete. It is also fronted by the Mombasa –Highway which is being expanded to a six-lane expressway.   For more Read: http://eaers.blogspot.co.ke/2012/02/kenya-rearing-to-launch-ict-city.html

Generally, Kenya is gearing for take-off into the higher echelons of Middle-income country thus increasing not only the number

of goods and services available but also increase employment.

The construction of the projects is itself generating employment and increasing incomes across the country and among the drivers of the country’s robust economic growth.

The economy, the most diversified in the East African region has been robust over the last 16 years posting a GDP growth rate of 5 percent a year. In fact, the country has entered the lower ranks of Middle-income

country during this period. The country has become the Financial, Logistics, and ICT hub of the region.  The robust growth creates the right foundation for economic take-off.