For equity and fairness, we must invest in areas that have so far lagged behind

In his commentary titled “Country should remain focused on growing the cake before splitting it” (DN, December 10, Wolfgang Fengler, the World Bank’s Lead Economist for Kenya, has waded into a subject that he is singularly ill-equipped to advise on: devolution.

Fengler observes that governments that have sought to direct the location of economic activity fail. The examples he cites — Germany, Indonesia, Brazil, Nigeria, Tanzania — are valid.

There are probably as many examples that are successful. But that is besides the point. The advice is totally misplaced.

Governments use tax incentives or subsidies to encourage firms to locate in particular places. They may also use administrative fiat, such as relocating capital cities as in Nigeria and Tanzania.

Concluding, Fengler asserts: “To address spatial imbalances in lagging regions while maintaining services where Kenya’s growth is generated, Kenya has no other choice but to remain focused on growing the cake before splitting it.”

We need to unpack this statement. “(A) ddressing spatial imbalances while maintaining services where Kenya’s growth is generated, suggests the lagging places contribute less to growth than some other better-served ones.

I am not aware of any data on contribution of different parts of the country to growth. If such data did exist, they would not support what Fengler posits to be the economic geography of Kenya.

Primary livestock production (excluding dairy), virtually all of it from the neglected pastoralist northern Kenya, contributes just over five per cent of Kenya’s GDP.

Five per cent of the GDP is about the same as the contribution of manufacturing excluding primary agro-processing (of tea, coffee and sugarcane). This makes pastoralists arguably the most productive people in Kenya.

Similarly, most of Kenya’s tourism potential is in the underserved regions of the country.

The argument also displays a remarkable misrepresentation of the distributional grievances that have informed devolution. Let me illustrate.

In 2007, public health facilities in Kiambu with a catchment of 815,000 people had 21 doctors, including six specialists, as well as a dentist and a pharmacist.

Tana River with a population of 227,000, did not have a single doctor. The most senior medical professional was a clinical officer of whom there were four, supported by five registered nurses, 38 community nurses and two laboratory technicians.

This distribution is even more inequitable because, Kiambu people being wealthier, are also served by many private hospitals, which are close to Nairobi, and Tana River is a malaria zone.

How can such inequities be justified? By what criteria are the Kenyans of Kiambu more deserving of health services than Kenyans of Tana River?

As a matter of fact, they have been — by reasoning not unlike Fengler’s, in Sessional Paper No 10 of 1965:

“One of the problems is to decide how much priority we should give in investing in less-developed provinces.

“To make the economy as a whole grow as fast as possible, development money should be invested where it will yield the largest increase in net output.