Monday, November 19, 2012

Kenya may not be there yet, but it is making giant strides despite the odds

By SEAMUS GRIMES

It’s good to be back in sunny Kenya where the scope for solar initiatives must be great.

Here at Strathmore University, where I am based for a few weeks, there are many incubation units seeking to tackle the considerable challenges the country faces.

There are obvious signs of progress since my last visit in 2009, with shiny new office blocks appearing downtown, but also in suburban locations.

Also, locals are happy about the gradually improving infrastructure, particularly the new Chinese-built expressway.

Alongside this progress, considerable challenges remain both for the country and this city, which tends to attract high levels of rural in-migration of people who end up living in slums.

The city is obviously a work in progress, with many new roads under construction. As I was driven from the airport on my arrival, my sense of shock at the difficult circumstances of many local people walking along the ‘highway’ was re-awakened.

The huge pedestrian population, who suffer the worst effects of the high levels of pollution coming from many vehicles that are clearly past their best years of service, are among those who often live in the slums, and seek to find some form of employment wherever it might be available.

Everywhere one runs into major traffic jams, and the locals joke that people tend to either turn up half an hour before a meeting (having factored in traffic problems), or half an hour late due to the congestion.

The increased levels of investment and construction of real estate and new infrastructure is quite encouraging. This is likely to taper off to some extent with the approaching election next year, as potential investors take stock.

The key consideration of everybody here is that the election will be peaceful, and much work is going on to ensure that this happens. In addition to the growing levels of foreign multinational investment, among the major actors in the investment landscape are the Chinese, the local Indian population, and to some extent, Somalis.

The growing involvement of Chinese investment in Africa is quite evident in Nairobi in real estate, highway construction and also major companies such as the well-known telecommunications giant, Huawei.

Having recently spoken to professionals involved in the Strathmore MBA programme, I was interested to learn how impressed they were with the Chinese model, which is so pragmatic and also based on affordability.

The Indian population in Kenya plays a very significant role in the economy. For the most part, however, the community has remained somewhat apart from total involvement in the political environment.

Somali investment remains the strangest component of all, since it appears to be connected with the piracy that has dogged the East African coastline for years. As the authorities come to grips with this serious problem, the flow of funding appears to decline.

So the present picture is one of growing optimism on the one hand and continued enormous challenges to create an economic dynamic, which can provide jobs and shift the economy away from a significant informal sector to one where more people are paying taxes.

It can take many years for infrastructure projects to be completed once they are started, with the necessary funding for such projects sometimes disappearing into black holes, or as the locals will have it, ‘being eaten’.

The long waiting period of the impoverished for a better life drives some people into a range of criminal activities, which can have considerable negative effects in terms of petty corruption by officials in positions of power.

All cars have registration numbers engraved on their windows, in the expectation that they could be stolen at some stage. This overall lack of security gives rise to a very dynamic security sector.

This security issue has grown in significance also because of the threat of terrorism in recent years. Kenya, like other parts of Africa, must make progress on these security issues, if sectors like tourism are to thrive.

But this challenge is also related to the deep-seated inequality that characterises society.

Mr Grimes is a Visiting Professor at Strathmore University.

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