Management Magazine
Special Report

Kenya should re-evaluate infrastructure strategy

Kenya’s infrastructural development (both hard and soft) is lagging behind greatly

BY JUSTIN MACHARIA

Infrastructure in the 21st century is now best described as either hard or soft. The most observable and on the lips of the masses is ‘hard’ infrastructure. This refers to the large physical investments necessary for the functioning of a modern economy but not limited to roads, bridges, railways, dams, reservoirs and power lines distribution.

Soft infrastructure are the core services necessary to maintain the health and cultural standards of living and socio-economic productivity of the populace. It includes intangible assets such as communication, the body of rules and regulations governing the various systems, education systems, financing systems, professional competencies, expertise, associations, legal systems and enforcement and adherence to the rule of law. Both soft and hard infrastructure are key in unlocking the economic potential.

In this era, information communication technology has greatly facilitated the interaction and integration of soft infrastructure and hard infrastructure. A good example is Internet broadband over power lines, where electricity power lines carry and transmit Internet broadband. This would scale Internet to every household that has electricity.

Case studies from other countries

In Kenya, with an average GDP growth rate of 5 per cent, the infrastructural development is lagging behind considerably compared to where our former Asian tigers (our peers of the 1970s) are. These nations invested in infrastructure then and economic growth has leap frogged 20 to 30 years later. This has created an enabling platform and environment for SMEs and the private sector. Investments grow and thrive; the gross domestic product grows in a sustainable way and economies manage a positive balance of trade. The economic pay-offs from infrastructural development accrue over a predetermined period depending on specific cross sector expectations and reach.

In Rwanda, hard and soft infrastructure are in tandem. A good example is gender equality aimed at raising the average productivity for both gender with the objective of accelerated growth. The more dependents a household has, the worse off economically it will be. Lack of disposable income eventually translates to diminished development and a surviving population but not thriving on the macro economy scale.

Botswana – though economically stable – has recently taken great interest in renewable energy sources. The country has completed a comprehensive strategy that will attract investors in the wind, solar and biomass renewable energy industries.

The South African Government adopted a National Infrastructure Plan in 2012, The 18 Strategic Integrated Projects (SIPs). The SIPs cover social and economic infrastructure across all nine provinces (with an emphasis on lagging regions). The SIPs include catalytic projects that can fast-track development and growth.

These investments would improve access by South Africans to healthcare facilities, schools, water, sanitation, housing and electricity. Investment in the construction of ports, roads, railway systems, electricity plants, hospitals, schools and dams would contribute to faster economic growth.

Obsolete colonial infrastructure

Unfortunately, Kenya stagnated with obsolete colonial infrastructure until the turn of the 20th century when various strategies were initiated.  First came Vision 2030 then Millennium Development Goals (MDGs) that touched mostly on soft infrastructure, extreme poverty, universal primary education, gender equality and women empowerment, child mortality, maternal health, HIV/AIDS, malaria, environmental sustainability and global partnership for development

The MDGs have now transformed to SDGs, after the realization that global benchmarks and milestones against timelines were important in the global economy. This was found fit since economies do not exist in silos, and collective development and political goodwill are key in development.

However, infrastructure development remains a challenge in Kenya and the region. The heavy financial demands require syndicated loan facilities, government compromise in sovereignty or a change in local balance priorities.

Various levels of success can be achieved if well managed through Public Private Partnerships Models (PPP). In this arrangement, private efficiencies will be infused into delivering and managing public services through concessions with able, willing and ready partners.

The lowest hanging fruits for hard infrastructure are utilities such as transport (Class A road networks, inter-city rapid road public transport, railways, bridges, airports, ports).

In fact, President Uhuru Kenyatta’s Big 4 agenda that harbors affordable housing, manufacturing, universal healthcare and food security is premised on a mix of hard and soft infrastructure. Others are water, energy and solid waste management and these can be achieved through the PPP model and not aid.

Justin Macharia is the Manager, Training & Conference Services at the Kenya Institute of Management.

Email: jmacharia@kim.ac.ke

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