Kenya must increase its investment in infrastructure development to reduce the cost of doing business and enhance its productivity.
According to a report issued on Wednesday by Britam Asset Managers, despite having some of the fastest growing economies in the world, East African economies remained among the least competitive globally due to poor infrastructure.
Kenya has had to rely on foreign aid and commercial borrowing domestically, abroad and from bilateral partners to fund its projects with China recently becoming a financier of key energy and transport projects, said Britam CEO, Kenneth Kaniu.
Kaniu said that it was imperative for Kenya to diversify financing sources and give a larger role to the private sector through Private-Public Partnerships (PPP), Foreign Direct Investment (FDI) flows and more local private financing.
While releasing the report, Kaniu said that there was an East African Master Plan to connect six cities and build pipelines at a total cost of Sh3.9 trillion (US$38 billion) and this transport master plan would connect the cities of Mombasa, Nairobi, Kigali, Kampala and Juba by 2018 at a cost in excess of Sh30 trillion (US$ 30 billion).
In addition, three oil pipelines will be constructed between Kenya, South Sudan, Ethiopia, Uganda and Tanzania at an estimated cost of Sh832 billion (US$ 8 billion), said Kaniu.
Railway transport is the second most important mode of transport after road and is critical for long distance freight along the main transport corridors.
To plug this infrastructure gap, it is estimated that East Africa needs over Shs.10.4 trillion in funding (US$100 billion) over the next four years, said Kaniu.
Currently, the East African Community has 58 active Private-Public Partnerships projects worth Shs.761 billion (US$7.32 billion).
Source: Kenya News Agency