CONSULTATIVE GROUP MEETING

Transcription

1 CONSULTATIVE GROUP MEETING KENYA PRIVATE SECTOR ALLIANCE POSITION PAPER FOR THE CONSULTATIVE GROUP MEETING EXECUTIVE SUMMARY This is the Kenya Private Sector Alliance (KEPSA) Position Paper that provides the private sector road map for economic recovery. Despite the fact that Kenya s economy has been under performing over the past decade, there is renewed government commitment to turn the economy round. The KEPSA Position Paper summarizes the private sector priorities for investment and forms the for negotiation for resource mobilization and allocation by Government, investors and partners. It is the culmination of a participatory analytical process involving private sector stakeholders, civil society, and Government and developme nt partners. The United Nations Development Programme Kenya Country Office sponsored the project within the context of the Rome Declaration on Harmonization of donor s and recipient country s practices 1 and the provisions of the Consultative Group commitment to Kenya KENYA PRIVATE SECTOR ALLIANCE Kenya Private Sector Alliance (KEPSA) is the umbrella organization for over 200 private sector organizations in Kenya. KEPSA, which was formed early in 2003 and, works through 27 nationally confederated business and professional organizations in all sectors of the economy. Since its formation, KEPSA leadership and membership organizations are busy working to realize the following unifying objectives: To enable the private sector to have a strong impact on socio-economic through collective effort; To create a harmonized approach to cross-sectoral issues; To strengthen and rejuvenate the private sector as the engine of economic growth and employment and wealth creation; To ensure the formulation of policies that encourage both domestic and foreign investment, and pursue regional, continental and international economic opportunities; To promote values of innovation, hard work, goodwill and collective responsibility towards the fulfillment of the country s destiny. KEPSA enjoys tremendous goodwill from the present Government, which recognizes it as providing the institutional for a Government-Private Sector Partnership. 1 UN Country Team-Governance Thematic Paper Consultative Group Monitoring PRSP Statement

2 KEPSA fully endorses the current Government s policy of pursuing a private sector led economic growth strategy with the Government providing an enabling environment for globally competitive Kenyan enterprises THE PREPARATION OF KEPSA POSITION PAPER ON ECONOMIC RECOVERY KEPSA with assistance from United Nations Development Programme (Kenya Country Office) embarked on developing and refining a common position on economic recovery for the country soon after the Government launched its Kenya Economic Recovery Strategy Paper in June 2003 and announced the hosting of the National Investment Conference in November 20 th and 21 st KEPSA and UNDP formed a task force embedded at KEPSA Secretariat to realize this objective. The task force organized eleven mini-workshops and a combined conference to assist the private sector to develop a road map for economic recovery. The main purpose of the mini-workshop was to re-activate and mobilize private sector stakeholders in each sector to prepare and effectively participate during the National Investment Conference. The specific objectives for the mini-conferences were to: Critique the Kenya s Economic Recovery Strategy Paper; Identify investment opportunities; Recommend strategies for realizing suggested investment opportunities and Suggest incentives for realizing selected strategies. Lead discussants in each sector prepared teaser studies and presented these papers during the mini-conferences. The participants, mainly drawn from the stakeholders from each sector as well as civil society, government and partners, freely debated and reached consensus on priority concerns for each sector. The recommendations were collated and synthesized by sector chairmen and lead discussants for the combined conference. The outputs from the eleven mini conferences were presented and freely debated at the combined conference. Participants at the conference discussed and reached consensus on the priority issues, which form the KEPSA Position Paper on economic recovery. The Position Paper identifies the investment opportunities in each sector, strategies and incentives for realizing economic growth in Kenya PRIORITY AREAS OF INVESTMENT KEPSA identifies the following areas as critical areas for investment through public private partnership: 2

3 Infrastructure : This includes the rehabilitation of road network, rehabilitation of informal settlements, construction of low and medium housing schemes, rehabilitation of rail network, of shipping and port facilities, and expansion of air transport, and investment in the energy sector particularly in rural electrification, petroleum energy and solar power among others. Revamping of the agricultural sector involving investments in value addition in agriculture, horticulture, livestock, fish and the manufacture of cheap but reliable farm inputs among others. the information communication and technology (ICT) sector through the of ICT infrastructure and manufacturing of ICT consumables as well as investment in fixed and mobile telephony. Revamping of the tourism sector involving the rehabilitation of collapsed hotels and infrastructure as well as developing facilities for the domestic tourism. The rehabilitation of myriad collapsed industries in all sectors of the economy including sugar, tea, coffee, pyrethrum, cotton, cashew nut and light metal manufacturing factories. The urgent improvement of health care delivery system through the rehabilitation of public health facilities, construction of new public and private hospitals, manufacture of selected generic drugs, hospital equipments and materials. The rehabilitation of public education and facilities to produce skilled manpower needed for economic growth and. For more details on the priorities check the appendix CROSS CUTTING ISSUES FOR ECONOMIC RECOVERY Insecurity of persons and property; HIV / AIDS pandemic high prevalence rate; Poor governance (including high corruption levels, less than optimal quality of leadership & ma nagerial practices) Limited access to credit Unfavorable business environment: Over regulation and unfair competition; High taxation levels and multiplicity of taxes. High interest rates. Environment degradation Unstable exchange rates. KEPSA is urging that: The Government guarantee security of persons and property to encourage investments; The Government to urgently enhance good governance and enforce accountability in both public service and the corporate world to ensure integrity in the management of public and private affairs; 3

4 The Government to urgently adopt a participatory approach to as a cornerstone for greater public-private partnership for economic recovery; The Government to urgently double efforts for resource mobilization and efficient utilization of scarce financial resources through civil service and budgetary reforms; The Government to adopt the sector wide approach to policy formulations to ensure optimal participation and feedback by all stakeholders before enactment of policies The Government should allocate more resources for research and and encourage cross cutting linkages between industry and of higher learning to encourage greater entrepreneurship and innovation The Government to urgently but transparently privatize state owned corporations as a show of commitment to get out of doing business and concentrate on its facilitative role The Government must get its macro-economic management right to spur savings and investments and The Government must create enabling environment to allow partners to assist in the economic recovery MONITORING AND EVALUATION (M&E) KEPSA is a member of the National Steering Committee that will coordinate and synergize the activities of M&E Working Group 3. As an umbrella body for private sector, KEPSA provides important institutional for acting as a watchdog for efficient resource utilization by various sectors and thematic groups. Each year, KEPSA will bring out a Country Progress Report on the Government and private sector. The Progress report will act as monitoring and evaluation tool for gauging the performance of both the government and private sector. 3 Consultative Group Monitoring PRSP Statement

5 APPENDIX: KEPSA MATRIX OF PRIORITIES SECTOR INFRASTRUCTURE [Roads] [Housing] [Transport] [Energy] [Water & Sanitation] INVESTMENT OPPORTUNITY IN ORDER OR PRIORITY 63,000 km road network Upgrading and of unclassified roads Upgrading of slum and informal settlements (150,000 units a year) Construction of new low and middle income housing schemes secondary mortgage schemes rail network shipping facilities air transport Rural electrification Petroleum Solar power Liquid gas Construction of dams and water 5 STRATEGY 63,000 km road network Upgrading of unclassified roads Upgrading of informal settlements new housing schemes to cater for low and medium class Urgent legal reforms integrated transport policy Strong Strong central action plan Allow private sector participation in rural electrification Transparency in privatization of energy sector Strong energy policy INCENTIVE Prioritize rehabilitation of stalled road projects Prioritize of new roads with high economic potential Reduce tax on building materials Remove rent controls Security guarantee Tax relief Reduce cost of energy Remove bureaucracy partnerships

6 dams and water recycling new water schemes Manufacture of water and sanitation facilities water storage water recycling Review of legal and Tax relief Strong policy and [Land] [Planning and building] [Environment] Property Lending money market Survey and cartography Management of local authorities Construction of buildings in public Tree forestry Waste management Plastic recycling Land policy and Establish efficient land information systems Land policy and Adequate financial allocation to local authorities metropolitan plans for local authorities Strong legal and End human and wildlife conflict Provide basic infrastructure Remove bureaucracy on land adjudication and Tax reduction on land Policy allowing private sector participation in local authorities Tax relief for waste management Enforcement of environmental impact assessment laws AGRICULTURE Agri-value addition Horticulture Fish sugar factories cotton industry 6 Strong policy leadership and value addition More financial allocation for farm inputs and extension programmes Strengthen research and Tax moratorium for investments in ASAL areas Tax relief for value addition Government divestiture from KCC and KMC Aggressive marketing of COMESA

7 TOURISM collapsed hotels facilities for domestic tourism infrastru cture within tourism areas INFORMATION COMMUNICATION broadband AND TECHNOLOGY backbone Manufacturing of telecommunicati on consumables Mobile and fixed line telephony TRADE & INDUSTRY collapsed factories Agri-value addition Cotton and textile factories Mineral exploration Energy recycling [Opportunities across all SMALL & MEDIUM ENTERPRISES sectors] Export of value added agricultural products Light metal manufacturing and fabrication Soap manufacturing Solar panel manufacturing Honey 7 Strengthen marketing of agricultural commodities Aggressive destination marketing Review of visa requirements ment of domestic tourism national ICT champion of SMEs in ICT particularly setting up of incubators ICT infrastructure Strong policy and Improve access to infrastructure such as telecommunicati on and energy Improve access to regional and international markets Increase access to cheap credit Strong legal and SME council SME bank Security guarantees Increase government funding for destination marketing Tax waivers Low tariff charges Establishment of national ICT champion Development of broadband backbone Review of Telkom monopoly Reduce cost of energy Reduction of taxes Apply tariff on subsidized value addition imports Establishment of SME secretariat Establishment of SME bank Establishment of SME council Reduction of tax

8 Handicraft and curios EDUCATION teacher colleges building in primary, secondary and universities Manufacture of education aid and materials HEALTH Construction of more private health private health insurance as an adjunct to NSHIF Manufacture of generic drugs, hospital equipments and dressings Health supplies and pharmacy Clear policy and Expansion of free education to secondary level Clear policy on teacher education Strong policy leadership and Harmonization of public and private health construction of more private health formation health consortium for the financing of health care delivery Give free land for of education Zero rating of taxes for education and materials Provide inservice training for all teachers Reduction of VAT/tax on health products Review of health rebate system Improve private hospital access to NSHIF Access to cheap credit FINANCIAL SERVICES GOVERNANCE SECURITY AND Unit trust Non-banking Pension schemes Manufacture of security systems Capacity building for government and corporate organizations 8 Urgent enactment of micro-finance act Infrastructure telecommunicati on improvement NPA resolution mechanisms public sector reforms Covenant for corporate good governance code of ethics for corporate Tax relief for pensions Complete liberalization of pensions Stable macroeconomic climate and political stability Sack and jail corrupt civil servants and corporate leaders Complete constitutional review on time

9 sector Declaration of corporate social responsibility MACRO ECONOMIC FRAMEWORK Direct foreign investment Exports good governance and public sector reform Tourism diversification Regional integration Investment code Infrastructure rehabilitation ICT Tight monetary and fiscal policy Improve agriculture Public sector reform Budgetary reforms Political stability Tight monetary and fiscal management More allocation for productive sectors while rehabilitating service sectors For more details please contact: The Chief Executive Kenya Private Sector Alliance P.O. Box 3556 Nairobi Tel: or Fax: or 9