Kenya Vision 2030 A Globally Competitive and Prosperous Kenya

Kenya Vision 2030 A Globally Competitive and Prosperous Kenya

October 2007

THE NATIONAL ANTHEM

Swahili Ee Mungu nguvu yetu Ilete baraka kwetu Haki iwe ngao na mlinzi Natukae na undugu Amani na uhuru Raha tupate na ustawi Amkeni ndugu zetu Tufanye sote bidii Nasi tujitoe kwa nguvu Nchi yetu ya Kenya Tunayoipenda Tuwe tayari kuilinda Natujenge taifa letu Ee, ndio wajibu wetu Kenya istahili heshima Tuungane mikono Pamoja kazini Kila siku tuwe na shukrani

English O God of all creation Bless this our land and nation Justice be our shield and defender May we dwell in unity Peace and liberty Plenty be found within our borders Let one and all arise With hearts both strong and true Service be our earnest endeavour And our homeland of Kenya Heritage of splendour Firm may we stand to defend Let all with one accord In common bond united Build this our nation together And the glory of Kenya The fruit of our labour Fill every heart with thanksgiving

FOREWORD

The unveiling of Kenya Vision 2030 marks an important milestone in our country's development as it comes soon after the successful implementation of the "Economic Recovery Strategy for Wealth and Employment Creation" (ERS) over the period 2003 to-date. The Kenya economy has now recovered from the slow growth rate of 0.6 percent in 2002 to a projected growth of over 7 percent in 2007. Indeed, the last five years represent the best phase of sustained economic growth in our country in all sectors of our economy notably; agriculture, tourism, manufacturing, wholesale and retail trade and telecommunications as well as the social Sectors.

The vision will be implemented through five year medium-term rolling plans, starting with the first one which will cover the period 2008-2012. Thus, the performance of the government should in future be gauged on the basis of these medium term benchmarks. The Vision also aims at creating a cohesive, equitable and just society based on democratic principles and issue-based politics grounded on our rich and diverse cultures and traditions.

In year 2005, the Government accepted a recommendation by the National Economic and Social Council (NESC) to prepare a long-term vision to guide our development up to the year 2030. This was done in recognition of the fact that the goal of economic recovery, as outlined in the ERS, had been largely accomplished. This long-term national planning strategy is anchored on three main pillars namely; economic, social and political, under which flagship projects and other priority programmes will be implemented during the next 23 years.

Right from the beginning, it was found imperative to involve a broad cross-section of the Kenyan population in the formulation of Vision 2030, in order to ensure national ownership of the vision. A team of local and international experts was therefore commissioned to work closely with both the public service and the private sectors in preparing the vision document. The consultative process was launched in October 2006, after which numerous open forums were held in all the eight provinces, attracting keen interest and enthusiastic participation. The preliminary findings were submitted to the Cabinet in May 2007. Thereafter, the findings were subjected to further country-wide deliberations through public consultative forums in July, August and October 2007.

Since year 2003 to-date, income per capita has been rising steadily thereby giving Kenya a real chance of escaping from poverty after a long period of decline in real personal earnings. For instance, poverty levels fell from 56% in 2002 to 46% in 2006. This healthy trend is set to continue in coming years. However, we must sustain this momentum and consolidate the gains that we have achieved so far towards the realization of the Millenium Development Goals (MDGs) and elimination of poverty.

As we are all aware, the MDGs are internationally accepted standards for measuring progress towards poverty alleviation. It is indeed encouraging to note that Kenya is on track on a number of these Goals especially in the education and health sectors but we need to accelerate our pace in meeting the remaining ones. As we pursue these noble developmental goals and the Vision 2030 targets through internally generated resources, Kenya will continue to benefit from remittances by the Kenyan Diaspora, increased foreign direct investments, more portfolio inflows and cooperation from our development partners.

The Kenya Vision 2030 is a vehicle for accelerating transformation of our country into a rapidly industrializing middle-income nation by the year 2030. The journey to 2030 will require; sacrifice, hard work, self-discipline and determination. I am confident that Kenyans will meet these challenges, in order to make our country globally competitive and prosperous, where every person will enjoy a high quality of life.

Let us all individually and collectively commit ourselves to the realization of Kenya Vision 2030 targets and continue working together in order to build a just, equitable and prosperous Nation.

Mwai Kibaki, C.G.H, MP President and Commander-in Chief of the Armed Forces of the Republic of Kenya

TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................... vii Chapter 1: INTRODUCTION................................................................................................... 1

1.1. Background ..............................................................Error! Bookmark not defined. 1.2. Macroeconomic/ ..................................................................................................... 11 Chapter 2: FOUNDATIONS FOR SOCIO-ECONOMIC TRANSFORMATION ................ 12 2.1. Infrastructure........................................................................................................... 12 2.2. Science, technology and innovation ....................................................................... 20 2.3. Land reform ............................................................................................................ 21 2.4. Human resource development................................................................................. 23 2.5. Security ................................................................................................................... 25 2.6. Public service .......................................................................................................... 27 Chapter 3: ECONOMIC PILLAR .......................................................................................... 30 3.1. Overview................................................................................................................. 30 3.2. Tourism ................................................................................................................... 30 3.3. Agriculture .............................................................................................................. 43 3.4. Wholesale and Retail Trade .................................................................................... 62 3.5. Manufacturing......................................................................................................... 69 3.6. Business Process Outsourcing/Offshoring.............................................................. 77 3.7. Financial Services ................................................................................................... 87 Chapter 4: SOCIAL PILLAR ................................................................................................. 93 4.1. Overview................................................................................................................. 93 4.2. Education and Training........................................................................................... 93 4.3. Health Care Delivery ............................................................................................ 104 4.4. Water and Sanitation............................................................................................. 115 4.5. Environmental Management................................................................................. 124 4.6. Gender, Youth and Vulnerable Groups ................................................................ 133 4.7. Housing and Urbanisation..................................................................................... 143 4.8. Social Equity and Poverty Reduction ................................................................... 153 Chapter 5: POLITICAL PILLAR ......................................................................................... 158 5.1. Overview............................................................................................................... 158 5.2. Guiding principles................................................................................................. 159 DELIVERING THE KENYAN VISION ............................................................................. 162

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LIST OF FIGURES Figure 1.1: Trend in economic growth rate .............................Error! Bookmark not defined. Figure 1.2: Broad-based economic growth..............................Error! Bookmark not defined. Figure 3.2.1: Formal tourism employment and earnings per employee ................................. 31 Figure 3.2.2: Hotel ratings in Kenya and South Africa .......................................................... 32 Figure 3.2.3: Tourism goals for Vision 2030.......................................................................... 34 Figure 3.2.4: Growth in tourist product contribution to tourism GDP: 2006 ? 2012 ............. 35 Figure 3.2.5: Demand in bed space and potential of new developments at the coast............ 36 Figure 3.2.6: Features of proposed resort cities on the Coast................................................. 37 Figure 3.2.7: Comparative potential growth for business tourism.......................................... 39 Figure 3.2.9: Kenya's marketing budget compared to long-haul destinations ....................... 41 Figure 3.2.10: Overview of proposed niche products initiative.............................................. 42 Figure 3.3.1: Agriculture's contribution to the economy (2001 and 2005) ............................ 43 Figure 3.3.2: Distribution of coffee output and productivity levels by farm size................... 44 Figure 3.3.3: Yield and value per hectare of key crops and livestock (2001-2005) ............... 45 Figure 3.3.4: Productivity levels of coffee (2005).................................................................. 46 Figure 3.3.5: Land use in Kenya by function: 2006 ............................................................... 47 Figure 3.3.6: Potential land for additional crop production.................................................... 48 Figure 3.3.7: Broad land classification in Kenya by region ................................................... 49 Figure 3.3.8: Kenya's horticultural exports by market destination ........................................ 50 Figure 3.3.9: The role of value addition in the world tea market ........................................... 51 Figure 3.3.10: Agriculture vision and strategies..................................................................... 52 Figure 3.3.11: Agricultural Reforms....................................................................................... 53 Figure 3.3.12: KARI's expenditure pattern (2005)................................................................. 54 Figure 3.3.13: Farm households per extension officer by province ....................................... 55 Figure 3.3.14: Development versus recurrent expenditures at the KIA and EPC (2006)....... 56 Figure 3.3.15: Fertilizer application levels in Kenyan smallholder farms.............................. 57 Figure 3.3.16: Three-phase fertilizer cost-reduction strategy................................................. 57 Figure 3.3.17: Agriculture in ASAL areas.............................................................................. 59 Figure 3.3.18: Flagship projects for the agriculture sector over the next 5 years................... 60 Figure 3.3.19: Key initiatives for the agriculture sector over the next 5 years....................... 61 Figure 3.4.1: Structure of Kenya's wholesale and retail sector .............................................. 63 Figure 3.4.2: Informality distortions in wholesale and retail trade......................................... 64 Figure 3.4.3: Selected supply chain constraints in the informal retail trade........................... 65 Figure 3.5.1: Manufacturing sub-sectors ................................................................................ 70 Figure 3.5.2: Share of Kenya's manufactured exports in the regional market ................ Error!

Bookmark not defined. Figure 3.5.3: Competitiveness of manufacturing sectors in selected countries...................... 72 Figure 3.5.4: The vision for the manufacturing sector and strategic thrusts........................... 74 Figure 3.5.5: Possible regional industrial and manufacturing clusters ................................... 75 Figure 3.5.6: Expected location of SME parks ....................................................................... 76 Figure 3.5.7: Flagship projects and key initiatives for the period 2008-2012 ........................ 76 Figure 3.6.1: Size and trend of the global BPO market .......................................................... 77 Figure 3.6.2: Global demand for BPO services ...................................................................... 78 Figure 3.6. 3: Telecommunications costs for selected countries ............................................ 79 Figure 3.6.4: BPO talent pool for selected countries .............................................................. 80 Figure 3.6.5: BPO-specific incentives in selected countries................................................... 81 Figure 3.6.6: Major global BPO players................................................................................. 82

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