Home East Africa Economic blocs set to change the economic fortunes of Kenyan counties

Economic blocs set to change the economic fortunes of Kenyan counties

by Ben Oduor

By Ben Oduor

The formation of regional economic blocs has emerged as the latest avenue by county governments to transform the fortunes of the residents in a cost-effective manner. There are currently six regional economic blocs representing 35 of the total 47 counties in the country, according to the Council of Governors books.

The blocs include the Lake Region Economic Bloc (LREB), North Rift Economic Bloc (NOREB), Frontier Counties Development Council (FCDC), South Eastern Kenya Economic Bloc (SEKEB), Mt. Kenya and Aberdares, and the Jumuiya ya Kaunti Za Pwani (Commonwealth of Coast Counties).

The various blocs have already hit the road running by forming the Secretariats that will spearhead the operationalization of the development agenda.

Lake Region Economic Bloc (LREB), headquartered in Kisumu County, is for instance working on a legal instrument that will pave the wave for the establishment of a regional bank by the end of this year, followed by key projects such as a trade centreand an Agricultural Commodity Exchange, among others.

In an exclusive interview with the East African Business Times, Abala Wanga, the LREB Head of Secretariat said the bloc’s founding governors have expressed goodwill in the project and the onus is now with the Members of County Assemblies to endorse the County Assembly Caucus, a legal instrument that will represent their views in the bloc.

County Assembly Caucus, Wanga revealed, is an important instrument that would give County Assemblies the power to perform functions such as approving any proposed activity before it is undertaken and to pass laws essential for the development of the bloc.

The legal instrument, he explained, would only take effect once a third of the 13 county assemblies have ratified it, in a move that will set the bloc in motion to establish a regional bank by October 2018.

Regional Bank

“After critically analyzing the county, regional partners saw huge opportunities in the financial services sector and gave us (the devolved unit)a clean bill of health to establishment the regional bank. The bank will be financed by each of the bloc’s 13 county governments, who will contribute Sh200million, totaling to sh2.1billion,” Wanga explains.

Once the bank is operational, member counties will lead the formation of Sacco Societies and Groups that will be eligible for financing. The bank will also finance key development projects in the bloc, which comprises counties from Nyanza, Western and a section of Rift Valley.

The counties are; Kisumu, Siaya, Homa Bay, Nyamira, Kisii, Migori, Kakamega, Bungoma, Busia, Trans Nzoia, Vihiga, Nandi, Bomet and Kericho, constituting approximately 14million people.

LREB members crafted seven strategic intervention including agriculture and tourism under productive sectors; education and health under social sectors and ICT;and financial services and infrastructure under enablers.

LREB blueprint has set various key flagship projects under the seven strategic areas of intervention. The bloc intends to establish an Agricultural Commodities Exchange under the pillar of agriculture, and to create centres of excellence in each of the 13 counties.

The bloc also intends to create a Lake Region tourism circuit under the tourism pillar; specialist hospitals in each county under health and a Lake Region ring road around Lake Victoria to boost transport. The construction of the 450 km ring road will cost Ksh41.6billion. It will run from Busia to Migori, with the project being spearheaded by the Kenya National Highways Authority and financed by World Bank.

“We also intend to upgrade Kisumu International Airport to match international standards and upgrade airstrips in each county to facilitate air transport. We will also be constructing a 10,000-seater capacity trade centre to facilitate trade across the region,” Wanga said.

Industrial hubs and special Economic Zones

Similar infrastructural projects are underway in neigbouring counties’ economic blocs.In July 2017, the County Government of Uasin Gishu played host to a Ksh200billion industrial hub known as AEZ Pearl River Park.

The industrial hub,operated by the Chinese firm Guangdong New South Group and the African Economic Zones (AEZ), a local firm owned by tycoon David Langat, was launched on an expansive 700-acre piece of land in Plateau Eldoret, Uasin Gishu County, which hosts the headquarters of North Rift Economic Bloc (NOREB).

Once the three phases of the project are complete, the industrial park is expected to attract more than 40 Chinese companies which will set businesses in the zone; a move projected to employ 40,000 Kenyans.

The hub is to host several industries including; agro-processors, ICT hubs, energy sector companies, engineering and construction firms and chemical industries, with the first phase of the project comprising agro-processing, energy, machinery, electronics, ICT, engineering and pharmaceuticals industries.

The second and third phases will host hotels, shopping malls, local and international schools, hospitals and about 4,000 residential units, among other projects.

“Of great importance is the road infrastructure linking the NOREB region to the Northern Corridor member countries, the expansion of the Eldoret Airport to accommodate cargo and the expansion of the SGR to the Malaba border,” said UasinGishu Governor, Jackson Mandago during the launch.

In what would be one of the game changers to the economy of the Commonwealth of Coast Counties, the Chinese government has agreed to issue Taita Taveta County- one of the six counties that form the coastal bloc- a grant of US$500million for the construction of an Export Processing Zone (EPZ).

The zone will host a steel processing plant as well as agricultural and livestock value addition factories in some 500 acre piece of land that will be provided by the county government. 300 acres from the piece of land will be used to set up the steel plant while 200 acres will be allocated to the EPZ.

“The industries will improve our economy, create jobs for our people and consequently improve their livelihoods. Industrial development is the way to go,” the county’s governor, Granton Samboja, said.

In the North Eastern front, eight counties that operate under the umbrella of Frontier Counties Development Council (FCDC) are looking to benefit from a joint donor fund that will support key infrastructural projects, health and energy.

This is after twelve envoys visited Mandera County, as part of their three-day tour of the North Eastern region, to assess the challenges and opportunities for development partnership.

“Ksh54million grant (from World Bank) would be channeled towards supporting capacity of Mandera County through strategic training,” Abdu Muwonge, World Bank Task Team leader for Kenya, Devolution Support Programme said.

Mandera County is currently putting up three modern hospitals poised to improve access to quality healthcare services in the region.

On the other hand, 10 County Governments that form the Mt. Kenya and Aberdares Economic Bloc, as well as three that constitute the South Eastern Kenya Economic Bloc are working on blueprints that are projected to spur regional economic development.

Mt. Kenya governors have, for instance, rolled out an ambitious Sh100billion blueprint to finance their economic bloc, which has a population of 17million people.

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