Daring the horizons

Bound by shared resources, values and interests, the Lake Region Economic Bloc, a conglomeration of 14 neighbouring counties around Lake Victoria and its environs is set to unveil its commercial and development bank by October

110
From left back, Kericho’s Chepkwony, Vihiga’s Otichilo, Kisumu’s Nyong’o second ring and Nandi’s Sang right. Front left, Busia’s Ojaamong, Kakamega’s Oparanyaand Bomet’s Laboso at a recent LREB Summit in Busia

BY BERNARD MATUMBAI

The promulgation of Kenya’s new Constitution in August 2010 epitomised a nation profoundly desirous of a break from tradition; a new beginning in the dispensation of the country’s socio-economic affairs; a renewal of equitable distribution of public resources; a rededication to the redemption of missed opportunities and, more importantly, the definitive path to decentralised governance and service delivery.

A culmination of heightened clamour to end years of brazen mismanagement of public affairs, nay, skewed allocation of resources at the national level, Devolution could not have come at a better time. The period preceding, during and after the proclamation of the new laws all summed up to hope and optimism.

This historic feat, whose highlight was the dawn of devolved system of governance, mirrored Kenyans’ overwhelming determination to bring services closer to the intended consumers – the people themselves.   

Five years down the line, the Devolution experience signifies a largely effective outlay, pockets of documented pitfalls notwithstanding. Health, education, roads and agriculture are notable areas that have recorded transformational improvements, thanks to hundreds of billions of shillings so far allocated to devolved units through a structured revenue allocation framework.

In spite of the many success stories, challenges attributable to relative sizes of the devolved units continue to deny them the benefits that would accrue from economies of scale. Relatively small in nature, many counties have not been able to tap into a robust pool of natural resources, financial opportunities, skilled labour and markets requisite for hastening transformative change.

Be that as it may, one caucus of county leaders in western Kenya has been hogging the limelight for many months now, with its revolutionary initiatives rearing to take devolution a notch higher, literally. The Lake Region Economic Bloc (LREB) is an ambitious initiative of 14 counties in western Kenya that seeks to radically alter the socio-economic standing of its 15-million-strong population.

Sometime in 2014, Kakamega Governor, Wycliffe Oparanya, hosted a number of his counterparts from western Kenya at a local hotel where prospects of a regional economic bloc to drive their development agenda were deliberated on. Such partnership, reckoned proponents of the economic bloc, would propel their growth plans to desired heights, even surpassing envisaged targets.

During the summit held at Golf Hotel, governors present would eventually sanction cooperation of the neighbouring counties around Lake Victoria and its environs. With that declaration, Kisumu, Kakamega, Vihiga, Busia, Bomet, Bungoma, Siaya, Homa Bay, Kericho, Kisii, Trans Nzoia, Nandi, Migori, and Nyamira counties merged to form the membership of the Lake Region Economic Bloc. Three years later, the 14-member bloc is now certain to unveil its commercial and development bank by October.

Primed to address common challenges as well as seizing the many transboundary opportunities dotting the region, this partnership appears determined to help improve livelihoods, if its strategic objective is anything to go by. Founded in its strong desire to leverage economies of scale in the region, the bloc aspires to form synergies towards optimal exploitation of shared natural resources including Lake Victoria.

Perhaps borrowing from the quintessential G-7 (or is it G-8?) economic powerhouse on the world stage, LREB derives its determination to grow the region’s economy as well as transforming lives through its shared natural resources on the one hand, and dynamics of economies of scale on the other.

In a subsequent blueprint commissioned by the governors to provide a framework for economic integration and drive the region’s development agenda, global consulting powerhouse Deloitte East Africa identified seven key pillars whose nexus with the region’s distinct physical, demographic and socio-economic features would yield strategic areas of intervention; pillars that sit well to drive the economic transformation of the region.

Partly hinged on individual County Integrated Development Plans (CIDPs), the blueprint underscores the very essence of strategic connections and mutual benefit among counties, taking cognizance of the region’s dense population distribution, ethnic and cultural diversity, modified equatorial climate personified by long and short rains; physical features that offer a perfect blend for growth and enterprise.

Perhaps to acknowledge the dynamics of regional economic growth, the LREB has its foundation firmly anchored in economic development objectives – both national and county – that it (foundation) is keen to address. The originators of this partnership must have derived such joint strategy from the underlying objectives that they purpose to achieve as outlined in several policy papers.    

Being the engine that drives the Kenyan economy, agriculture prominently features on the socio-economic stratum of the Lake region. Near ‘home’, farming (both subsistence and commercial), livestock keeping and fishing stand out as the foremost agricultural activities.

Sugarcane, tea, pyrethrum, cotton, soya beans, sorghum, bananas, tomatoes are the main crops severally under cultivation in a region blessed with favourable climatic conditions. This is not to mention a semblance of horticultural crops including mangoes, oranges and passion fruits.    

The seven key pillars – including agriculture, education, health, tourism, infrastructure, Information Communication Technology (ICT) and financial services – combine well to form LREB’s focus of its development programmes.

Long under implementation through structured institutional framework, these pillars are further collapsed into three major thematic segments; productive (agriculture and tourism), social (health and education) and the enablers (ICT, infrastructure and financial services).

In designing their deliverables, LREB strategists are banking on agriculture to build on the region’s vast natural resources for food security, with education primed for investing in human capital to help pluck the region out of poverty.

While health is considered a key pillar in the fight against disease, the bloc hopes to harness the region’s tourism attraction features to attract investment and local and foreign visitors; with adequate transport, water and energy being fundamental infrastructural components in creating an interconnected region towards envisaged levels of growth.

And to put the icing on the cake, the financial services element targets best saving, lending and borrowing practices, with the use of modern technology set to support the effective, all-round operations and management.

To meet its economic development objectives, chief executive officer Abala Wanga identifies thematic, cross cutting flagship projects that have been lined up for implementation.

In the productive sectors, an agricultural commodities exchange is in the offing, with the establishment of a regional tourism circuit on the cards. So are the social sectors of education and health, where the economic bloc hopes to establish centres of excellence and specialised health facilities respectively in each county. Mr Wanga says conservation of the Mau and other water catchment areas is another key priority.

Of equal importance, says the CEO, is infrastructure, where the bloc has set its sights on expanding inter county roads and maritime transport for both cargo and humans as well as upgrading existing airports to handle outward-bound cargo. To boost tourism, Wanga says the bloc hopes to upgrade local airstrips to help expand connectivity.

The planned bank, says the CEO, will help fund development projects and enhance financial deepening in the area. In a summit meeting held in Busia last month, the Lake region leadership resolved to buy into an existing financial institution, before progressively acquiring a controlling stake.

“They (Summit) intend to walk this journey together with all the relevant statutory bodies including the Central Bank, Treasury, Controller of Budget and Auditor General among others,” says Mr Wanga, adding the Summit also resolved that each county will contribute Sh200 million as investment towards the acquisition plan. Already, member counties have allocated funds for the project in their 2018/19 budget estimates.

According to the chief executive, the process of identifying the lead advisor is in top gear, with former bank executive Martin Otieno-Oduor primed for the key role. Wanga contends they are optimistic that the bank will be unveiled as scheduled during the inaugural LREB annual investment conference to be held in Bomet later in October.

LREB has over time nurtured strategic partnerships including the Ford Foundation that partly funded the economic blueprint. Further to that, the bloc received Sh18 million grant from the Foundation towards strengthening the initiative on the one hand, and operalisation of the seven areas of intervention. The Lake Basin Development Authority (LBDA) and Agile and Harmonized Assistance for Devolved Institutions (AHADI) are LREB’s other strategic partners.    

The economic blueprint tellingly mirrors a candid insight into the region’s growth opportunities; the expansive but unexploited natural resources and potential to be more precise.

From abundant rainfall and rich volcanic soil in Kisii and Nyamira highlands, to underdeveloped sugar cane and tea farms in Bungoma, Kakamega and Vihiga; tobacco and sugar cane farming in Migori – if not the county’s fishing potential along its Lake Victoria coastline – to rice and cotton farming in Kisumu and Homa Bay, not to mention the two counties’ enormous potential for growing sorghum and sugar cane.

What’s more, the blueprint bemoans the plenty of untapped potential that abounds in the numerous rivers that would ideally present priceless opportunities in the generation of hydroelectric power in Odino, Nyamira, besides the prevalence of water falls at Uriri in Migori. If well harnessed, the bloc hopes to unite the region in the sustainable generation of hydroelectric power to supply to the national grid.

The Lake region economic blueprint, replete with well thought out intervention and growth strategies, agreeably presents a one-stop shop for potential investors. The bloc contends the wide range of knowledge brought out on the region is a sure recipe for attracting funding, creating access to new markets and expanding existing markets.

Doesn’t it worry LREB that county assemblies are yet to anchor this noble initiative into law, three years after the President launched its economic blueprint?

Saying they are moving at a good speed, Mr Wanga reckons they still remain the only bloc to do so. “After the launch of this policy document, the ideas therein could not be implemented outside both legal and institutional frameworks. We therefore embarked on a journey to develop both and carried out a policy gap analysis which identified exactly what we needed to do to put forth a strong legal and institutional framework necessary for the realisation of the set objectives,” he said.

“With the support of partner organisations, we then embarked on the process of developing a legal instrument that would address the gaps by putting in place a sound legal and institutional framework, a process that is sensitive to time and broad consultations,” added Wanga. 

Citing the long electioneering process of 2017, the CEO says they had to extensively consult with various critical stakeholders, including members of the county executives committees (CECs) and county assemblies (MCAs), the private sector, academia, civil society, farmers’ groups and development partners among others.

“We however stand proud to have been the first regional economic bloc to have signed a legal agreement where governors made firm commitments to the bloc, with the signing taking place in Kakamega on March 26 this year,” declare Mr Wanga.

One unique feature of the Lake region initiative is the ethnic, cultural and political diversity transcending the vast area. Perhaps to allay fears of how competing political interests and tendencies could impact on the bloc, Wanga asserts that LREB’s top leadership has “deliberately consigned politics to the back burner,” adding its business is conducted purely on professional basis, leaving little or no room for any other machinations.

Of significant interest, notes Wanga, is that though LREB was founded during the height of political polarisation, governors ably stayed focused on their economic development agenda. At least four of the current Summit members are newly elected governors who have stayed the course of their predecessors.

The Summit, where the governors of the member counties sit to deliberate and approve policy decisions, is the top decision making organ that offers direction for the bloc. Below the Summit is the LREB Council, where the County Secretaries and the CEC members for Finance of the member counties sit.

The Council functions as the technical arm of the Summit and is instrumental in policy and budget reviews before passing them to the Summit for approval. There are also the technical committees, ten of them, based on thematic areas for joint intervention by the fourteen counties known as the pillar committees.

Relevant CEC members serving in dockets corresponding to the pillar committees sit in these committees. The committees are the policy formulation and implementation arms of the bloc. On the other hand, the secretariat, headed by Mr Abala Wanga, the chief executive officer, performs coordination and facilitative roles.

Such all-inclusive nature of doing things, asserts Wanga, informs the trajectory with which the socio-economic discourse pertinent to many stalled projects shall take, with viability being the guiding principle.

On the privatization of State sugar millers that has been long overdue, LREB maintains it is incumbent upon the national government to expedite the gazettement of sugar regulations. Noting Parliament had long approved non-conditional writing off of sugar debts, LREB is now rooting for comprehensive reforms in the sugar sector.