According to Apex Africa Capital Limited, the government’s Big Four Agenda will give Kenya a middle-income status. However, financing the projects under this initiative is a matter of great concern.
With the country’s public debt level rising towards 60 per cent of GDP, financing the Big Four will require diligence.
In its report, Apex Africa says the government will use a grant of $2 billion from the United Nations and a PPP model to fund the Agenda.
“Though exciting at face value, the PPP financing model has come under pressure in the European markets, arguing that the long-term costs to the public outweigh the debt service burden that would arise if they were financed through debt,” the report reads in part.
The Big Four Agenda is targeting the manufacturing sector, universal healthcare, affordable housing, and food security.
The Manufacturing Agenda
The government aims to increase the manufacturing sector’s contribution to GDP from 8.4 per cent in 2017 to 15.0 per cent in 2022. However, some of the inhibitors according to Apex Africa Capital Limited include the high costs for SMEs to set up businesses, the high level of counterfeit goods in the country, high electricity costs, and poorly developed capital markets.
On the other hand, the opportunity for this agenda includes the African Continental Free Trade Agreement which will open up a larger market for local manufacturers.
The agenda will also revive the cotton and leather industries which will be a positive step for the country.
The Universal Healthcare Agenda
The Kenyan government wants to increase health care access from the current 38 per cent to 100 per cent by 2022. The challenges to this goal include low insurance penetration, brain drain, increased dependency on public sector health services, and inadequate data in the health sector.
Nevertheless, the agenda can be achieved through blockchain technology and big data while the agenda will bring solutions such as medical tourism, incentives for medical professionals, and increased data collection in healthcare.
The Housing Agenda
In the next five years, the government plans to build 500,000 homes in the country, a goal that is being inhibited by limited access to credit by the real estate sector, increased rural-urban migration, and the rising cost of land.
Some of the opportunities and solutions for the agenda include the establishment of the Kenya Mortgage Refinance Company, introduction of the tenant purchase model, and the proposed reduction in tax to developers.
The Food Security Agenda
The government is aiming to make the country food secure, an agenda that is achievable thanks to the development of the manufacturing sector and improved infrastructure. In addition, the achievement of this agenda will lead to the eradication of middlemen, the improvement of fish farming, the growth of e-commerce, and the adoption of modern post-harvesting processes.
Some of the potential inhibitors for this agenda according to Apex Africa include climate change, inadequate data, and “weak early warning and preparedness systems for droughts and other vagaries of nature with the country being caught unawares and unprepared.”
“The challenges that the government is looking to solve are a tall order for the bureaucratic government. No single authority has the solutions for the challenges and these will require all market segments to pull together to achieve the targets,” Apex Africa said.
