The Kenyan government has announced a major push to leverage public-private partnerships (PPPs) to address the nation’s pressing infrastructure deficit.
- •In a symposium aimed at deepening collaboration between the public and private sectors, the Cabinet Secretary for the National Treasury highlighted a critical annual funding shortfall of approximately $2.4 billion (Kshs. 336 billion) required to develop and maintain the country’s infrastructure.
- •CS John Mbadi emphasized that while the government’s fiscal space is limited, the nation’s infrastructure needs from energy and transport to housing and digital connectivity are both urgent and vast.
- •To facilitate more private sector involvement, the government has established a legal and regulatory framework through the enactment of the PPP Act of 2021 and the Nairobi International Financial Center Act.
“We require an estimated Kshs. 560 billion annually to develop and maintain our infrastructure, but we currently only spend about Kshs. 224 billion per year,” the Cabinet Secretary stated. “Through PPPs, we not only access private sector capital but also benefit from the efficiency, innovation, and risk management capacity that is inherent in private sector operations.”
This strategy will allow the government to continue delivering large-scale infrastructure projects while freeing up public resources for critical social sectors such as health, education, and social protection. The Cabinet Secretary noted that a portion of the national budget is already allocated to social cash transfers for vulnerable citizens, underscoring the need for new approaches to infrastructure financing.
Citing the country’s skilled workforce, and a solid capital base, including a domestic pension fund market of over Kshs. 2.25 trillion and a banking sector with assets of Kshs. 7.7 trillion, Mbadi expressed confidence in the success of PPPs.
The government has also announced a new pipeline of projects being offered to the market on a competitive basis, including 2,820 affordable housing units in Athi River, cross-subsidized with 200 market-rate units. Others include a 3,000-capacity tuition and 800-bed accommodation facility at Moi Teaching and Referral Hospital, Eldoret, and a 4,000-bed capacity student hostel for the University of Nairobi’s main campus.
