NATIONAL ICT CONVENTION 2325 March 2004

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NATIONAL ICT CONVENTION23-25 March 2004
Top-Down or Bottom-Up? Locating ICT Strategy
in Kenyas Growth, Equity Poverty Reduction
Agenda

• Dennis Kabaara
• CEO, Institute of Economic Affairs Kenya
• 23 March 2004, Safari Park Hotel

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PRESENTATION OUTLINE
PART I ICT IN ECONOMIC GROWTH DEVELOPMENT
CONTEXT
PART II ICT AND KENYAS GROWTH, EQUITY
POVERTY REDUCTION AGENDA
PART III TOWARDS AN ICT-ENABLED GROWTH AND HUMAN
DEVELOPMENT FRAMEWORK
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PART IICT IN ECONOMIC GROWTH DEVELOPMENT
CONTEXT
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SOCIO-ECONOMIC SNAPSHOT KENYAS PEOPLE
Rest of Kenya
PEOPLE DATA Expressed as a proportion of every
100 Kenyans
Kenya (TOTAL)
Nairobi
93
7
100
Spatial Distribution
Living below US1 a day
52
4
56
47
5
Working age population
52
10
2
Paid employees
12
Self-employed
26
1
27
11
2
13
Unemployed non-participants
13
0
13
Kids at work (5-17)
44-64
57
57
Life Expectancy
52-63
53
54
Male Life Expectancy
Female Life Expectancy
48-68
60
60
Infant survival probability past 1 year of age
64-89
95
92
Source Ministry of Planning and National
Development, 1999 Population and Housing Census,
Economic Survey 2003
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SOCIO-ECONOMIC SNAPSHOT KENYAS HOUSEHOLDS
Rest of Kenya
HOUSING DATA Expressed per 100 households in
Kenya
Kenya (TOTAL)
Nairobi
90
10
100
Spatial Distribution - Households
1.7
1.6
Rooms per house (average)
1.7
2.7
2
People per room (average)
2.6
Houses - 3 rooms or more
43
2
45
70
2
72
Self-Owned Houses
10
8
18
Rented Houses
30
-
30
Makuti, Grass, Tin Roof
62
64
2
Wood, Earth Floor
52
3
55
Mud, Wood, Grass Wall
56
1
57
Pond, Dam, River, Well Water
85
5
90
Pit, Bucket, Bush Sanitation
78
8
96
Paraffin, firewood, charcoal cooking
80
5
85
Lantern, lamp, wood lighting
Source Ministry of Planning and National
Development, 1999 Population and Housing Census
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INEQUALITY-REDUCING CHOICES WHITHER ICT?
Source World Bank. A Policy Agenda for Growth,
August 2003
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ICT IN ECONOMIC GROWTH CONTEXT

• ECONOMIC GROWTH is measured as the sum of
• MORE CAPITAL
• MORE LABOUR
• BETTER TOTAL FACTOR PRODUCTIVITY

• POINTER 1 STUDIES SHOW THAT ICT KEY CONTRIBUTION
  is
• MORE CAPITAL (Equipment,Infrastructure, Software
  Assets) and not
• BETTER TOTAL FACTOR PRODUCTIVITY (Productivity
  Paradox)
• ICT ESTIMATED AT 0.3-0.9 of 3-4 OECD late1990s
  GROWTH

• POINTER 2 STUDIES ALSO REVEAL
• LOCAL ICT PRODUCTION not as ICT DIFFUSION
• ICT GROWTH LIMIT IS IN RAPID ASSET DEPRECIATION
• SOME ICT GROWTH EFFECTS RESULT FROM REPLACING
• OTHER FORMS OF CAPITAL

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PART IIICT IN KENYAs GROWTH, EQUITY POVERTY
REDUCTION AGENDA
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ERSWEC A QUICK REFRESHER
Source Economic Recovery Strategy for Wealth and
Employment Creation 2003
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ERSWEC THE PROMISED LAND
Source Economic Survey 2003, Economic Recovery
Strategy for Wealth and Employment Creation 2003,
Central Bank of Kenya Monthly Economic Review
December 2003
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FROM ERSWEC TO IPTO FINANCING
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SNAPSHOT OF ICT IN THE INVESTMENT PROGRAMME
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PART IIITOWARDS AN ICT-ENABLED GROWTH HUMAN
DEVELOPMENT FRAMEWORK
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FOOD FOR THOUGHT
TOP-DOWN STRATEGIC CONTEXT

• NATIONAL ICT STRATEGY
• IS CROSS-CUTTING, NOT SECTOR-SPECIFIC.
• HENCE MAINSTREAM WITHIN ALL SECTORS, DONT
  MARGINALISE
• MUST REFLECT OTHER CROSS-CUTTING CONSTITUENCIES
  E.G.
• THEMATIC PRSP GROUPS - GENDER, PASTORALISTS, ME
• REQUIRES A HOLISTIC FOCUS DRIVEN NOT BY
  LOCATIONS, OR
• INSTITUTIONS, BUT REAL DEVELOPMENT MEASURES (IS
  THERE A PRO-
• POOR NATIONAL ICT STRATEGY OR POLICY)
• AT BOTTOM, CAN WE FIND A BALANCED NATIONAL ICT
  STRATEGY?

BOTTOM-UP DEVELOPMENT CONTEXT
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REFERENCES
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ANNEXSECTOR-BY-SECTOR COMPARISON OFERSWEC,PRSP
andINVESTMENT PROGRAM
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AGRICULTURE AND RURAL DEVELOPMENT

• ERSWEC PRIORITY OBJECTIVES
• Legal and institutional reforms
• Empowering resource-poor farmers through applied
  research
• Improved extension services
• Agricultural credit
• Cooperatives

• SELECTED PRSP PRIORITIES NOT IN ERSWEC ACTION
  PLAN
• Improved crop development, including extension
  services (including PSP) and credit through
  micro-finance
• Food Security
• Improved Local Market Infrastructure to support
  agricultural livelihoods is not covered by the
  ERS
• Research and Development

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SHELTER AND HOUSING (incl. SLUM UPGRADING)

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• Develop slum upgrading and relocation plans
• Construct 150,000 housing units annually
• Complete stalled housing projects
• Provide new tenant purchase housing schemes
• Promote secondary mortgage market
• Invite PSP in construction of low-cost housing

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PUBLIC SERVICE (excl. SAFETY LAW AND ORDER)
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PUBLIC SERVICE (excl. SAFETY LAW AND ORDER)

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• Cabinet review of viability of 136 state
  corporations
• Expenditure restructuring
• Wages and salaries restructuring through
  retrenchment of 45,000 public
• employees (including parastatals and public
  universities), delayed
• implementation of salary awards and hiring freeze
• Pensions restructuring through introduction of
  contributory pension
• scheme
• Debt interest restructuring using privatisation
  proceeds and liquidation
• of non-core state corporations
• Cost savings in goods and services purchases
  through streamlined
• procurement and better governance
• Cost savings in Defence/NSIS through restrictions
  in purchase of
• equipment through short-term commercial borrowing
• Privatisation proceeds are not factored into the
  financing framework

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PUBLIC SAFETY, LAW AND ORDER
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PUBLIC SAFETY, LAW AND ORDER

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• POLICE
• Implement a framework for cross-border policing
  and collaboration
• Provide decent accommodation for police
• Establish anti-banditry units
• Comprehensive intelligence research in crime and
  security
• ANTI-CORRUPTION
• Cancel all stalled projects (but refer to SHELTER
  AND HOUSING)
• NOTE Main thrusts from the ERSWEC are retained

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TOURISM, TRADE AND INDUSTRY
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TOURISM

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• Security
• Review of tax structures in tourism sub-sector
• Pro-poor thrusts
• Foster community-based and eco-tourism in
  northern and western
• Kenya, targeted at backpackers and nationals
• Compensation policy for human-wildlife conflict
• Guidance, credit and incentives to SMEs
• Review park tariffs in less-visited areas
• Restructure KTDC into an investment and SME
  credit institution

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TRADE, INDUSTRY AND SMEs

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• TRADE AND INVESTMENT
• World Bank-GoK trade diagnostic study to
  influence trade policy
• New regulatory framework for finance and
  infrastructure
• Investment authority and investment road map by
  2005
• INDUSTRY
• Liberalise trade
• Deepen financial market
• Facilitate use of technology licenses
• Review mechanisms for wage determination
• Improve access to quality training
• Benchmarking studies of textiles (AGOA?) and
  sugar (But refer to Agriculture)
• SMEs
• Strengthen credit institutions, including KIE
• Develop training market for SMEs

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ROADS, ENERGY AND WATER

• ERSWEC PRIORITY OBJECTIVES
• ROADS
• Efficient road transport
• ENERGY
• Adequate affordable supply (KPLC, Ken-Gen)
• Increased oil refinery efficiency
• Oil pipeline extension to Kampala
• WATER
• Rural access to water
• Sustainable management of water resources

• SELECTED PRSP PRIORITIES NOT IN ERSWEC ACTION
  PLAN
• ROADS
• Improved road transport, focus on rural areas
• Road network maintenance
• Reform of Mechanical and Transport Dept
  operations
• ENERGY
• Rural access
• Diversified energy sources
• Reduced dependence on imported petroleum
• WATER
• Improved access to water and sanitation,
  especially poor and vulnerable groups
• Increased coverage of urban sewerage and
  sanitation

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ROADS, ENERGY AND WATER

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• ROADS
• Road inventory and condition survey
• Conventional tolling for 1,208 kms of Northern
  Corridor. 3 concessions (1) Mombasa
• -Machakos (2) Machakos-Rironi (3) Rironi-Malaba
  via Eldoret and to Busia via
• Kisumu
• First concession Machakos-Nairobi under BOT
• Rehabilitate 2,805 km
• Reconstruct 150km roads per annum
• ENERGY
• Create Rural Electrification Authority
• Increase rural electrification penetration from
  4 to 40
• Develop framework for solar power
• WATER
• Increase fresh water resource availability by
  over 250 by 2007
• Rehabilitate 600 rural water schemes by 2006
• Rehabilitate and hand to communities 100 dams per
  year
• Drill and hand to communities 500 boreholes per
  year

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RAIL, MARINE, AIR, PORTS AND MET
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RAIL, MARINE, AIR, PORTS AND MET
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TELECOMMS AND ICT
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TELECOMMS AND ICT

• NEW THRUSTS INTRODUCED IN THE INVESTMENT
  PROGRAMME
• TELECOMMS
• East cost submarine cable
• ICT
• Countrywide ICT awareness campaign
• ICT skill enhancement campaign
• E-government initiative centrally, then to
  districts

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THE CASE OF SPECIAL INTEREST GROUPS