Nairobi County Business Agenda by Kenya Association of Manufactures

An Advocacy Tool for the Nairobi County Business Coalition Enhancing the Prosperity of Nairobi County, the Industrial and Commercial Centre for Kenya and the Wider EAC Region

NAIROBI COUNTY BUSINESS AGENDA An Advocacy Tool for the Nairobi County Business Coalition Enhancing the Prosperity of Nairobi County The Industrial and Commercial Center for Kenya and the Wider EAC Region

Table of Contents Map showing Nairobi County................................................................................................................ 6 Nairobi Business Coalition .................................................................................................................... 7 Remarks by the Governor....................................................................................................................... 8 Acknowledgements............................................................................................................................... 10 Foreword.................................................................................................................................................. 11

Kenya Association of Manufacturers (KAM) P.O. Box 30225 - 00100 GPO Nairobi Mwanzi Road, Opposite Nakumatt Westgate, Westlands Tel:+254 020 2324817/8; 020 8155531/2; 020 2166657 Mobile:+254 722-201368, 0706-612384, 0734 646004/5 Email: info@kam.co.ke Website: www.kam.co.ke All Rights Reserved A publication of the Kenya Association of Manufacturers Copyrights The material in this work is copyrighted. Except for the quotation of short passages and sections for which due acknowledgement MUST be made, no part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photo copying or otherwise, without prior authority of the Kenya Association of Manufacturers.

Part I..........................................................................................................14

Introduction................................................................................................................................... 14

Background of County Round Tables in Kenya....................................................................... 14

Nairobi County at a glance........................................................................................................... 17

Issues affecting Nairobi County.................................................................................................. 18

Part II.........................................................................................................28

Proposals on Way Forward in Each Sector............................................................................... 28

Infrastructure Sector...................................................................................................................... 28

Limitations of the County Government of Nairobi.................................................................. 41

Low Lying Fruits from the Way Forward.................................................................................... 42

References....................................................................................................................................... 45

ISBN NO: 978-9966-1728-7-7

List of BMOs at the GRT................................................................................................................. 46

Map showing Nairobi County

Kiambu

Nairobi County Machakos Kajiado

Nairobi Business Coalition

Population: 3,138,369 (2009 National Census) Constituencies: 17 County Assembly Wards: 85 Size: 694.85 Sq Km

Foreword

Remarks by the Governor

y government is proud to be associated with the Nairobi County Business

t is my pleasure to present to you the first edition of the Nairobi C o u n t y B u s i n e s s Agenda. The Nairobi C o u n t y B u s i n e s s Agenda is a product of multiple interactions between the business community operating in Nairobi County under the

Coalition, as our collaboration is anchored in the Constitution of Kenya whose spirit of devolution envisions public participation in governance,

with services being brought closer to the people. As such, the concept of a Public

auspices of the Nairobi County Business Coalition and the Nairobi County Government

Private Dialogue (PPD) with the business community will be very critical to my

under the leadership of the duly elected Governor H.E. Dr. Evans Kidero.

government in the next five years. We are committed to working closely with

The Nairobi County Business Agenda is meant to act as a business advocacy tool for all Business Membership Organizations in Nairobi County. The business agenda will also be useful to the Nairobi County Government in identifying key initiatives and areas of improvement geared towards making Nairobi County retain its incumbent position as the economic capital and industrialization hub of Kenya and the East African region. This business agenda also embeds the promises made by the Nairobi County Government towards the realization of Kenya’s national development plan, Vision 2030, and beyond.

the business community to ensure inclusivity, accessibility, responsiveness and accountability in governance and decision making especially on matters that affect the business climate of Nairobi County. It is the vision of my government to ensure that Nairobi County retains its historical advantage as the economic capital of Kenya and the industrial hub of East Africa. We realize the important role that Nairobi County has to play towards the achievement of Kenya’s Vision 2030 and the East African Community’s dream of economic and social integration. My government is committed to ensuring that Nairobi County is a safe and secure place for investors and residents alike. As a government, we are committed to creating an investment friendly climate, with a reduced cost of doing

The business agenda adopts a sectoral approach in its identification of issues of interest to the business community.

business. To achieve this, the county government has identified eight pillars which will help it achieve and realize the

However, recommendations proponed in the guide cut across different thematic areas, while retaining a sectoral focus.

vision for Nairobi County. These are Health care, Sanitation and provision of clean water; Education; Infrastructure

The agenda acknowledges that youth and social issues are central to business, and as such, it dedicates several sections to cover and propone solutions to major social issues, especially unemployment and insecurity, that pose a real threat to the

improvement and development; Security; Environmental management and waste disposal; improved business environment; Urban planning; and, Good governance. As a government, we are committed to promote quality education in the county to complement the efforts of the

economic prosperity of Nairobi County. The Nairobi County Business Agenda is divided into three parts. Part I lays a background of the County Round Tables in Kenya, and expounds on the expectations from the Nairobi County Governor’s Round Table. Part II contains facts about Nairobi County and explores the issues that face various sectors in the County. Part III makes recommendations on the way forward for the identified issues and highlights key issues that the county government can address immediately towards ensuring that the City of Nairobi remains the economic capital of Kenya. The business agenda concludes by emphasizing the importance of Public Private Dialogue and consistent collaborations between the county leadership and the business community in Nairobi County towards achievement of Kenya’s Vision 2030.

national government in providing education at all levels. Specifically, we realize the important role that the County has in early childhood education and promotion of skill acquiring by the youth. The county government aims to set up at least two early childhood centers in each of its 85 wards. To ensure that the youth acquire relevant technical skills, my government undertakes to develop the existing technical centers, and to convert some primary schools such as Joseph Kang’ethe Primary School to technical centers to promote technical knowledge among the county youth. On health, sanitation and provision of clean water, my government recognizes the close relations of the three issues, and critical role of a healthy population in the economic growth of the county. We are aware of challenges which the health sector in Nairobi County including lack of ICUs, ambulances and other necessary are facing infrastructure in

As the Chairman of Nairobi County Business Coalition, I share the Nairobi County Government’s goal of ensuring that

major county hospitals as well as lack disaster management programs. The county aims at implementing programs

Nairobi County retains its historical leading position as the economic capital of Kenya and the industrial hub of East Africa,

that will allow all public health facilities in the county to operate on a 24 hour basis. Further, as a starting point,

in addition to ensuring that the City of Nairobi continues to be the most preferred residential city for individual investors and

Pumwani Maternity Hospital, among other public facilities, will be provided with three ambulances each, in addition

citizens alike.

to fully equipping them with ICU facilities. Health will remain our priority in the next five years. With regard to water supply, my government is committed to ensuring sufficient water supply to all residents of Nairobi County including the industrial areas, informal settlements and other residential areas which suffer perennial water scarcity.

Mr. Polycarp Igathe, Chairman, Nairobi County Business Coalition

My government has identified urban planning of City of Nairobi/ Nairobi County as both a short term and long term agenda. We undertake to develop a 40 year Nairobi County Master Plan to ensure economical allocation of the available land resources to all sectors without preference, while at the same time addressing the social needs of the

a) Cost of doing business in Nairobi County; b) Service delivery in Nairobi County;

residents of Nairobi, and retaining the beauty of the City in the Sun. This master plan, which will be ready in 2014,

c) Land Use and Management in Nairobi County;

recognizes the importance of physical and social infrastructure and environmental management through sustainable

d) Trade - International and Inter-County; and

waste management, in the industrial and economic growth of the county. As such, the Nairobi County government in collaboration with the national government will ensure maintenance of existing and development of new physical infrastructure, especially roads, railway lines and energy, to facilitate industrialization, and consequently economic growth. Further, we will pursue â&#x20AC;&#x153;waste to wealth managementâ&#x20AC;? initiatives to ensure sustainable waste management. As a government, we are committed to ensuring that Nairobi County retains its traditional advantage as the economic and financial center of Kenya and the industrial hub of East Africa. As such, we undertake to streamline the licensing processes and relook at our taxes and enforcement procedures. We recognize the dire need for culture and attitude change among our workforce, and are committed to rebranding ourselves as a county government ready to provide affordable and efficient services to all our stakeholders. This will go a long way in reducing the cost of doing business in the county, thus retaining our current investors, and attracting new ones. However, my government acknowledges that the above will only bear fruits in a safe and secure environment, where businessmen and citizens alike go about their daily activities without fear and the prevailing siege mentality among Nairobi City residents. We will therefore embark on a program to light all streets in the county and install CCTV cameras in a three phased plan. As a government, we are aware of the fact that unemployment is the root cause of most of evils, including insecurity. My government will therefore strive to make policies geared towards ensuring that businesses in the Nairobi County become the engine for growth, creating jobs and new opportunities for our youth, and in this respect, we realize the need for collaboration with the private sector. To achieve the above pillars, my government promises to be guided at all times by principles of good governance including transparency, accountability and inclusivity, as enshrined in the Constitution.

e) Legal and Regulatory Framework in Nairobi County; my government will seek constant

dialogue and collaboration in policy development and implementation of our

mandate. To ensure constant and seamless dialogue between business stakeholders and my government, I strongly urge the business community in Nairobi County to continuously document their views to ensure easier follow up and collaboration with my government. Specifically, during my tenure, I will ensure that my government facilitates Quarterly Round Table Initiatives for all private sector stakeholders in Nairobi County to evaluate progress on issues identified through direct meetings with stakeholders or memorandums presented on specific advocacy issues by the Nairobi County Business Coalition. In recognition of the important role of PPD, my government has established Trade and Industrialization department, with a supporting communication department to ensure regular and sustained engagement with the private sector. To achieve the vision I have for Nairobi County, my government realizes that it requires partnership and the good will of all stakeholders. I therefore urge the private sector to work together with the county leadership to create employment so as to reduce crime and substance abuse that is prevalent among the youth. Further, I urge the private sector to work with my government in establishing educational institutions at all levels. Finally, my government recognizes the need to develop a checklist of issues that it intends to address in the next five years. However, we realize that some issues are critical and require our immediate attention. As such, the county government pledges to move with haste to address security issues in Nairobi County by instituting a County Police Unit and regular police patrols by well equipped policemen; installing street lights and CCTV cameras in the entire county; installing

The development of the Nairobi County Business Coalition is therefore most timely, as we look at business as partners

an Enterprise Resource Planning (ERP) to facilitate efficiency, transparency and controls in the operations of the

in development. My government seeks to facilitate innovation and entrepreneurship among the youth to expand and

county including licensing and payment of fees and charges to the county government. My government realizes the

support industrialization in Nairobi County. We however realize that an industrialization agenda is driven by quality

importance of reduction of the cost of doing business through consolidation of levies and removal of multiple licences,

education which impacts the work force with relevant skills coupled with utilization of modern technologies. We

and we will work to amalgamate these in the next three months. Further, my government is cognizant on the need to

recognize the role of the private sector as our key partner towards the development of relevant skills for graduates

review existing county laws that add to the cost of business, and will immediately constitute a committee comprising

from both TVET and other institutions of higher learning, including universities within the County, to facilitate faster

of private sector stakeholders to review and recommend amendments or repeal. Finally, the role of urban planning

industrialization of Nairobi County.

and infrastructural development towards ensuring that the City of Nairobi remains the economic and industrial City

To achieve regular consultations and inclusion of key stakeholders, my government, through the specific county

in the Sun cannot be overemphasized. As a government, we promise to finalize the Nairobi County Urban Master Plan

executives will coordinate with the private sector to gather views and promote active participation in the development

to address planning, infrastructure and social issues in the county.

of policies and legislation towards creation of a favorable business climate in Nairobi County as well as to spur

H.E Dr. Evans Kidero

industrialisation and economic prosperity under the eight pillars. Private sector issues will be addressed around the following thematic areas;

Governor, Nairobi County

Acknowledgements

Abbreviations

he Nairobi County Business Agenda was prepared f r o m v i e w s a n d presentations of va r io u s B u si n e s s Membership Organizations from Nairobi County.

V a l u a b l e i n p u t and reviews were provided by the Office of the Governor of Nairobi County. The guide was complied through concerted efforts of a dedicated team of my colleagues at the Kenya Association of Manufacturers including Kennedy Mohochi, Phyllis Wakiaga, Tobias Alando, Frida Mbugua, Georgina Wacuka, Bella Akinyi, Anne Ndungu and Paida Nyamakanga.

The Nairobi Business Agenda benefited immensely from review by BMOs which form the Nairobi County Business Coalition including Kenya National Chamber of Commerce and Industry (KNCCI), Kenya Association of Manufacturers (KAM), Kenya National Farmers Federation (KENAFF), Kenya Bankers Association (KBA), Kenya Private Sector Alliance (KEPSA), Institute of Certified Public Accountants of Kenya (ICPAK), Kenya IT Outsourcing Society (KITOS), Petroleum Institute of East Africa (PIEA) and Shippers Council of Eastern Africa (SCEA). I am grateful to BAF for both the financial and technical support accorded to this project. The preparation of this Guide would not have been possible without BAFâ&#x20AC;&#x2122;s support. I especially thank Mr. Clive Davis, the BAF Fund Manager for his dedication to the project and for his valued insights.

Ms. Betty Maina, MBS

Chief Executive Kenya Association of Manufacturers

AFDB

African Development Bank

APSEA

Association of Professional Services of East Africa

BAF

Business Advocacy Fund

BMOs

Business Membership Organizations

BPO

Business Processes Outsourcing

CBD

Central Business District

CCTV

Closed Circuit Television

CIC

Constitution Implementation Commission

COMESA

Common Market for Eastern and Southern Africa

CRA

Commission of Revenue Allocation

DRC

Democratic Republic of Congo

EAC

East African Community

ECD

Early Childhood Education

ERP

Enterprise Resource Planning

ESMAP

Energy Sector Management Assistance Program

FBO

Faith Based Organization

FDI

Foreign Direct Investment

FKE

Federation of Kenya Employers

FPE

Free Primary Education

FSE

Free Secondary Education

GDP

Gross Domestic Product

ICPAK

Institute of Certified Public Accountants of Kenya

ICTs

Information Communication Technologies

ICU

Intensive Care Unit

Identity Card

ISK

Institute of Surveyors of Kenya

JICA

Japan International Cooperation Agency

JKIA

Jomo Kenyatta International Airport

KAM

Kenya Association of Manufacturers

KARI

Kenya Agricultural Research Institute

KENFAP

Kenya National Federation of Agricultural Producers 13

Part I

KEPSA

Kenya Private Sector Association

KICC

Kenya International Conference Center

KLRC

Kenya Law Reform Commission

Introduction

Kilometer

KNBS

Kenya National Bureau of Statistics

Background of County Round Tables in Kenya

KNCC&I

Kenya National Chamber of Commerce

KNUT

Kenya National Union of Teachers

Kenya Power

KRA

Kenya Revenue Authority

KSH

Kenya Shilling

KTB

Kenya Tourism Board

KURA

Kenya Urban Roads Authority

LSK

Law Society of Kenya

MICE

Meetings, Incentives, Conferences and Exhibitions

MOU

Memorandum of Understanding

MSMEs

Micro, Small and Medium Enterprises

Metric Tonne

MTP

Medium Term Plan

NEMA

National Environment Management Authority

NGO

Non Governmental Organization

NSE

Nairobi Stock Exchange

PPD

Public Private Dialogue

PPP

Public Private Partnership

R&D

Research and Development

SMEs

Small and Medium Enterprises

SRC

Salaries and Remuneration Commission

TVET

Technical and Vocational Education Training Insti tutions

United Nations

UNEP

United Nations Environmental Program

UNON

United Nation Office in Nairobi

USA

United States of America

Voltage Watts

WRMA

Water Resources Management Authority 14

With the concept of devolution firmly enshrined in The Constitution of Kenya, 2010, the private sector reckons the urgent need for reorganizing its advocacy approach to ensure that devolution works for businesses, without interrupting them or taking away from gains already reaped from previous business advocacy. Armed with this realization, and appreciating the importance of solidarity in advocacy, Business Membership Organizations (BMOs) jointly1 organized a national consultative forum dubbed Ensuring devolution delivers for business: Building Coalitions In Pursuit of Business Interest on 18th April 2013. This national forum resolved that “devolution must not interrupt business; it must deliver for business and the country at large.” To ensure that devolution delivers for businesses, the national consultative meeting for Business Membership Organizations further resolved to adopt a new advocacy strategy for lobbying county governments. The BMOs agreed to formulate clear, structured and workable ways and channels of engaging county governments to ensure coherence and consistency in their advocacy. In line with this, BMOs in each county would create coalitions to pursue advocacy in county governments through well organized forums, preferably, county roundtables. The national meeting also resolved that BMOs in each region in Kenya would strive towards establishing a regional business agenda to avoid multiple and repetitive encounters with county leadership. This would in turn ensure coherent and consistent statement of business issues with a strong and united voice.

Main Objectives of the BMOs’ Coalition yy

To create a platform for advocacy to deal with business issues in the counties through frequent dialogue and engagement mechanisms;

To better place the business community so as to influence county governments on business climate issues;

To establish a platform for expanding a trade and investment framework in each county; and

To provide stakeholders with an opportunity to critically participate in the governance and growth of the County as contemplated by Chapter Eleven of the Constitution.

Key Objectives of Nairobi County Governor’s Round Table yy

To create a platform for advocacy on business related issues in Nairobi County through frequent dialogue and engagement mechanisms with the Nairobi County Government;

To ensure that the business community in Nairobi County will be better placed to influence the county leadership towards the creation of a business friendly environment;

The meeting, held in Nairobi, was organized by FKE, KAM, KCCI, KEPSA & KENFAP, under the leadership of KAM.

To establish a platform for expanding a trade and investment framework in Nairobi County;

Cost of doing business in Nairobi County;

To provide the stakeholders in Nairobi County with an opportunity to critically participate in the governance and growth of their County;

Service delivery in Nairobi County;

Land Use and Management in Nairobi County;

To identify key flagship projects within Nairobi County in line with Kenya Vision 2030; and

Trade - international and inter - county; and,

Legal and regulatory framework in Nairobi County

To discuss incentives that can be extended to investors in the County by county government. Nairobi County Governor’s Round Table

The contents of this guide reflect the outcome of discussions in these four thematic areas, and recommendations that were arrived at by each group. The way forward in this guide reflects the consensus arrived at by the county government and the private sector after each thematic group made presentations of discussions and recommendations for issues falling under each thematic area.

Expectations of the Business Community from the Nairobi County Governor’s Round Table Land use and management

Trade-international & inter-county

Governor Legal and regulatory framework

Service delivery

Cost of doing business

Figure 1 – the five focus groups formed during the roundtable

That following the first round table in Nairobi County, a foundation for a lasting relationship between the business community and the County government will have been established, and that going forward, the Nairobi County Business Coalition will be able to actively engage the County Government during its 2013 -2017 tenure.

That the Nairobi County Business Coalition will co-ordinate and support efforts by the entire business community in Nairobi County to influence the County Government to implement business-friendly regulations that encourage investment, thus making Nairobi County the most competitive county in Kenya.

That the issues identified in this guide will inform the development of a checklist of actionable issues by the Nairobi County Government for the next five years. Despite the fact that some of the issues identified in this guide will evolve, with some being addressed within an year of the date of this guide or an even shorter period, it is the expectation of the business community in Nairobi that the county government will use this guide as a reference document in the finalization, amendment and implementation of the Nairobi County Integrated Development Plan and the Nairobi County Master Plan contemplated by the County Governments Act.

In light of the resolutions from the BMOs’ national consultative meeting of 18th April 2013, Kenya Association of Manufacturers (KAM) mobilized BMOs from Nairobi County under the auspices of Nairobi Regional Business Agenda to organize the county round table on 8th October 2013. The Nairobi County Governor’s Roundtable was attended by among others the County Deputy Governor, members of the County Executive Committee and the Nairobi County Business community under the umbrella of the Nairobi Regional Agenda and other non affiliated business people. Issues affecting the business community in the county, opportunities for investment in the county and governance issues were explored through focus groups, presentations by both the business community and the county leadership. The private sector grouped itself under five thematic areas, chaired by members of the County Executive Committee as follows: 16

Nairobi County at a glance

The Nairobi Stock Exchange (NSE) is one of the largest in Africa in terms of trading volume, and the second oldest exchange on the continent. It is Africa’s fourth largest exchange.4

It is home to Jomo Kenyatta International Airport, the largest airport in the EAC region and the air transport distribution and cargo export hub for the East African region.

The word Nairobi comes from the Maasai word ‘enaerobi’ which literally means ‘the stream of cold water.’ It grew around a railway line constructed by the British from Mombasa to Uganda. The present site Nairobi was selected as stores depot, shunting yard and camping ground for thousands of Indian laborers working on the railway line. From this center, Nairobi developed unplanned and unexpectedly. The outbreak of a plague and the burning down of the original compound necessitated of the town. By 1907, Nairobi was firmly established and the British decided to make it the capital of the newly formed British East Africa. Source: www.city-data.com

Nairobi County, popularly known as Nairobi City County is the Capital City of Kenya.

The City of Nairobi is the largest city in Kenya and the 12th largest city in Africa, both in physical size and population.

The City of Nairobi is the most populous city in East Africa, with a current estimated population in excess of three million, with a projected population of 5.21 million by 2030. 2The City has ranked 6th in the growth potential of African Cities by MasterCard Foundation.

Nairobi County is home to thousands of Kenyan businesses and over 100 major international companies and organizations, including the United Nations Environment Program (UNEP) and the main coordinating and headquarters for the United Nations (UN) in Africa & Middle East, the United Nations Office in Nairobi (UNON).

Nairobi County is home to the Nairobi National Park, a unique wildlife sanctuary and a priceless resource for Kenya– the only game park in the world located hardly 10 kilometers from the central business district of a capital city. 3

Nairobi is the commercial center and economic capital of due to its well-developed infrastructure including modern financial and communications systems, and wholesale and retail trade chains. It hosts the country’s largest industrial area which accounts for approximately 20% of Kenya’s GDP.

2 3

The City of Nairobi is the financial hub for East Africa, hosting head and agency offices of local and international banks, investment firms, insurance and re-insurance companies, and leading professional firms. The Globalization and World Cities Study Group and Network defines Nairobi as a prominent social center See the Nairobi Greenline Initiative at http://www.nairobigreenline.com/

Key products from the county include processed food, beer, vehicles, personal and domestic hygiene products, construction material, engineering, textiles, and chemicals. There is also a thriving sector that provides employment to artisans including carpenters, metal workers, furniture makers, vehicle repairmen, and retailers.

Peri-urban area to the City of Nairobi are prime agricultural lands producing various food crops including maize, sorghum, cassava, beans and fruit, and livestock farming especially dairy, poultry and pig rearing, all which are an important source of for agriprocessing industries in the county.

Nairobi County has a well developed system of hotels ranging from low cost budget to luxury experience.

The county has great tourism potential with key attractions including Nairobi National Park, Nairobi National Museum, Uhuru Gardens, Uhuru Park, City Park, Nairobi Arboretum, Kenya National Archives, Karen Blixen Museum, Ostrich Farm, Giraffe centre, Daphne Sheldrick Elephant Orphanage, Prof. Murumbii Peace and Memorial Centre and KICC which provides international conferencing facilities.

Issues Affecting Nairobi County Infrastructure Sector Infrastructure is an essential component towards achieving the developmental goals and objectives of any country. Nairobi County, which is a city county, is served by two airports, a railway station and number of commuter stations for both rail and road transport. Nairobi County also enjoys the services of the ultra modern Thika Super Highway, which terminates in the city. Mombasa - Nairobi - Nakuru highway which is part of the northern corridor traverses through Nairobi County, making Nairobi County a transit center. The City of Nairobi hosts the headquarters of leading energy generating companies, power suppliers and regulators. These include Kenya Generating Company (Kengen), Kenya Power and Electricity Regulatory Commission. Despite these positive aspects, the county is faced by various challenges with regard to quality and maintenance of existing infrastructure. The physical infrastructure in the county including most city and residential estate roads are in deplorable 4

It is capable of transacting 10 million trades a day

conditions, making some parts of the city inaccessible. At the JKIA Cargo Village, the roads inside the airport have severe potholes, thus affecting business and damaging perishable products between Airside and Specialized Freight Facilities. “Kenya has not been an attractive destination of FDI. Infrastructure bottlenecks both in energy and roads have been a major constraint on FDI. Good infrastructure lowers the transaction costs, which enable investors to earn returns on their investments, as their enterprises are able to generate profits.” -

of new investments, both local and foreign, due to the need for a large operating costs budget as a result of the need for extra investment on security measures. Further, cases of kidnappings, muggings of motorists, carjacking and terrorist attacks have been on the rise in Nairobi, resulting in a paralyzing fear and siege mentality created out of insecurity.

The Word Bank, Kenya Economic Update June 2013.

Manufacturing Sector Existing roads especially those in residential estate and industrial areas continue to be damaged by seasonal rains due to poor drainage systems. Seasonal rains wreak havoc to the existing infrastructure due to poor maintenance of existing facilities, including causing heavy traffic jams in the city, at the expense of county economy . Power supply in the county is unreliable and expensive due to frequent disruptions and outages. The sewerage and drainage systems in the city are wanting, and water supply to industrial, CBD and residential areas unreliable.

Kenya’s manufacturing sector is among the key productive sectors identified for economic growth and development because of its immense potential for wealth, employment creation and poverty alleviation. Vision 2030 aims at the development of a robust, diversified and competitive manufacturing sector. This sector provides impetus towards the achievement of Millennium Development Goals (MDGs) both in the medium and long term particularly on eradication of extreme poverty6 and hunger and global partnerships for development through improved market access respectively.7

Investment opportunities in infrastructure sector

Under Vision 2030, the manufacturing sector is expected to play a critical role in propelling the economy by 10% growth rate under the Economic Pillar to support the country’s social development agenda through the creation of jobs, the generation of foreign exchange, and by attracting foreign direct investment. To meet those goals, the sector has to be more efficiency driven, raising productivity per unit of input (especially of labor and capital) closer to those of Kenya’s external competitors.

Opportunities exist for Nairobi County to partner with the private sector in the development and maintenance of key infrastructure in the county including the city and estate roads, mass transit systems for rail and road, new power supply grids, and water supply and sewerage systems.

Security Sector Insecurity continue to present one of the major concerns to the county residents, with the business community in Nairobi County ranking insecurity at 69.6% as one of the main factors undermining business. Further, 70% of investors in Kenya indicate crime, theft and disorder as major concerns. This problem is prevalent due to terrorism, high unemployment among the youth, lack of lighting, corruption by enforcement officer, low morale on the part of law enforcement officers and lack of coordinated efforts in all sectors responsible for enhancing security. “Security is both a prerequisite for, and a critical aspect of development. At high levels of insecurity, development is impossible. Indeed the opposite takes place. Economies fail, states go into negative economic growth; societies lose cohesion, levels of health, education and professional capacity regresses.” James Dobbins, The Role of Security in Development

Incidences of random attacks and kidnapping of business men and individuals in Nairobi County have been on the rise, which affect business viability, economic stability and social prosperity, and consequently, insecurity becomes a major impediment to development. Insecurity is estimated to cost investors in the county of Nairobi hundreds of millions of shillings every month, with major operating costs going towards security enhancement, private security services and other security upgrades. 5Insecurity has also contributed to loss 5

Nairobi County has bragging rights as being home to a giant percentage of the manufacturing sector in Kenya and EAC region, approximated at 550 manufacturing firms. According to Kenya Investment Authority, this sector is mainly agro based playing an important role in adding value to agricultural output. The intermediate and capital goods industries are relatively underdeveloped, implying that Kenya’s manufacturing sector is highly import dependent. However, under Vision 2013, the shift is now towards export oriented manufacturing as the main thrust of Kenya’s industrial policy since the country aims to raise the share of products in the regional market from 7% to 15 %, and develop niche products for existing and new markets, especially with Kenya’s membership to EAC and COMESA regional blocs. According to KNBS, employment in the manufacturing sector in 2013 increased from 271.5 thousand to 277.9 thousand people. Sales from the EPZ enterprises rose by 12.0 % in 2012 to stand at Kshs. 47.5 billion from Kshs. 42.4 billion in 2011. Total employment under EPZ rose from 32,043 in 2011 to 32,516 in 2012. Credit from industrial development institutions to the manufacturing sector rose from Kshs 270.8 billion in 2011 to Kshs 473.3 billion in 2012. The growth in this sector resulted in notable growth in agriculture, wholesale and retail trade, while the growth in transport and communication sectors contributed to growth of the manufacturing sector.

6 7

upgrades. This implies the cost of doing business in Nairobi is high. Goal Eight of MDG.

33% of Nairobi firms identified insecurity as a major problem which accounts to losses of about 4% equivalent in annual sales, and up to 3% operating costs go towards security enhancement, private security services and other security

Under Vision 2030 MTP 2013 -2017, the strategy for technical skills development for the manufacturing sector involves training engineers, technologies and craftsmen, and to acquire an approximated ratio of engineers to population of 1:5000

However, the prosperity of manufacturing and industrial sector in Nairobi County is threatened by numerous challenges including poor physical infrastructure, unreliable and costly energy, insecurity, inadequate water supply, high cost of labor, stringent standards of traditional export markets and numerous prohibitive trade barriers including high charges, taxations, levies and the complex licensing regimes imposed by both county and national governments. This is in addition to harassment of businessmen by the county government officials. Other factor affecting the growth of the sector include inadequate capacities of human resource with relevant technical capacity, high influx of contraband and counterfeit goods, inadequate capacity of industries to meet standards and weak public private partnerships especially in research and development. Lack of county specific incentives to investors who wish establish in the county is also a major challenge since investors often shy away destinations without incentives.

Trade Sector The trade sector plays a crucial role towards attainment of national development objectives envisaged under Vision 2030, and the realization of the Millennium Development Goals (MDGs) one and eight on eradication of Extreme poverty and Developing Global Partnership for development through improved market access respectively.8 In fact, Vision 2030 has identified wholesale and retail trade as being key sub-sectors in the economic development agenda of Kenya which is expected to expand substantially as the economy moves towards an annual 10% growth target. There exists high potential and a vibrant wholesale and retail business in Nairobi County and Kenya as a whole, with wholesale and retail trade accounting for approximately 10% of GDP and 10% of formal employment, and approximately 59% of employment in the informal sector.9 However, the trade sector is faced with numerous challenges including: burdensome regulations where businesses are required to acquire multiple licenses and permits for the same issues; processing of licences takes a considerable amount of time translating into increased costs for investors; new inter-county levies for goods crossing county boundaries; lack of clarity and predictability of rules, regulations and payment plans leading to corruption and use of brokers; hawking menace in the CBD resulting in the blockage of main shops along Tom Mboya Street, Ronald Ngala street and River Road. Lack of designated market areas; and a general lack of awareness by the business community on the existing county laws and regulations. In fact, the World Bank Doing Business in Kenya 2012 report, ranked Nairobi City the most difficult Kenyan city to do business. housing. This increased demand for housing has translated into increase in house prices hence the need for cheaper and affordable housing by the majority of the county’s population. As such, the Nairobi County has experienced a proliferation of both formal and informal dwellings, resulting in straining an already stretched service infrastructure. 8 9

See http://www.trade.go.ke/ See more at: http://softkenya.com/investment/trade-sector-in-kenya/#sthash.juw6p1YJ.dpuf.

“A successful city must balance social, economic and environmental needs. It has to respond to pressure from all sides. It should offer investors security, infrastructure (including water and energy) and efficiency. It should also put the needs of its citizens at the forefront of all its planning activities. A successful city recognizes its natural assets, its citizens and its environment and builds on these to ensure the best possible returns.” “Poorly managed urban areas will be unable to keep pace with urban expansion; unserviced slums will proliferate, bringing with them poor health, poverty, social unrest and economic inefficiency.” UNEP, Liveable Cities available at http://www.unep.org/urban_environment/PDFs/LiveableCities.pdf

In Nairobi County, the housing sector continues to grow, with many unregulated structures coming up, despite the existence of building standards. The real estate sector in the county faces a myriad of challenges which adds to the housing menace. This has made home ownership in Nairobi County impossible for majority of Nairobi residents. Challenges include high cost of mortgages, high interest rates, prohibitive property taxes, high stamp duty, legal and appraisal fees and high cost of land due to speculative prices of the property market. Land grabbing of public land is a common phenomenon, unprocedural compulsory acquisitions and evictions are frequent in the county. Notably, Nairobi County is congested, with traffic jams being considered a normal phenomenon. Parking spaces in the CBD and industrial areas are few, and poorly managed. Urban and peri – urban farming has also become common with business firms and home owners in the county engaging in poultry, livestock and vegetable farming, especially in areas with leasehold property ownership.

Investment opportunities in land, housing and urban planning yy

Development of modern affordable residential dwelling units.

Public Private Partnership (PPP) with private sector to develop an efficient service infrastructure, including water supply and sewerage systems and parking spaces.

PPP to develop, equip and maintain public spaces including theatres, play grounds and stadiums.

Professional services in planning of the County.

Water, Sanitation and Environmental Sector Water shortage continues to be a major concern for both the business community especially in the Industrial Area and residential areas alike. Further, informal settlements including Kibera, Mukuru and Mathare experience frequent acute water shortages, presenting a health hazard. In the County of Nairobi, vandalism of water pipes and illegal connections are common place. This is especially common in Mukuru slums resulting in unavailability of sufficient volumes of water in the industrial area for industrial purposes. Although the Nairobi County is served by an expansive sewerage system, some parts of this infrastructure are in disrepair and are inefficient, posing a health hazard, and thus require urgent renovation. A case in point is the sewerage systems along the North Airport Road which are blocked. This is especially important because industrial activities in the industrial areas

translate to constant flow of industrial wastes, which need proper systems of disposal. In some residential areas, sewage waste is discharged into seasonal rivers and the drainage systems along roads, posing a health hazard. This issue compounded when seasonal rains cause flooding in Nairobi County due to poor drainage systems.

Investment opportunities in water, sanitation and environmental sector yy

To private investors, the above challenges present numerous opportunities to invest in water harvesting technologies and water treatment plants, sewerage treatment plants and partnering with the county government to develop water supply infrastructure to ensure that both formal and informal and the industrial sector in Nairobi County have adequate and reliable supply of water.

The proliferation of unmanaged waste in the county, especially in informal residential areas, present opportunities for investors to set up waste management plants.

There are opportunities for the county government to explore PPPs in water recycling especially large consumers e.g. colleges, schools, hotels, etc.

The organic waste from urban and peri-urban farming also portends potential for investment in a bio fuel generation plants.

Second Medium Term Plan 2013 – 2017 OF Vision 2030 identifies “conversion of waste to wealth” as one way of achieving youth employment and sustainable livelihood in Kenya.

Social Issues and Youth Sector Despite going by the sexy nickname “The City in the Sun”, the City of Nairobi/Nairobi County is plagued many ills including unemployment which is a major root cause of crime in the county, especially among the youth, who in most cases are university graduates. Further, the county continues to experience rising numbers of street children, child labor, drug abuse, and prostitution. Youth unemployment, poverty and vulnerability to climate change remain the most critical development challenges facing Kenya. There are concerns in critical areas, including food security, governance and corruption.-

The Second Medium Term Plan 2013 -2017 of Vision 2030 refers to the National Youth Leadership and Entrepreneurship Strategic Plan 2013-2017 as identifying livelihood and economic opportunities, technology/ICT opportunities, sports opportunities, arts and culture as being among strategies to enhance economic growth in Kenya,

Healthcare Sector Health is an essential part of any community which intends to attain economic growth. Nairobi County boasts of the best hospitals nationally equipped with good facilities, including being home to Kenyatta National Hospital, the largest referral hospital in East and Central Africa. Nairobi County has an extensive network of healthcare facilities, from small local clinics, to medium and large high class hospitals. Most modern medical facilities in the county are privately owned.10 Medical services at private hospitals are expensive and hence inaccessible to majority of county residents, who then resort to the affordable public hospitals. However, as is the case in the rest of the country, public hospitals in Nairobi County are overwhelmed by the demand for health care services. Most of these facilities are dilapidated with inadequate staff and outdated equipment, incapable of dealing with current healthcare demands. There is also a portion of the county’s population who cannot afford the basic minimum healthcare services, including maternal healthcare services. Preventive health services are dormant in the county, and the county lacks adequate budgetary allocation ensures efficient health systems. On the overall, the county lacks an operational plan on which the health sector is based.

Investment opportunities in healthcare sector yy

Establishment of world class medical and health facilities including diagnostic centers, hospices, nursing homes and drug rehabilitation centers.

Investing in specialized medical centers e.g. for cancer, optical and dental, cosmetic surgery, HIV and AIDS etc.

PPP with the county government to strengthen Level 4 & 5 hospitals in the county to offer specialized services.

Establishing medical tourism facilities to leverage the visitors arriving at Nairobi County through JKIA.

The World Bank, Kenya Economic Overview, May 2013

The youth in Nairobi County, especially in residential areas, lack public recreational facilities and organized forums to encourage community sports. Like in most urban settings, the youth in Nairobi County experience a general lack of social support systems to make them grow into responsible and productive adults.

Investment opportunities social and youth sector yy

Establishing youth camps, county sports competition and youth training camps.

Investing in sports academies and entrepreneurial, ICT training & entrepreneurship mentoring centers.

Setting up drug rehabilitation centers.

Education Sector Nairobi County is home to several educational institutions offering primary, secondary, technical, and vocational and university education. Some of the oldest educational institutes in Kenya, including University of Nairobi, Kenya Polytechnic, Starehe Boys Center and Nairobi Primary School call Nairobi County home. The government, private sector and faith based organizations (FBOs) are major players in providing education in the county at all levels. This implies access to quality education for county’s young population. Although the county as a wide network of public primary and secondary schools, most of these institutions are falling apart due to poor maintenance of the physical infrastructure, and 10 These include The Nairobi Hospital, The Aga Khan Hospital, Mater Hospital, and Nairobi Women’s Hospital etc.

low staffing especially in the advent of free primary and secondary education. The quality of education in the county is thus affected by low staffing, poor facilities, poor management in schools and non involvement of parents in the education of their children. Further, education sector is affected by the low morale among both teachers and students at all levels partly due to poor remuneration and high unemployment rate in Kenya. These issues ultimately contribute to the poor quality of education in public institutions, leading to a preference for private schools by most parents. It is the general view among the residents of Nairobi County, as is of most Kenyans, that private schools offer better quality of education, albeit expensive, as they have better facilities and more teachers, which are often lacking in public schools. The numbers and quality of Early Childhood Development Centers (ECDs) in the county is not impressive either. Under Second Medium Term Plan 2013 -2017 of Vision 2030, upgrading of youth polytechnics to Institutes of Technology in every ward to empower youth with relevant skills to serve modern economy is identified as way to achieve industrialization under the

Further, the county is now experiencing a reduction in numbers of TVET institutions, as some of its distinguished institutions, including Kenya Polytechnic, have been converted to universities. 11

Investment opportunities in education sector yy yy yy yy

PPP with county government in refurbishing and modernizing the existing TVET institutions. Establishment of specialization centers, developing curricula and impacting practical and relevant knowledge to students in existing colleges/centers. Development of modern but affordable residential dwelling units to meet the demand created by growing student population, especially in universities. Investment in building and fully equipping new primary and secondary schools to accommodate the students from other counties.

Financial Services Sector The financial services sector plays a critical role in any modern economy. The bundle of institutions that make up an economy’s financial system can be seen as “the brain of the economy”, providing the bulk of the economy’s need for many functions12 including facilitating transactions , that is, exchange of goods and services in the economy, and transforming risk. The City of Nairobi is the financial center of Kenya and the EAC region for both banking and insurance services. The importance of the Nairobi County is evident from the industry wide branch network expansion strategy in the EAC region, using the City of Nairobi as the headquarters for their operations. For local operations,13 financial services providers also see Nairobi as an important location.14 Nairobi is also a center for innovations especially in connection with the recent growth in mobile telephony15 and mobile technologies which have revolutionalized financial services in 11 The former Kenya Polytechnic is now Nairobi Technical University 12 http://www.wto.org/english/tratop_e/serv_e/finance_e/finance_e.htm. 13 See the expansion of banks such as Equity Bank, Kenya Commercial Bank, Commercial Bank of Africa, Bank of Africa, UBA, I&M, etc, all with head offices in Nairobi. 14 For example, in 2012, there were 46 insurance companies and six locally incorporated reinsurance companies licensed to operate in Kenya, all with their head offices based in Nairobi. 15 See section on Communication Services.

the EAC region, making Kenya a global leader in mobile money. 16 Investment opportunities in sector yy yy

Innovations and development of new financial services. Opening financial institutions to serve youth and women entrepreneurs.

Professional Services Sector Nairobi County is home to considerable quantities of well trained professional people, and as such, it enjoys a comparative advantage in professional services over other counties in Kenya. The county is called home by a majority of professional regulatory bodies in Kenya. 17It is worth noting that professional services are a key factor of production, especially for Nairobi County y which serves as the industrial and economic center of Kenya. Nairobi County also exports considerable quantities of professional services to East and Southern African countries, European countries, especially the United Kingdom, and the United States of America. However, this sector is faced with numerous challenges including unemployment, migration of skilled resources in search of greener pastures, declining standards of professional training, unsustainable operational costs for professional firms including cost of office space, labor and regulatory compliance. Other challenges revolve around insecurity, poor infrastructure leading to traffic jams, unreliable supply of water and electricity, lack of motor vehicle parking spaces and unsustainable cost of available parking in the CBD.

Tourism Sector Nairobi County is home to many tourist attractions, a key source of revenue. The county is served by JKIA, the main air transport hub for visitors entering Kenya and other EAC Partner States. The county is home to Utalii College, the market leader in training hospitality industry’s human resource. Key tourism destinations in the county include Nairobi National Park (the only city park), Giraffe Centre, Nairobi National Museum, Nairobi Arboretum, Ostrich Park and Kenya National Archives. Massive investments have been made to ensure that the county of Nairobi remains an influential tourist destination. These include world class hotels, restaurants and entertainment sports. The county has numerous and expansive conference facilities, including Kenyatta International Conference Center (KICC) to cater for business tourism. However, the tourism potential of Nairobi County is threatened by insecurity especially in the recent wake of terrorist attacks, poor infrastructures especially for roads, and social ills including harassment of tourists by street children. Lack of diversification of local tourism products has also resulted in decreasing revenues from the sector.

Investment opportunities in tourism sector yy

Investment in world class and premier resorts and conference facilities.

Investment in specialized world class healthcare facilities to foster medical tourism.

Development of sports training camps to foster sports tourism.

16 See http://siteresources.worldbank.org/INTAFRICA/Resources/257994-1335471959878/kenya-economic-updatedecember-2012.pdf. Kenyans deposited US$ 8 billion into the mobile money service, M-Pesa, between July 2011 and June 2012. This represented a 38% increase over the previous year, up from US$ 5.8 billion. These numbers are truly staggering, and show the untapped potential of mobile money. The value of mobile money transactions has more than doubled since 2010, from KES 49.4 billion to KES 129.3 billion in 2012. There have also been the developments of new financial products such as M-shwari, and other mobile lending softwares and platforms. 17 These include LSK, ISK, KMA, ICPAK, EAK, KNUT, NNAK ETC. The list is endless.

Part II

b. City Roads

Proposals on Way Forward in Each Sector Infrastructure Sector a. Airports

Create one way traffic flow in Central Business District (CBD) to decongest the city of traffic, which continues to be one of the main challenge in the city.

In the Second Medium Term Plan 2013- 2017 of Kenya Vision 2030, increasing electricity availability through power generation to improve the energy infrastructure network and promote development and use of renewable energy sources to create reliable, adequate and cost effective energy supply regime to support industrial take off for economic development has been identified as key flagship project.

Liaise with the Ministry of Transport and all other relevant agencies to convert Jomo Kenyatta International Airport (JKIA) into a 24 hours operation in every aspect.

In collaboration with the private sector, lobby the ministries of Transport, Internal Security and Finance and KRA to increase the number of Kenya Revenue Authority and Customs staff at the airport to reduce the amount of time expended on bureaucratic paperwork required for perishable exports.

“The government needs to continue with infrastructure investments, accelerating them where critical bottlenecks exist, such as in the electrical grid. The government needs to adopt an aggressive infrastructure program to provide the building blocks for the private sector in order to efficiently expand its operations.”

Through the city inspectorate, address the issue of hand carts which operate in the city contributing significantly to traffic congestion in the main roads of the CBD and the wider Nairobi County.

Create proper parking spaces and systems especially along Tom Mboya Street, Moi Avenue, Haile Selasie Avenue and all the major roads in the city, and make a provision for drop offs within the CBD. Also, designate a specific parking area for petroleum tankers in the city.

Renovate the existing road network through tarmacking of the existing roads (for example James Gichuru Road and Argwins Kodhek Road), maintaining the ones in good condition and ensuring that all roads in Nairobi County are served by a working drainage system.

Liaise with KURA to embark on a road expansion projects to build new roads to relieve the existing roads with an aim of reducing traffic jams in the city such as Kariokor’s General Waruinge Road, Mombasa Road, Juja Road, Ngong Road, and Limuru Road.

Kenya Economic Update, The World Bank, December 2012

Lobby the relevant regulator to create green forwarders or channels for companies which comply 100% with random audits.

Improve the condition of roads to the JKIA and Wilson airport since most of them are in bad state due to potholes making it expensive for business community to access the airport.

c. Railway system yy

There is need for the county government to work with the national government to expand the existing railway connectivity in the city with a view to creating a mass rail transport system as an efficient and faster alternative to road passenger transport. 29

Liaise with ministry of transport to increase commuter trains to accommodate more passengers thus relieving the road transport of the burden.

Construct car parking facilities at railways stations to reduce congestion and pollution in the city.

d. Matatus and motorcycles yy

Develop a public transport policy for the Nairobi County Government which will provide for the establishment of a Transport Authority to operate reliable and affordable public transport buses.

There is need to phase out 14 seater mini buses matatus), and replace them with buses with a larger capacity towards reducing congestion in the city.

Harmonization of the rates paid by the passengers, taking advantage of technology, to make public transport affordable and predicable in and around the county.

The county government needs to regulate boda bodas and tuk tuks operating within the city centre, and designate proper parking zones for them.

e. Public markets yy

The county government should improve the state of the existing wholesale and retail markets within the county, and make provision for parking spaces for shoppers.

Industrial parks

The county government should ensure that the industrial area in fully supplied with water necessary for industrial production

The roads connecting the industrial area should be renovated to a better state to facility accessibility.

Partner with relevant stakeholders to improve ICT connectivity.

Set up an ICT and BPO parks within the county.

Improve technology related education especially in schools and colleges within the county.

Set up a county website for information dissemination, which will also act as a linkage of the business community.

Incorporate technology in governance such as accepting e-payment systems for license application and other payments

Security Sector yy

The County of Nairobi needs to invest in electronic surveillance and street monitoring systems. This can be achieved through installation of CCTV cameras in the CBD, industrial areas and residential estates including in informal settlements (slums).18

Hasten the street lighting project in Nairobi, and to increase the voltage watt of street light masts from 200V to 400V. Further, to save on energy, and consequently the taxes payable by the residents of the county, decentralize the street lights switching control tower, while converting it to a manual system. Partner with the national government and the private sector to upgrade street and neighborhood lighting since criminal take advantage poorly lit environments.

Establish an effective County Police Service in coordination with the national government since insecurity is a national problem. Increasing police night patrols since police visibility deter criminal behavior especially in high risk areas including Dandora, Gikomba and Kayole where illegal connections of power hamper CCTV installations and other electricity powered security measures.

Within six (6) of first Governor’s Round Table, establish Rapid Response Units in the form of County Metropolitan Police to enforce law and order within the city of Nairobi.

Create a Monitoring Unit in the County of Nairobi, in coordination with the Ministry of Devolution and Planning to check the alarming rate of slum expansion.

Lobby the national treasury to zero rate security surveillance equipment.

Kenya Economic Update, The World Bank, December 2012

Electricity supply to the industrial park should also be guaranteed as frequent power shortages hurts industrial production.

g. Public cemeteries yy

The current public cemeteries in the county are overwhelmed. There is need to set aside bigger piece of land to provide enough space to establish new cemetery facilities for use by the public.

h. Social amenities yy

Set up additional and improved recreational centers for county residents including parks.

Build modern stadiums with the necessary facilities in the county to help nurture sports talent. 30

Information Communication Technology

“New investments in transport and electricity will spur manufacturing and industrial growth, creating more jobs.”

Set up homes for the street children and street families trough PPP initiative e.g. as is scheduled to be undertaken in Ruai.

The vision for security in Kenya under Vision 2030 is “A nation of peace and stability; a society free from danger and fear.” Under the MTP 2013-2017, focus should be on modernizing security infrastructure, incorporate modern technology in investigation, policing and surveillance using an integrated approach.

Collaborate with the private sector in creating youth employment programs and labor intensive technologies to absorb the idle youth and address unemployment, which is a root cause of crime.

18 By August 2013, Access Kenya had partnered with IBM and installed 26 cameras for traffic monitoring.

Make regulations requiring property developers to include security lighting in their premises.

“New investments in transport and electricity will spur manufacturing and industrial growth, creating more jobs.” Kenya Economic Update, The World Bank, December 2012

Manufacturing Sector yy

Strengthen local production capacity of local industries19 through the creation of an enabling environment for industrial development and growth by instituting incentives to manufacturers, and working with various key partners to ensure the supply of affordable and reliable energy. There is urgent need for the county to enter service agreements with energy providers in order to ensure supply of affordable, sufficient, reliable and quality energy to power industries thus increasing productivity. Further, the county should explore alternative sources of energy. This is achievable through the involvement and partnership with the private sector in industrial development, including generation of affordable and green energy.

The county government should introduce a deliberate policy to address the corruption menace and hence curbing the corruption that has discouraged potential investors who wish to invest in Nairobi County.

Demarcate land and invest in the development of industrial parks and industrial research centers, and the requisite physical infrastructure for such zones, with adequate budget being allocated to ensure establishment of the zones under PPPs.20

Reduce the cost of setting up industries by reducing the charges and ensuring that the process of licensing is less cumbersome. In the short term, it is important for the county government to revive or promote ailing industries.

Work with governors from other counties which are a key source of raw materials for industries in Nairobi County to improve critical infrastructure including main roads, rural access roads and rural electrification in villages. This will improve the dilapidated roads network in these counties to facilitate the transport of mostly fish, dairy and agricultural products, which are perishable in nature, from the farms to the cities/towns.

Ensure accessible internet access to county citizens and businesses. Further, develop and utilize modern technologies including a county website to inform potential investors of the available investment opportunities in the county. Towards marketing of Nairobi County as an industrial hub, set up a county investment committee and consequently an authority to develop investment incentives and market the county on a global scale. Focus resources towards the development of niche product21 and raising productive efficiencies of local firms through facilitating comprehensive training and research & development investments and industrial restructuring.

19 Vision 2030 Manufacturing sector (Goals for 2013 - 2017). 20 Development of industrial and manufacturing zones, Vision 2030 Manufacturing Sector (flagship projects and key initiatives). 21 Vision 2030 Manufacturing sector (Goals for 2012).

Set aside adequate budget for export financing for upcoming export enterprises, especially SMEs and those operated by the youth.

Trade Sector a)

Business Regulations & Licensing

In line with Vision 2030, the county should relook at its taxes. The County will need modern, competitive business taxes which are less complex and have the least administrative burden. New levies at the county should be guided by the Statutory Instruments Act, 2013.

Within three (3) months of the Governor’s Round Table, establish a one stop shop for business licensing and a Single Business Permit for Nairobi County. To reduce the regulatory burden for business with interests in multiple counties, the Governor of Nairobi County, as vice Council of Governors, should propose an overarching law on Single Business Permits, applicable nationally.

Within six (6) months, the County government should utilize ICTs and other e-technologies to facilitate online transactions thus reducing the risks associated with cash transactions.

Streamline powers and practices of regulatory departments with overlapping mandates to address duplicity of charges and taxes. In this respect, install a system for tracking and controlling tax and levy collection, allocation and expenditure for all county government activities. An ERP is recommended to achieve this.

To manage the regulatory process, the county government to develop a strategy and mechanism within one (1) month, that will effectively communicate any new laws to all stakeholders to facilitate compliance. Sufficient notice (proposed at three months) should be given to the business community for introduction of new and/or change of fees.

In the meantime, the county government to immediately establish a committee (with membership from both the county and private sector) to review existing county regulations and make recommendations for their review or repeal.

Key businesses should be represented in county government committees constituted to revise or introduce new fees/charges. Any recommendation on new levies/rates should be effected after wide consultation with all stakeholders. The acceptable fees should be gazetted and published in the county government websites and other media for wider reach.

County government needs to increase the budgetary allocation for sensitization and public engagement on new and existing policy.

The County Government should incorporate business community’s key stakeholders in all committees formed by the office of the Governor of Nairobi County.

Liaise with other counties in Kenya on the need to harmonize their taxation regimes to ensure uniformity to ensure that business people from one given county (especially Nairobi County) are not be subjected to multiple charges in various counties’ markets. 33

Lobby the national assembly to develop legislation to the effect that cess is only chargeable at two points, that is where the produce is coming from and where it is sold at a designated market to avoid double taxation and stifling of inter county trade. There should no cess for goods destined for export markets. To address the issue of harassment of the business community by county officials, the county government to introduce identification cards for its inspectors, and retrain county inspectors on the “Walk in, Introduce and Show ID” procedure in case of an inspection of a business premise. To achieve success on this, county government to create an awareness campaign on the inspectors and procedure for inspection through available media channels, including posting photos and names of all inspectors on the county website. Install a customer care number to report untoward incidences

Equip designated markets with the necessary infrastructure and facilities especially for storage to foster growth and profitability.

Lack of Awareness on County Laws and Regulations

Predictability of policies, laws and regulations: yy

Within six (6) months of the first Nairobi County Governor’s Round Table, the county government, in consultation with CIC, KLRC and relevant stakeholders to develop a public participation framework for law making process, including a Nairobi County specific system for tracking bills, notice for submissions/input by the public and a feedback mechanism from County Government on incorporation of private sector inputs.

Hawking Menace in the City of Nairobi

Refurbish markets around city centre for use by small scale business people and create sufficient parking areas for customers, while addressing security concerns usually associated with these retail markets. Given the limited space in the CBD, it is worth noting that the county government is considering developing a multi-tier, multi sectoral building complete with a parking garage to house sellers of meat groceries and food.

Utilize existing media and information forums including newspaper pull-out/ supplements, websites, facebook and other modern and fast technologies to inform the public of any proposed or upcoming legislation.

Develop additional market spaces, within a reasonable distance from the city, to ensure easy access by customers who consider the current markets situated in Muthurwa and Gikomba inaccessible.

Within One (1) month of the first Governor’s round table, profile BMOs and develop a common mailing list to facilitate sharing of information of the county’s law making process.

Public education on county policies and laws

Establish a flea market in the CBD over the weekends, by closing off some city streets such as Mama Ngina Street, on designated days.

Educate the county inspectorate on county laws to ensure proper and legal enforcement.

Develop and enforce stiff penalties for both hawkers and customers who transact over non designated areas.

Partner with media/NGOs to sensitize the public on County laws, and consider entering into a PPP strategy for public education initiatives.

Facilitate security through lighting the markets and city streets, while retraining and rebranding the notorious council askaris into a Metropolitan Police to provide customer - oriented security services.

Ensure provision of cleaning services in these markets round the clock, and impose heavy fines littering in the County of Nairobi. This can be acquired through contracting services of private firms.

Lack of Designated Market Areas

Designate land for development of wholesale and retail market places in Nairobi County. Construction and management of these markets can be achieved through a PPP Within one (1) year into office. However, it is worth noting that the county government has committed to move Wakulima Market from its current location to a demarcated 47 acres piece of land in Kariobangi.

Develop a meat market with a designated section for livestock trading.

Develop appropriate laws to provide for animal rearing since animal keeping is now common in Nairobi County.

Within one (1) year into office, designate space for a farmers’ market for fresh agricultural produce from Nairobi County and the neighboring counties. 34

Review of archaic laws yy

Align the form and substance of the county laws with the Constitution of Kenya, the mother law for any legislation Kenya.

Within two (2) weeks of the Governor’s Round Table, the County of Nairobi, through the office of County Legal Counsel to avail all existing County by-laws to the private sector for their review and proposals for amendment.

Review of licenses and permits yy

Establish a sub-committee comprising of representatives from private sector and the county government officials to review existing licenses/permits, and make recommendations towards a conducive investment climate in Nairobi County.

Immediately, the County Government to nominate representatives from the private sector to all County Government committees currently working on the county’s legal and regulatory framework.

Law enforcement

Stabilize land prices.

At the national level, there is need to lobby the review of the Land Act to remove ambiguities in law so as to ensure transparency, consistency, predictability, and enforceability.

Develop a code of conduct for the city inspectorate personnel on lawful enforcement measures, while encouraging and cultivating culture and attitude change within the county workforce. This should be done as soon as humanly and financially possible.

Land, Housing & Urban Planning Sector

Water, Sanitation and Environmental Sector

As a starting point, the county government should install updated land administration and management tools in the county land registries to create transparency and controls.

Demolition of illegal construction along sewer lines (which cause frequent blockages).

To eradicate corruption which is entrenched in the county land registries, corrupt officials should be sacked, so as to nip this cancer in the bud.

Introduce a County Water Drainage Master Plan to be incorporated in the Nairobi County Master Plan.

The corruption menace which has been eating away at the county land offices should be eradicated, preferably through computerization of records and operating systems.

Promote water harvesting and develop a regulatory framework by December 2014 to manage the supply of harvested water to the consumers.

Within six months (from August 2013), the county government to ensure that the water available in the County of Nairobi is shared among the county residents in an equitable manner, especially when it comes to rationing.

Encourage residents of the county to have individual connections including sinking boreholes to relieve the Nairobi Water Company of the supply burden.

Under Second Medium Term Plan 2013 -2017 of Vision 2030, one of the key flagship project in Land Reforms contemplates safeguarding and digitalization of land paper records

The county government to subject the Interim Integrated Master Plan for the City of Nairobi to stakeholdersâ&#x20AC;&#x2122; scrutiny.

Zone the county and define residential areas, commercial/retail areas, industrial areas, market areas and open spaces and social amenities. Further, the county should review the physical planning systems currently in place, and engage qualified physical planners and other relevant professionals in an effort to curb the unnecessary land subdivisions and change of land use. In this respect land use policy for the county should be adhered to strictly.

The county to embark on an Urban Renewal Strategy to give a facelift to the dilapidated parts of the County, especially Eastlands areas.

There is need to maintain existing and expand necessary infrastructure in the county including roads, sewerage systems, water supply and information communication technology to ensure service, while demolishing illegal constructions along sewer lines and other important infrastructure.

Enter into PPP to develop clean and affordable housing in an effort upgrade slums, and ensure affordable shelter for the middle income group which has been expanding rapidly in the County of Nairobi.

Designate public spaces for development of public parks, recreation areas, playing grounds and stadiums.

By 31st December 2013, develop regulations to manage and transform urban and peri -urban agriculture in the county.

Repossess/reclaim public land which has been irregularly allocated to individuals. 50% if such land should be reclaimed by December 2013. Thereafter, take audit of all county land and land recovered from grabbers to safeguard the reclaimed land from further irregular allocations. 36

â&#x20AC;&#x153;Unemployment is one of the most daunting economic challenges facing Kenya. The government has consequently placed job creation on the top of its policy agenda. Te youth account for 61% of the unemployed. Many of the unemployed youth have no job training other than formal schooling. Hence, unemployment is not just lack of jobs but also lack of job skills due to inadequacy of the training infrastructure as well as means to acquire skills, due to poverty.â&#x20AC;? Youth Employment Development Fund, Available at http://www.youthfund.go.ke/index.php/about-us/about-yedf

Social Issues and Youth Sector yy

Private sector should partner with the county government to create creating job opportunities for the youth. To achieve this, the county government should provide a favorable environment in which investments can thrive, resulting in job and wealth creation.

The county should maintain existing and develop more public recreational facilities in the county to ensure that the youth are engaged in constructive activities instead of indulging in criminal, drug abuse and other related activities.

County government should seek private sector collaborations to develop and sustain county sports tournaments for youth to identify and develop talent.

Develop a framework for identifying special abilities and talents among the youth, especially in primary schools. Utilization of these talents will in the long term be beneficial to the county in the form of revenue creation.

Increase the number of vocational training institutions to cater for those who cannot afford higher education as they will be equipped with necessary skills for their economic empowerment

Create support systems for the youth in every ward that will encourage entrepreneurship among the youth. 37

In collaboration with the private sector, establish rehabilitation project for street children and families. It is worth noting that the County government has identified a location in Ruai, but is hampered by scarcity of resources.

Education Sector yy

The county government should put in place measures aimed at expanding access to education and equity in access for all county residents, for example, by subsidizing text books and equipment used in schools.

Revitalize the health infrastructure22 - in line with Vision 2030, the county should endeavor to provide efficient, equitable, affordable and high quality health care, by having a functional health delivery infrastructure in place. This will entail building new healthcare facilities and upgrading of those already in existence to ensure accessibility of affordable healthcare opportunities for the majority of the county residents, and initiating innovative programs such as a mobile clinics and medical camps and incorporating traditional birth attendants.

Emphasis on training in employable skills those are relevant to the county workforce including ECD teachers and teachers for children with special needs, while building more schools at all levels including ECD, primary and secondary.

Seek partnerships with the private sector, FBOs and development agencies to construct quality ECD, public primary and secondary schools to enhance the access to basic education in the county to all residents. Vision 2030 provides for the need to raise the transition numbers from primary school education to other levels of education.

Encourage investors to establish industries related to and with a direct impact to the health sector to serve the hospitals and health care centers within the county and the wider central Kenya region e.g. setting up of a pharmaceutical plant in the county.

County government should introduce incentives for investors to partner with the county to develop educational institutions to enhance access to basic education by county youth.

Upgrading of existing health centers through initiatives such as raising the hospitals in the County to level 4 and level 5 hospitals so as to reduce congestion at the Kenyatta National Hospital. In line with this, the County government should strengthen health services delivery in the County by putting in place mechanisms aimed at ensuring that the ratio of health workers to patients is appropriate to reduce the congestion that is being experienced in the few available healthcare facilities e.g. a medical workers’ volunteer program to help reduce the burden on the existing few health officers in the hospitals.

Establish more vocational training centers in Nairobi county and strengthen vocational training to ensure that the students receive education relevant to the needs of the job market, and prepares graduates for practical work in the industries.

Healthcare Sector yy

Strengthen the inspectorate arm of the county to also focus on government hospitals, as well as private clinics and herbalist.

Partner with the private sector to establish world class medical and health facilities, including sports injury medical centers.

The county government should review and implement more relevant preventive programs to reduce the rates of infection from preventable diseases like malaria, diarrhea, typhoid and TB.

Make health care accessible and affordable by subsiding the costs of medication and healthcare.

Partner with the private sector to set up drugs rehabilitation centers.

“Decisions regarding the allocation of public funds in the Health sector and health- related areas must consider their intrinsic and instrumental value of health. Health is an asset, a component of what economists define as ‘human capital’. Investment in health has marked deficiencies (in the amount as well as its allocation) that limit the potential impact that improvements in health can have on economic development.” Source: Investing in Health for Economic Development, WHO. 22 Vision 2030 (Strategies to improve Health care)

Under Second Medium Term Plan 2013 -2017 of Vision 2030, upgrading of youth polytechnics to Institutes of Technology in every ward to empower youth with relevant skills to serve modern economy is identified as way to achieve industrialization under the Economic Pillar.

Provide bursary and other assistances to subsidize for the schooling expenses for the needy students.

Allocate a sufficient budget line to improve and expand the existing educational facilities in the county so as to provide adequate infrastructure in schools to accommodate all learners at all levels. Specifically, there is urgent need to equip TVET institutions in the county with the modern equipment to facilitate new curriculum that impacts relevant skills.

Strengthen vocational training to ensure that graduates are equipped with skills that are relevant to the market and industrial needs. This can be achieved through entering into PPPs with industry players towards the establishment and modernization of TVET institutions and specialization centers in the county, including an entrepreneurship academy to boost entrepreneurship skills and financial literacy. The county government will need to provide incentives and waivers investors including facilitating access to affordable land for expansion of universities, colleges and specialization centers, and waiving land rates for such land.

In collaboration with the Ministry of Education, strengthen the inspections of educational facilities and curricula at all levels to ensure and uphold quality.

Partner with the private sector to develop practical internship programs.

Financial Services Sector yy

County government to partner with the private sector in setting up incubation centers for ICT innovations to facilitate development of financial products that meet the ever evolving consumer and industry needs. 39

Under Second Medium Term Plan 2013 -2017 of Vision 2030, the focus in ICT should be on strengthening technical capacities and capabilities of individuals and institutionsâ&#x20AC;Ś..in order to develop highly skilled human resource base that can trigger intensification of technologies and innovations in priority fields.

As contemplated by Vision 2030, demarcate land to set up technology villages and BPO parks.

Professional Services Sector yy yy yy yy yy

County government needs to partner with professional bodies to develop a strategy for mass public transport in the City of Nairobi. Need for an urgent revision downwards of the cost of parking in the County. County government to install CCTV systems and adequate street lighting system in the County. Need to have regular police patrols in the County. County government needs to enter into an MOU with Kenya Power and other energy players to ensure consistent supply of energy to premises in the city.

Limitations of the County Government of Nairobi 1. Bureaucracy: The County Government of Nairobi is committed to implementing the solutions proposed by the business community towards making Nairobi an investment friendly County. However, government leadership would like to bring to the attention of its residents the bureaucratic and cumbersome process attendant to the procurement of goods and services necessary to realize the proposals. As such, the business community, using its numbers, will need to lobby the Ministry of Finance and the National Assembly to review the Public Procurement Act with a view of ensuring a faster and more efficient public procurement process. 2. Scarcity of resources: it is worth noting that all the proposed actions will bear a financial aspect in their accomplishment. The County government is currently facing a huge wage bill, and the collections from the county are unable to meet this bill. This is partly due to corruption by County employees and the inefficient systems and methods utilized by the county government. Also, the county government, under Schedule Six of the Constitution of Kenya inherited various financial obligations from the national government, and the revenue allocated by the national exchequer is not adequate to meet these obligations. The business community should therefore assist the County government in maximizing its revenue collections by ensuring that taxes are paid and that these taxes reach the county government. Secondly, the County government of Nairobi plans to establish a Nairobi County Trust Fund which will be chaired by a representative from the business community and consist of officials from the county government. The private sector is encouraged to donate generously towards the kitty, as funds from this trust will go towards realizing the proposals contained in the Nairobi Business Agenda. Key programs include setting up a fully equipped County Disaster Response Center and buying ambulances to serve the entire county. 3. Human Resources: Incompetence and low technical capacity of personnel at the County continues to be a major impediment in the realization of the goals and objectives of the county government. The salary scales set by the Salaries and Remuneration Commission are incapable of attracting qualified and required talent to ensure quality service delivery by the County. 40

Low Lying Fruits from the Way Forward Decentralization of Services Further to the concept of devolution and the work of the Transition Authority, Nairobi County needs to put in place systems and capabilities to enable it to take over function, including the enactment the requisite legal framework to facilitate the exercise of such functions which have now been devolved.

Development of a Public Private Dialogue Strategy yy

Pursuant to the requirements of the Constitution of Kenya, the Nairobi County Government, in consultation with its stakeholders, will develop clear mechanisms to enable the private sector to interrogate strategies, policies and regulations of the County government in a timely and measurable way. As a starting point, the County will start using internet including emails, short text message services and print media.

The county to develop an online information portal for use by the private sector to track all development in the County.

In line with this, the County government will circulate the draft Nairobi County Master Plan for interrogation by the private sector by January 2014.

Reducing the cost of doing business in Nairobi County As a county with high cost of doing business, the county government will: yy

Put in place measure to protect the existing businesses in the county from imposition of additional levies and licences by other counties through advocacy and support. Specifically, the Nairobi County Governor will lobby other governors to develop regulations prohibiting imposition of cess on goods meant for export.

Immediately constitute a committee comprising of private sector and county officials to review existing County regulations with a view to amending or repealing oppressive county laws, and recommending licences and levies which need to be merged.

Ensure that the County of Nairobi is an interactive website and establish a one stop shop for business pertinent information.

Procure an ERP system to track and control collections, allocations and expenditure for all county government activities.

Embed a preference scheme for the youth in procuring for county projects.

Ensure that all county policies and bills are developed in consultation with key stakeholders and adequate notice for scrutiny by stakeholders (at least 30 days) should also be provided for.

Bi- Annual Meetings of County Governors from Kenya The leadership of Nairobi County is cognisant of the central positioning of Nairobi County, the economic and commercial capital of Kenya, which is also the capital city of Kenya. Many businesses operating in Nairobi County also have interests in other counties, and often obtain raw materials from these counties. Further, majority of Nairobi County residents rely on food 41

produced from outside the county. In light of this, Nairobi County government, in collaboration with key stakeholders, will organize bi-annual meetings of governors from relevant counties to discuss issues of mutual interest that affect the economic prosperity of these counties, and the national economy. Specifically, the first meeting will canvass the issue of cess, proposing that cess should only be chargeable at two points, that is, place of origin and place where the product is sold. This meeting will form a key advocacy platform for development of national and county laws which affect the entire nation.

Security in Nairobi County Nairobi County plagued with high incidences of insecurity and criminal activities, the county government will work with the national government to create a Metropolitan Police Unit, and have regular police patrols in the county, including in residential areas and along highways which are prone to carjackers. The County government will continue with installation of CCTV cameras in all parts of the county and enhance the street lighting program.

References Statutes The Constitution of Kenya, 2010 The Transition to Devolved Government Act 2012 The County Governments Act, 2012

Documents/Reports The World Bank, Kenya Economic Update, Edition No. 8, June 2013 The World Bank, Doing Business December 2012 The World Bank, Doing Business, June 2013 World Health Organization, Investing in Health for Economic Development, 2012.

Conclusion

Kenya Vision 2030 (Popular Version)

Nairobi County has the historical advantage due to its geographical location as Capital City of Kenya coupled with a well established industrial capacity, immense entrepreneurship potential, well educated human resource and expansive infrastructure. This portends immense potential for further economic growth of a county which is already positioned as the economic and commercial center of Kenya, and the industrial hub for East Africa. As such, going forward, constant and systematic collaboration and dialogue between the county government and the private sector will be crucial in devising strategies and frameworks aimed at realizing the full potential of this county. In light of the importance of consistent dialogue and collaborations, the formation of the Nairobi County Business Coalition spells a sound foundation to ensure that the Nairobi County Government, through the various members of the County Executive Committee, works closely with the private sector, thus ensuring consultations and inclusion in decision making on matters that affect the business climate of the county, as provided by the Constitution of Kenya.

Vision 2030 Medium Term Plan 2013 -2017

In the 2013-2017 tenure of the current county leadership, public private dialogue will be achieved through quarterly round table meetings focusing on five broad thematic areas, that is: a) Cost of doing business in Nairobi County; b) Service delivery in Nairobi County; c) Land Use and Management in Nairobi County; d) Trade - International and Inter-County; and e) Legal and Regulatory Framework in Nairobi County;

Key Economic Indicators, 2012, KNBS Kenya Vision 2030 Progress Report as at 1st February 2013 AFDB, Education and Economic Development in Africa, 2010, Websites visited http://www.investmentkenya.com http://www.epckenya.org/ http://www.worldbank.org/en/country/kenya http://www.knbs.or.ke/ http://www.kam.co.ke/ http://www.ktb.go.ke/ http://www.transauthority.go.ke/ https://www.opendata.go.ke/facet/counties

It is therefore important that Nairobi County Business Coalition, through the BMOs and business people whose business interests fall under these sectors, form thematic groups as forums for discussions of specific issues that affect their businesses. These groups will then collate and coalesce these views and channel them to the county government, through the specific county executives. This will facilitate easier follow up by the private sector and faster requests to the private for input and engagement by the county government and speedy response by the private sector.

http://www.kws.org/parks/

Members of the business community in Nairobi County, especially the youth, who are not members of any BMO are therefore urged to pursue membership to relevant organizations to ensure their voice is heard and to strengthen the voice of business advocacy in the county.

www.unep.org/

http://www.who.org http://www.ilo.org http://www.afdb.org www.wto.org/ http://siteresources.worldbank.org/ 43

List of BMOs at the Governorâ&#x20AC;&#x2122;s Roundtable 1.

Consumers Federation of Kenya (COFEK)

East and Southern Africa Daily Association (ESADA)

Kenya Agri-business and Agro-Industry Alliance (KAAA)

Kenya Association of Physicians (KAP)

Kenya Chamber Mines

Kenya Federation of Master Builders/Masons Integrated Limited

Kenya Livestock Marketing Council (KLMC)

Kenya Medical Association (KMA)

Kenya Renewable Energy Association (KEREA)

10.

Kenya Small Scale Cereal Growers Association

11.

Kenya Medical Women Association (KMWA)

12.

Nairobi Informal Sector Confederation (NISCOF)

13.

National CBO Council

14.

Tree Farmers Association

15.

Value Addition and Cottage Industry Development (VACID)

16.

Kenya Association of Manufacturers (KAM)

Key Photographs

notes...