Kenya's Treasury pushes for Public-Private Partnerships in infrastructure development

By Robert Mutasi 

Cabinet Secretary for Treasury John Mbadi has defended the growing use of Public-Private Partnerships, PPPs, to modernize and expand major infrastructure projects such as running Kenya's airports. 

This comes amid the public debate on the involvement of private entities, especially international firms such as the India-based Adani Group. According to Mbadi, PPPs are not about "selling off" public assets but are a strategy to ensure the country remains competitive.

Speaking recently, Mbadi sought to clear misconceptions about the role of PPPs, saying that concessioning a project to a private developer does not amount to selling national assets.

Instead, these arrangements allow private firms to collaborate with the government to deliver and manage critical infrastructure.

"We must make Kenyans understand that when we give out a project to be done through PPP, it is not selling; rather, it is about concessioning that project to a private developer who works with us to ensure that we have competitive infrastructure," said Mbadi.

Kenya's drive to attract private investors in major public projects comes amid increased debt burdens that restrict the ability of the government to finance such mega projects on its own.

The National Treasury puts Kenya's public debt at KSh 9.7 trillion, about USD 67 billion as of June 2023, a factor that has driven the government to seek other financing arrangements for projects, among them the use of PPPs.

One of the major contentious issues in the public debate revolves around the possibility that the Adani Group of India could be declared the winner and allowed to manage Kenya's airports. 

Critics say that may deny the country national sovereignty and shut out local involvement. 

But Mbadi downplayed those concerns, arguing that whether it is Adani or some other company, Kenya needs an able partner to fix the infrastructure.

"Whether it is Adani or not, we must agree that someone must do our airport," said Mbadi, to mean that of importance is the expertise and capacity of the partner to invest in the project, not their nationality.

Kenya has, however, successfully executed a number of PPP projects in the past few years, including the Nairobi Expressway, which was constructed by China Road and Bridge Corporation on a concession basis.

It has been touted as reducing congestion in the capital, increasing connectivity, among other benefits; however, grumblings over toll charges and foreign control of essential infrastructure have been persistent.

In the coming months, the government is set to give more details on the proposed concession of key airports as Kenya readies its position as a regional transport hub and gateway to East Africa.