Ruto dreams of a 'new Singapore', but not when counties hold us back

Four years ago, Kenyans were duly informed that “from being ranked as the 12th wealthiest nation in Africa when I took over, we have moved six ranks to become the sixth wealthiest nation on the continent…”. Last week, we heard that “three years ago, Kenya ranked as the eighth largest economy in Africa, with a GDP of $115 billion. Today, our GDP has increased to $136 billion, moving us up to become the sixth largest economy on the continent, according to the International Monetary Fund (IMF)”.

In case you’re wondering, the first statement came from former President Uhuru Kenyatta as he made his eighth State of the Nation Address in 2021.  The second was current President William Ruto’s in his State of the Nation address last week. 

A quick unravelling of this apparent mystery will tell you we probably slipped from sixth to eighth some time between 2022 and 2023, and expect to squeeze back into 6th this year (since the IMF’s is simply a forecast at this moment).

And these comparisons have a lot to do with currency (over and under) valuations against the US dollar, just ask Ethiopia and Angola with whom we are trading places in this battle for sixth

In perspective, if we had hit our super-ambitious Vision 2030 double digit growth aspirations, we would be third in Africa, behind only South Africa and Egypt, having overtaken Morocco, Nigeria and Algeria. 

Actually, even if we only achieved the more modest growth targets in our five-year medium-term plans, we would be fourth, halfway between Algeria in front of, and Nigeria behind, us. 

Today the Moroccan economy that is fifth is about a quarter larger than us, which is the rough equivalent of just less than another Nairobi, or more accurately, an additional Mount Kenya.

This is not a story about GDP, but you get the feeling that we should be much farther ahead in our development journey than we are today. 

Which, whether we believe him or not, is Ruto’s point.  As it was Uhuru’s when, in the address above, he told us “it took England 200 years to industrialise…the US 160 years…Japan 110 years…China 35 years…the Four Asian Tigers (Hong Kong, Taiwan, Singapore, South Korea) 25 years…we too can do it…in record time”. I’m not sure if anyone fact-checked these data points, but the message was, and continues to be, clear.

Yet, even as we dream of becoming the “New Singapore”, we shouldn’t forget that Kenya is the sum of its 47 counties.  So, the question of national progress is really a question of county progress. 

In other words, as the Constitution probably envisaged, we needed to first view counties (and their collectives such as regional blocs) as business-investable economic geographies before we made them mini-versions of the national government mega-bureaucracy. 

Fortunately, the good news is the State Department for Investment Promotion in the Ministry of Investments, Trade and Industry recently launched Kenya’s inaugural County Competitiveness Index for 2024.  Yes, it’s happening 11 full years into devolution, but it’s still a significant milestone.

What does this index, or CCI, do?  First, it assesses and ranks counties based on six business environment and investment climate domains — government and institutions; economic development; productive infrastructure; human capital; business efficiency and climate and environment. 

In performing this assessment and ranking, the CCI tells us which domains contribute to the top-performing counties while identifying how other counties can improve.   

Basically, this CCI provides an opportunity for counties to peer-benchmark among themselves.

Let’s just say that any governor who isn’t familiar with this report is not serious.  For the umpteenth time, governors have two deliverables: governance (service delivery) and socio-economy (local socio-economic development).  Yet most, when they are serious, prefer to focus only on the former (quiz question: how many counties have prioritized budgetary allocations towards agriculture and trade?). 

So, it would not be surprising to see governors dismissing this report, when they might find useful pointers — even if perceptive — from which they could benefit.

What does the report tell us?  Well, it offers us three competitiveness categorisations of counties.  First, highly competitive counties led by Nairobi, and including Kiambu, Murang’a and Nyeri.

That the Nairobi we know scored highest of all counties, including perfect scores in government and institutions, economic development and productive infrastructure, tells us everything about competitiveness at county level.  Second placed Kiambu hit a perfect score on business efficiency, as did fourth-placed Nyeri on human capital. 

All four counties scored highly across most domains; but Nairobi was weak on business efficiency; Nyeri and Murang’a on economic development.

Intermediately competitive counties — the second category — include Nakuru, Machakos and Embu.  As the report notes, these counties display balanced strengths across multiple domains, “without consistently attaining the values seen in the top-performing counties”. 

Nakuru does well on productive infrastructure and economic development; Machakos is competitive on infrastructure as well as government and institutions; Embu’s strengths are in business efficiency and climate and environment.  Mombasa (strong on productive infrastructure), Kirinyaga (strong in human capital and business efficiency) and Tharaka-Nithi (strong on government and institutions and human capital) also score well, attaining at least half of the maximum CCI score.

The report identifies a third category of least competitive counties including Wajir, Tana River and Marsabit.  These counties score poorly across most domains; Wajir on government and institutions, human capital and climate and environment; Tana River and Marsabit on economic development and productive infrastructure.  Garissa and Mandera are the other counties that fall under this heading, attaining less than 20 per cent of the maximum CCI score. 

The common thread across all five counties is weak government and institutions and economic development.

What about the remaining 32 counties?  These are the counties between intermediately and least competitive.  Although this is not specifically covered in the report, there are probably three sub-groups into which these counties fall. 

First, those approaching intermediate level (between 40 and 49 per cent of the maximum score) where we have - from highest to lowest score - Kilifi, Taita Taveta, Meru, Kajiado, Uasin Gishu and Kitui. 

Second, “below average” counties (30 to 39 per cent) – Makueni, Kisumu, Nyandarua, Kisii, Bomet, Kericho, Trans Nzoia, Laikipia, Kakamega and Nyamira from highest to lowest score.

Which leaves us with 16 “next to least competitive” counties (20 to 29 per cent) – from lowest to highest score – West Pokot, Samburu, Migori, Homa Bay, Elgeyo Marakwet, Baringo, Turkana, Lamu, Bungoma, Busia, Narok, Nandi, Isiolo, Vihiga, Kwale and Siaya (that is, Siaya is the best in this particular group).

There’s much more detail in the CCI report that may interest our county leaders, including county-by-county competitiveness profiles across every one of the six domains. 

However, let’s conclude by painting a broad Kenyan picture.  Four highly promising counties (highly competitive); 12 promising counties (intermediate and approaching intermediate); ten counties on the margin (“below average”) and 21 counties where there is a mountain of work to be done across the board. 

Less diplomatically, 2/3rds of our counties (the last 31) aren’t yet really open for business.

Put it this way.  If there is a bottom-up path to the new Singapore it needs to start in counties.