In their August 4th referendum, Kenyans overwhelmingly approved their new constitution, and ushered in their Second Republic. After 20 years of attempting to replace the 1963 constitution left behind by the British, and later amended to suit the needs of previous dictators Jomo Kenyatta and Daniel arap Moi, Kenya is finally making a decisive move towards democracy, accountability and prosperity.

The new constitution is a centerpiece in president Mwai Kibaki’s strategy for institutional reform, that now goes into high gear. It puts in place a solid framework for fighting corruption and impunity, and brings in a strengthened and independent judciary, as well as checks and balances on executive power. A new and powerful Senate will vet presidential appointments, and 15% of the national budget will be devolved to the 47 Counties.

Hopefully, this will translate into further improvement of public services – a development that has already been remarkable, albeit not optimally fast, in the 8 years since president Kibaki’s first electoral victory. Devolution of national resources to the Counties will bring public services closer to the users, in what was previously an extremely centralized system. This provides a good opportunity, that, if snapped from the jaws of corruption and nepotism, may prove an effective tool for poverty reduction.

Kenya’s new readiness for radical reform comes at a time where the country is already doing well, but is being slowed down by an inadequate institutional and legal framework.

It also comes at a time when other African countries are starting to show signs of a new dawn that is being felt all over the continent.  Countries like Nambia, Botswana, Rwanda, Ghana and Ethiopia have for long shown impressive figures of economic growth, with massive job creation and poverty reduction as the results. The FIFA World Cup 2010 in South Africa was the latest , but certainly not the last, culmination in this trend that is gradually changing global perceptions of the African continent.

Risk-willing investors and mutual funds managers have long had their eyes on Africa, with the number of mutual funds focusing on the continent increasing sharply over the past few years. In the telecom business, where I was working myself until earlier this year, Africa is already old news. Overall growth for the entire continent is predicted by the IMF to hit 4,75% after the brief slowdown in 2009. This is way above the advanced economies, and likely to reinforce the attention of investors on Africa.

In the case of Kenya, economic growth is still recovering from the combined effect of the 2008 post-election violence and the financial crisis. The Central Bank of Kenya expects 4%-5% growth in 2010, a figure likely to be revised upwards with the implementation of the new constitution.

Despite the factors that have held Kenya from realising its full growth potential, the signs of growth are easily visible. In Nairobi, the capital, highrises and posh office buildings buildings are popping up all around the central parts of the city, while new residential projects are mushrooming in an around Nairobi in a wide radius. Property prices in Nairobi have risen at an annual rate of around 30%, and plots around the new highways under construction, are being sold off in an ongoing marathon of property speculation.

Massive improvements of key roads across the country are also providing a boost to the economy. Getting from Nairobi to the Maasai Mara (a key earner of tourism revenue) used to take half a day, that is, if your vehicle did not break down along the “road”. Today, you can comfortably drive to Narok, the entrance point to the Mara in 1,5 hours. Parts of the road from Nairobi to Nakuru, the country’s 3rd-biggest city, was until recently a pothole with occasional pieces of road in it. Today, the whole road is smooth and fast to drive, taking maximum 1,5 hours.

The ongoing highway projects in and around Nairobi, along with the planned massive upgrades of the regional railway system into a modern urban mass transit system, are likely to ease congestion dramatically, reducing the cost of doing business. Further ongoing road constructions, and a planned new port in Lamu are likely to reinforce Kenya’s strategic position in the region and beyond.

The current influx of Chinese, Japanese and Indian investments are a strong sign that many already perceive the country to be an attractive investment object. With the new constitution, likely to bring increased stability and accountability, as well as a more reliable and less corrupt judiciary, more investors from all over the world may soon open their eyes – and wallets – to Kenya.

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