Kenya’s new Constitution – a new dawn!

New constitution – new era!

In their August 4th referendum, Kenyans overwhelmingly approved their new constitution, and ushered in their Second Republic. For 20 years, Kenyans have attempted 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. The country is finally making a decisive move towards democracy, accountability and prosperity.

The new constitution is a centerpiece in president Kibaki‘s strategy of institutional reform, which now goes into high gear. It brings in a solid framework for fighting corruption, with an independent judiciary, and checks and balances on the executive. A new and powerful Senate will vet presidential appointments, and 15% of the national budget will be devolved to 47 new counties.

This may hopefully translate into better public services. Over the eight years since Kibaki was first elected, the progress has already been remarkable, but not as fast as it could have been. 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. Inadequate institutional and legal frameworks are slowing down the progress, though.

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

Investments and economic growth

Risk-willing investors and fund managers have long had their eyes on Africa. The number of mutual funds focusing on the continent has increased sharply in recent years. In the telecom business, where I was working myself until earlier this year, Africa is already old news. The IMF predicts overall growth for the entire continent 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 Kenya, 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. This estimate is likely to increase 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, highrises and posh office buildings are popping up everywhere. In and around Nairobi, new residential projects are mushrooming. Property prices in Nairobi have risen at an annual rate of around 30%. 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. If your vehicle did not break down along the “road”, that is! Today, you can comfortably drive to Narok, the entrance point to the Mara in 1,5 hours. Most 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. The planned new port in Lamu is likely to further reinforce Kenya’s strategic position in the region.

The current influx of Chinese, Japanese and Indian investments is a strong sign of the country’s increased attractiveness. The new constitution has potential to bring increased stability and accountability, and a more credible judiciary. That could cause more investors from around the world to open their eyes – and wallets – to Kenya.

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