Booming urban populations demand new approaches in Kenya

Developing infrastructure to keep pace with rapidly growing cities is a major hurdle for developing countries when revenue is not distributed equitably, including for urbanisation.

In Kenya, Australia Awards alumna Sheila Yieke is a Director of Legal Services at the Commission on Revenue Allocation, established in 2010 to make recommendations on the equitable share of revenue between the national government and the country’s 47 counties. 

This includes conditional grants to cities to fund infrastructure development, with grants tied to national policies, including Kenya Vision 2030 and the President’s
Big 4 Agenda.

Sheila has been instrumental in shaping the Commission’s mandate, using ‘100 per cent’ of the skills and knowledge she gained through an Australia Awards Short Course in Public-Private Infrastructure Partnership (PPIP) at the University of Queensland in 2018.

‘After the course, I developed a concept note for the Commission to recommend to Parliament an additional conditional grant to cities for 2019–20,’ says Sheila. ‘This will help address services in urban areas that had deteriorated because of previous revenue distribution. The money will attract investors wanting to partner with government.’

The recommendation, which was submitted to Parliament in December 2018, is expected to be incorporated into the Division of Revenue Bill in June 2019. If accepted, five cities growing at rapid rates due to continual migration —Eldoret, Kisumu, Mombasa, Nairobi and Nakuru—will receive conditional grants they can leverage towards PPP infrastructure projects. 

‘The PPP model—pivotal to delivering many significant infrastructure projects around the world—is commonly used in countries like Australia,’ says Sheila. 

While studying, Sheila learned about the PPP conceptual framework, including in the African context, and about essential policy, legal and regulatory frameworks. She also learned about designing, preparing, negotiating and implementing PPPs. 

‘In Kenya, for our cities of the future, we need to apply fundamental financing principles, including return on investment,’ Sheila says. ‘Without this, PPPs will not have stable cash flow and therefore not be attractive to private sector investors.

A challenge in Kenya is to make revenue sharing more transparent.’ 

‘Revenue sharing must deal with competing agendas in a balanced way, with infrastructure one priority,’ says Sheila. ‘Rural areas get finances to ensure access to health care or education, but cities don’t have enough money to build storm water drains, provide sufficient mass transport and invest in water and sewerage treatments. Many Kenyans aren’t connected to a sewerage pipe. Untreated waste flowing into waterways is causing cholera outbreaks and diseases like typhoid.’

Sheila says these are just some of the critical services that are not being delivered in cities. Yet in five counties, more than half the population lives in urban areas, and in another eight counties, at least one-in-four people live in cities.   

‘We see room to increase conditional grants as a way to fund cities so they can invest in PPPs with a guarantee of available funding from national government,’ says Sheila.

To get to this stage, the Commission on Revenue Allocation—through Sheila’s office—worked with the Cities Forum, including representatives from the five cities, the Assemblies in each county and a consultant from the Academic Health and Agricultural Development Initiative. Sheila also analysed an integrated approach towards building resilient cities through the World Bank Resilient Cities program. 

‘We are talking about organising a “Cities Dialogue” forum in July 2019 to draw attention to the financing gap cities are facing,’ says Sheila.

Sheila’s work is an off-shoot of the Reintegration Action Plan she developed for her Australia Awards Short Course, which has allowed her to become an ‘agent of change’.

Feature from Alumni News Volume 27. Click here for full Alumni News.