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Remarks by Makhtar Diop, Vice President for the Africa Region, World Bank

Makhtar Diop, Vice President for the Africa Region, World Bank

Nairobi, Kenya

December 11, 2013

As Prepared for Delivery

Media Contacts

Your Excellency President Kenyatta
Honorable Cabinet Secretaries
World Bank Executive Director Denny Kalyalya
Principal Secretaries
Distinguished guests
Ladies and Gentlemen:

We are extremely honored, Mr. President, to you have and Mr. Vice President, and members of your Cabinet for this dedication today.  This is a manifestation of the strength of our relationship between Kenya and the World Bank.  This building is a physical reflection of this relationship, as it is THE largest World Bank building outside the headquarters in Washington.  This magnificent building, of more than 25,000 square meters, will include 12 floors of World Bank Group staff – in a state of the art, fully ‘green’ work spaces and IT facilities.  

Before noting the joyous occasions we are here to mark, allow me first to express my own personal sense of loss on the passing of our brother and mourned leader, Nelson Mandela. Madiba was a beacon to all Africans, and his influence and inspiration will live on. As he lies in state today in Pretoria, let us take a moment to honor his memory.

I would also like, Mr. President, to offer my condolences as well on the tragic events at Westgate. Our hearts ached for the losses suffered and we stand with you. 

At the personal level, Mr. President, coming to Kenya is not a typical country visit for me – it is indeed a homecoming. 

As we are opening this office and you will be celebrating the 50th anniversary of Kenyan Independence, this is a great opportunity to look back, not only at what the Bank has brought to Kenya, but what Kenya has brought – and taught – us.

For information, Your Excellence, the program of Kenya has comprised a total of 180 operations since 1960, totaling more than $7 billion in IDA commitments and nearly $1.2 billion in IBRD resources. My colleague Mr. Oumar Seydi has already recounted the volume of IFC support to Kenya as well.

The World Bank emphasis, Mr. President, on eradicating poverty, has long been articulated. I am reminded of a landmark speech delivered by Mr. Robert McNamara, former President of the World Bank, here in Nairobi in September of 1973. Well before the days of HIPC debt relief and poverty reduction strategies, Mr. McNamara observed: “The basic problem of poverty and growth in the developing world can be stated very simply. The growth is not equitably reaching the poor. And the poor are not significantly contributing to growth.”

Mr. McNamara also indicated at that time, the importance of developing the sectors to support growth and poverty reduction. And the wisdom of that emphasis remains today. Our President, Dr. Jim Yong Kim, has given new life to this focus by reaffirming the Bank’s mission to eradicate extreme poverty by 2030 and to build shared prosperity. 

At the time of Mr. McNamara’s speech in Nairobi, Kenya was the first country to articulate an initiative to link the growth of agriculture with the poverty reduction objective.  The famous ‘tea roads’ inspired a generation of World Bank work elsewhere in the world, based on helping small farmers to increase productivity and their incomes. 

As such the World Bank Group remains grateful to Kenya for being the origin of what has shaped the Bank’s poverty reduction work over the past 50 years.

Kenya has also been a prime example in Africa to strengthen our belief that the private sector is the engine of growth.  All conditions should be met to create a conducive environment in which it can flourish, create jobs, and contribute to macroeconomic stability. At a time when many countries in Africa were struggling with the idea of the private sector as the engine of growth, Kenya had already embraced this concept. Building on this vibrant private sector, Kenya was able to become an economic leader in the sub-region.

Today we have a consensus on the need for sound macroeconomic policy, just as there is a consensus in Africa that the private sector will be the engine of growth.  We owe a debt of gratitude to Kenya that this proposition, long accepted outside the continent, demonstrated that this was possible in Africa. In that sense, Mr. President, you were ahead of your time.

Let me pause, Mr. President, to say it was not just the private sector as the origin, but also the experience of Kenya shows the centrality of the domestic private sector. The Kenyan domestic private sector has been able to be a world leader in sectors such as cut flowers, tea and coffee production, and a significant player in sectors such as services, ICT, and air transport. It is clear that this inspires us to shape our work as we intervene on the private sector in Africa – how to support the local, as well as the foreign, investment climate.

Today, Kenya is at a crossroads and we hope you will soon ascend to middle-income status – which brings with it challenges as well.

We have also learned from Kenya about the importance of home-grown institutions. In the last two decades it has become clear that institutions are at the center of economic development.  Not only institutions related to economic activities, but institutions as a whole. The history of Africa reflects the inherited institutions from our colonial past. Kenya, through its constitutional review process, was able – through a long but robust consultative process – to reflect the views of Kenyan citizens in how it organized the country and the resulting institutions to reflect the social and economic realities as well as Kenyan culture and history.

As a result of this process, questions spanning from gender-based violence, from human rights, to devolution have been codified in this new constitution. From that process, we believe that the resulting institutions will respond to the aspirations of the Kenyan people, and thereby translate their aspirations in concrete realization.

As we are examine the contribution of Kenya to economic development thinking in Africa, we have an opportunity to also look at the challenges for the coming decades. As Kenya has shown, private sector-led growth is the agreed modus operandi. We also need, together, to work towards increasing and accelerating the productivity and competitiveness of the Kenyan economy, to allow the private sector to continue playing this crucial role.

As you highlight, Mr. President, in many of your statements, it will be important to significantly reduce hurdles and bureaucracy that are a self-inflicted wound and an obstacle to growth. I would like to commend you on the efforts already undertaken to accelerate reform and improvements to the Port of Mombasa, which is already having a significant positive impact on reducing the cost of doing business in Kenya and elsewhere in the sub-region. It will also require accelerated investment in infrastructure in order to close the gap between the MICs with which Kenya will compete. In that context, public sector efforts to move progressively to a higher level of investment will offer an opportunity for the private sector to contribute to bridging the infrastructure gap. Mr. President, we are pleased to hear that significant steps have been taken to create a PPP framework that will allow greater private investment in infrastructure, and we look forward to future adoption of the related bylaws to make this a reality.

Part of boosting competitiveness of the economy requires investment in human capital. We have been honored to be associated with the free universal primary education program that was underway in Kenya seven years ago, when I was here.  With your vision and clear commitment to universal health coverage, we will join you in that effort as well. As access has significantly improved in Kenya – on both health and education – your focus, Mr. President, on quality and service delivery is highly commendable. The Bank will be delighted to accompany your efforts to improve human capital through better-quality services delivered to the population in education and health, and thereby increase productive opportunities for the poorest, improve human development indicators, and make the transition to middle-income status that is accompanied by reduced inequality, thereby avoiding the pitfalls befallen by other countries.

Similarly, using the huge progress achieved in Kenya in ICT affords a wonderful opportunity to reduce significantly administrative processes that currently affect the cost of doing business here in Kenya.  Mr. President, the Kenyan people have devised a constitution that grants massive authority to decentralized entities. In any country, implementation of such processes is complex, and they pose challenges. As the Kenya government formulates laws to implement, we stand ready to offer our support to you in this process – to avoid disruption in service delivery linked to delivery, but also, Mr. President, to help you measure and improve the current capacity to deliver services to your people at the local level.

Mr. President, allow me to associate myself with all the people who commended Kenya for the sound macroeconomic performance over the past decade – through prudent fiscal policy and debt management.  Moving forward, the transition to middle income status will be a virtuous one – in that it will be inclusive and sustainable. It will also require sound management of the natural resources that Kenya is discovering and poised to exploit. Countries such as Botswana are showing us this is indeed possible. We are confident that Kenya can, and will do likewise.

I would like to thank you again, Mr. President, you and Kenyan people, for having associated the World Bank Group with this economic success story, and for allowing us to be a part of Kenya’s bright future. In this vein, allow me to congratulate and recognize the work of Kenyan Nobel Laureate Wangari Maathai – as we are increasingly aware of the importance of climate change and sustainability in the trajectory of Kenya’s growth and development.

Mr. President, Kenya is for the World Bank Group, one of the countries that we can see making a rapid transition to middle-income status.

We have learned much from your successes - for which we thank you - and we welcome the opportunity for continued partnership, knowledge sharing, and improved outcomes for Kenya and the entire continent.

My renewed congratulations on this auspicious occasion of your Golden Jubilee, and we are honored to have His Excellency President Kenyatta here to join in dedicating our new facility.

I would now like to turn to the Honorable Dr. Henry Rotich, Cabinet Secretary, to introduce His Excellency the President.

Asante sana.