Treasury Cabinet Secretary John Mbadi has issued a stark warning about Kenya’s infrastructural development, urging the country to embrace Public–Private Partnership (PPP) projects or risk falling behind regional competitors.
Speaking at the Inua Biashara MSME exhibition on October 16, 2024, at the Kenyatta International Convention Centre (KICC), Mbadi highlighted the Treasury’s financial limitations, stressing that PPPs are essential to fund large-scale projects without increasing the tax burden on Kenyan citizens.
“I think we also need to be very clear as a country. There are some mega infrastructural developments that we cannot fund through Exchequer,” Mbadi remarked, pointing to PPPs as a crucial alternative to finance Kenya’s infrastructure without adding a tax burden on its citizens.
He went on to explain that PPPs involve concession projects to private developers who collaborate with the government, dismissing concerns that these projects amount to selling public assets.
“We must look for alternative financing and therefore PPP new as it is in this country, much as people don’t understand it, we must make the citizens of Kenya understand PPP and understand that when we give out a project to be done through PPP it is not selling, it is about concessioning that project to a private developer who works with us collaboratively to ensure that we have infrastructure that is competitive enough,” he added.
Mbadi noted the success of Rwanda and Ethiopia in utilizing PPPs to develop key infrastructure, including new airports, and warned that Kenya cannot afford to fall behind its regional neighbours.
“Rwanda has developed a very serious airport, Ethiopia has an airport, Kenya cannot lag behind. We are losing our competitiveness as the hub in this region,” he emphasized.
The Treasury Secretary also called attention to Jomo Kenyatta International Airport (JKIA), stressing that its development must proceed, whether with Adani or another private developer.
“And therefore, whether it is Adani or whoever it is, we must agree that someone must do our airport. And that communication must go out,” Mbadi said, emphasizing the importance of engaging Kenyans in the process.
Adani saga
The proposal to lease JKIA to Adani Airports Holdings Ltd (AAHL), a subsidiary of India’s Adani Group, encountered resistance earlier this year.
The plan to lease JKIA flew into headwinds after a whistleblower lifted the lid on the deal in July 2024.
Kenya Airports Authority (KAA) cleared Adani to take over JKIA before a court order slammed the brakes on the plan.
The concession to Adani would see the Indian firm spend $1.85 billion (Ksh238 billion) to upgrade and expand JKIA and operate it for 30 years, after which it would transfer the facility back to KAA.
While Mbadi remains adamant about the need for PPPs, critics have pointed out that both Rwanda and Ethiopia are building airports without handing over operational control to private investors.
Aviation workers in Kenya have also expressed fears that their jobs might be at risk after Adani’s two-year transition period, despite the company’s assurances to retain current employees.
Many have called for competitive bidding to ensure transparency in the process.
