indigenous enterprise

Are we building pro-poor infrastructure?

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This article first appeared in my weekly column with the Business Daily on November 19, 2017

Last week I attended a conference that had infrastructure development in Kenya at its heart. Several interesting points were made by some of those who attended that provide important food for thought as Kenya continues on the path of aggressive infrastructure development. The topic of conversation was the Standard Gauge Railway (SGR) and the issues that are beginning to emerge as it starts activity.

The first point made was that it can be argued that the way in which the SGR has been built is anti-poor, and by anti-poor I mean it functions in a manner that locks out low income individuals and traders from accessing passengers. The SGR is lined by electric fences on either side and the stations are built in a manner that prevents hawkers and traders from selling their wares to those inside. In the past when the train snaked through the country, train stations were a hive of business activity, a point at which passengers could buy various items from local traders. The stations were built in manner that allowed easy access to and from trains. This is no longer the case. The SGR is built in a manner that does not allow local traders or mama mbogas anywhere near the stations or train. Is this fair? Is it fair that the SGR seems to be locking out low income traders from a potential client pool? What does this mean for income growth for local and low income traders?

A modern SGR train. FILE PHOTO | NMG

(source: http://www.businessdailyafrica.com/image/view/-/4193670/medRes/1814174/-/maxw/960/-/113vafl/-/sgr.jpg)

The second issue is how the SGR is barricaded by electric fences on both sides where all locals can do it watch is swish by, looking at the rich who can afford the service while they remain locked out of any development that could have been brought to peri-urban and rural villages along the line. It should be noted that the poverty question is already negatively affecting the SGR. A few weeks ago, it was reported that have people have stolen materials worth KES 1.2 billion from SGR line in the last five months; the most targeted items are steel bars, electricals and signals facilities. It would be naïve to fail to consider that poverty is a motivating factor behind why individuals are stealing SGR components, presumably for resale. While I am not suggesting that such theft should be justified or enabled, the reality is that poverty is causing individuals to make that theft in the first place. It would be interesting to find out if the old railway line had/has the same problem; and if not, why not?

The third issue is that we have not unpacked how SGR will affect the trucker’s economy. To be clear, I am of the view that development should be embraced and potential game changers such as the SGR are important but there ought to be serious consideration given to the knock-on effects so that the economic station of Kenyans is improved, not compromised by new developments. It is estimated that an average of 4,000 trucks are on the roads transporting various goods in and out of the East Africa region. While the SGR will be important in decongesting Kenya’s roads and hopefully making the movement of goods cheaper, informal traders and small and medium enterprises (SMEs) will be hit. Those who will lose jobs include truck drivers (an estimated 8,000), and informal businesses and SMES who sell spare parts to, and repair and maintain trucks. All these Kenyans will lose their jobs or have their businesses negatively impacted. How will this be managed?

Image result for mama mboga kenya

(source: http://biznews.co.ke/2017/08/28/graphs-how-mama-mboga-butcheries-and-bakers-are-affected-by-the-plastic-bags-ban/)

So the question remains: Is the infrastructure we’re building pro-poor? Does it build or diminish commerce and trading activity along its path? Does it build or compromise income sources of the poor? Given the high levels of informality in business activity in Kenya, we ought to be cognisant of the effects of infrastructure built in a style that locks out indigenous enterprise.

The issues raised above are difficult with no easy answers but they are realities with which we have to grapple and resolve so that future projects avoid or address potential negative effects of new infrastructure development in the country.

Anzetse Were is a development economist; anzetsew@gmail.com

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