By Dr DANIEL GITI

The Cabinet Secretary for the National Treasury has rightfully acknowledged the shrinking of the traditional ways of budget financing and as such, the public sector alone cannot fund Kenya’s economic transformation. It is important to put things into perspective from a global to local point of view. 

The United Nations Sustainable Development Goals (UN SDGs) Report 2025, which provided the tenth annual stocktaking of global progress toward the 2030 Agenda for Sustainable Development delivered a stark assessment: the Sustainable Development Goals have improved millions of lives, but the current pace of change is insufficient to fully achieve all the goals by 2030. 

UN SDGs, adopted by the United Nations in 2015, is a set of universal agenda of 17 goals aims at ending poverty, reducing inequalities and promoting inclusive and environmentally sustainable growth by 2030. Achieving these goals requires massive investments, estimated in trillions of dollars annually, which many governments cannot mobilize on their own because of a myriad of issues and challenges, including financial crises, which have increased since the first recorded financial crisis in 33 BC in the Roman empire.

The Kenya Vision 2030, which was launched in June 2008, is the long-term development blueprint for the country, whose aim is to create “a globally competitive and prosperous country with a high quality of life by 2030”. It seeks to transform Kenya into “a newly-industrializing, upper middle-income country providing a high quality of life to all its citizens in a clean and secure environment".

Kenya Vision 2030 is implemented through 5 year successive Medium-Term Plans (MTPs) and since the introduction of Counties, the MTPs are also supported by the County Integrated Development Plans (CIDPs). MTP I 2008-2012, MTP II 2013-2017, which was supported by CIDP I; MTP III 2018-2022 and CIDP II; MTP IV 2023-2027 and the CIDP III, which is also linked to the BETA and last of the Vision MTPs before transition to next vision.

To finance the 17 UN SDGs, end extreme poverty, provide safe space for all to live, enough to eat and sense of security, the world needs to address financing gap of $ 4.3 trillion every year. This need is a drop compared to the global wealth estimated at $ 450 trillion. The Kenya Vision 2030 development blueprint requires KSh. 60 trillion or $ 470 trillion to be fully implemented of which MTP IV requires KSh. 15.3 trillion. 

A typical CIDP funding in a county would require 90 to 200 billion over five years in a county, which would translate to 5 to 8 trillion shillings in the whole country (47) counties in five years. Many counties cannot fund their CIDPs internally hence may require external and leveraging of Public Private Partnerships (PPPs) because they would face a 30 to 70 percent shortfalls in financing their CIDPs.

The design of the Kenya Vision 2030 is that 70% should be financed by the private parties and 30% by the GoK.  Financing the UN SDGs, the Kenya Vision 2030 and CIDPs aspirations is not a question of availability of capital but that of aligning these aspirations with countries/counties sustainable development targets and priorities.  

A 2022 report of the SDGs implementation showed that private players contributed less than 20% of the financing despite massive requirements from this sector, and the same is true for Kenya Vision 2030. The challenge for UN SDGs, Kenya Vision 2030 and CIDPs implementation is devising win-win paradigm shifts between public and private players and PPPs/partnerships/collaboration becomes the only viable option.

There is consensus that public and private entities are no longer competitors, but strategic partners in development. This is evidenced by their long tradition of collaboration in funding many ventures both locally and globally. The private sector success and growth depends on a stable and predictable business environment; access to finance; robust infrastructure; and a focus on innovation and competition. 

A thriving private sector is crucial for achieving the Kenya Vision 2030's objectives and fostering sustainable wealth creation because of six major reasons. First, the private sector is a major driver of the much desired and sought after economic growth, with a significant portion of Kenya's Gross Domestic Product (GDP) originating from private sector activities. This is the reason there is need for increased access to credit for private sector businesses which is necessary to fuel real GDP expansion by enabling them to innovate, expand, and compete effectively. Secondly, the private sector is a primary source of employment in Kenya, creating numerous job opportunities and contributing to the overall labor market.

Thirdly, the private sector's investments in various industries, from agriculture to manufacturing and finance, drive innovation and technological advancements, which in turn lead to increased productivity and economic growth. 

The private sector is key to the realization of the Kenya Vision 2030 development blueprint and the CIDPs, which is heavily reliant on the private sector's ability to generate wealth and create employment opportunities. Fourthly, a healthy private sector contributes significantly to the government's revenue collection through taxes and other economic activities at a time when government faces a limited and constrained tax expansion base and options. Fostering a supportive environment for private sector growth is crucial for increasing tax revenue and other growth aspects, including financing of projects as noted by the World Bank in 1993 in the “enabling markets to work” strategy that calls for greater divestiture of government from some projects. 

Fifth, private sector plays a vital role in developing local markets by investing in distribution networks, market research, and product adaptation and through understanding and catering to the needs of local consumers, they can create sustainable demand for goods and services, driving economic expansion. 

Sixth, the government and the private sector can collaborate on various projects, such as infrastructure development, to leverage the private sector's expertise and resources. Public-Private Partnerships (PPPs) can help address infrastructure challenges and promote economic growth. Kenya has a robust PPP framework, including the PPP Act, 2021 and the PPP Directorate based at the National Treasury hence the country should leverage on the concept to accelerate development. 

Dr Giti is an urban management, public - private partnerships (PPP) and environment specialist.

 @danielgiti