Public-Private Dialogue in Kenya

Public-Private Dialogue in Kenya

By

Emmanuel Lubembe, Secretary, Public Service Transformation, Office of the Prime Minister; Sarah Ochieng, Programme Coordinator, Private Sector Development, Public Service Transformation, Office of the Prime Minister; and Carole Kariuki, CEO, Kenya Private Sector Alliance

Presented at the Public-Private Dialogue 2010 Workshop

(Vienna, June 1-3 2010)

1- Background and Context

The Government of Kenya is committed to providing an enabling business environment which will enhance private sector growth and competitiveness that will contribute to the country’s medium and longer term objectives in line with Kenya’s Vision 2030. Vision 2030 aims at transforming Kenya into a rapidly industrializing and middle income country by 2030 through achieving and sustaining a GDP growth rate of 10% per annum from the year 2012 going forward. This ambitious growth rate relies on the private sector as an engine for economic growth and development.

Kenya has a very robust private sector which comprises several Associations and Business Member Orgnisations. To enable a structured engagement with Government where the private sector can speak with one voice, the private sector formed the Kenya Private Sector Alliance (KEPSA) which is the umbrella body for all Business Member Organisations and Associations. It was incorporated in August 2003 under the Kenya Companies Act (Chapter 486 of the Laws of Kenya) as a company limited by guarantee. The overall agenda of KEPSA is to provide “one voice” for the private sector to engage in public policy dialogue and hence influence public policy formulation. It therefore provides the framework for public-private partnership.

At the height of the post election violence in 2007 which had a detrimental effect on the economy, the private sector, through KEPSA, were instrumental in bringing the two parties together to start dialogue. This dialogue facilitated by the panel of eminent persons resulted in a power-sharing agreement, the creation of the post of the Prime Minister in 2008 and the formation of the coalition Government.

The coalition Government committed to the participation of stakeholders in decision-making in matters that affect their well-being and enhancing good governance. To enable this participation, there was need to create formal engagement structures and partnerships to facilitate the sharing of ideas, information and provide feedback and resources between the Government and its various stakeholders including the Public Sector, the Private Sector and Civil Society.

2- Status

In Kenya some form of PPD has been practiced over time. Lobby groups have been formed to advocate for specific issues with Government, employer organizations and manufacturers have traditionally partnered to develop strong positions for submission during budget consultations. However, in the past these engagement efforts have been weakly structured and poorly coordinated. With the advent of NARC Government in 2003 and the subsequent development of the Economic Recovery Strategy 2003-2007, special recognition of the role of private sector in development was made. In this light the Government established Ministerial Stakeholder Forums (MSFs) comprised of Non State Actors (NSAs) from the private sector, civil society, media as well as religious groups. The MSFs were to hold quarterly meetings with Government ministries where relevant issues are raised and addressed, however, some ministries have not fully embraced and institutionalised MSF due to lack of a clear institutional framework.

Soon after the establishment of the Office of the Prime Minister in 2008, the Government stepped up PPD with the launch of the Prime Minister’s Round Table (PMRT) with the private sector which takes place on a quarterly basis.

The Government of Kenya has since developed a draft engagement framework called the Public Sector Stakeholder Partnerships Policy (PSSP). The PSSP will guide how the government engages stakeholders; develops policy frameworks in collaboration with stakeholders; reviews existing laws to enable partnerships. PSSP will provide the framework for institutionalizing Public Private Dialogue including the structures from the central to the devolved levels of Governemnt.

3- Existing PPD Mechanisms in Kenya

1. Presidential Private Sector Working Forum - a forum where the President meets with select private sector representatives bi-annually to discuss the general economic climate in the country, as well as fast tracking private sector issues that have been agreed upon under the various fora.

1. Prime Minister’s Round Table (PMRT)–The Prime Minister together with several Cabinet Ministersmeet with several private sector players on a quarterly basis, to discuss the National Business Agenda (NBA); thematic issues and other areas of concern to the private sector and Government, and agree the way forward. This is the main PPD platform in the country.

1. Ministerial Stakeholders Fora (MSFs)–The line ministries meet with the various sector boards of the private sector. Meetings are held bi-monthly at the ministries, co-chaired by the minister and a member of the private sector.

1. Speaker’s Round Table Meetings - this is a recent development and it is aimed at creating a forum for the private sector to engage with the law makers to mainly participate in law formulation where possible through the Parliamentary Departmental Committees.

Prime Minister's Round Table

The Prime Minister’s Round Table (PMRT)is a high level consultative forum held quarterly involving Political Leaders from the Government and Chief Executives from both the public and private sectors. The PMRT introduced a more focused approach to PPD where discussions are now better structured, include relevant decision makers and are aimed at producing targeted results.

PMRT is coordinated through the Public Service Transformation Department in the Office of the Prime Minister.

PMRT Process

To guide the discussions at the PMRT, the private sector through KEPSA and Kenya Association of Manufacturers (KAM) developed the National Business Agenda (NBA) which lists the 11 priority issues which must be addressed in order to create an enabling business environment.

The PMRT process broadly follows the steps below:

1. Planning meetings which identify and put together issues for discussion
2. PMRT
3. Public announcement of commitments at a press conference
4. Further discussions through Ministerial Stakeholder Fora
5. Progress reports on the implementation of commitments including support to Ministries by the PMRT tracking team
6. Preparation of the quarterly progress report and planning for next PMRT.

The processes leading the PMRT are undertaken by a PMRT Planning Committee which comprises representatives from the Office of the Prime Minister, Ministry of Planning, National Development & Vision 2030, Kenya Investment Authority and the Private Sector. This committee is tasked with putting together a matrix of the issues for discussion. Each PMRT covers not more than four thematic areas which can be drawn from the NBA or any topical issues of the day that impact hugely on private sector.

Based on the issues identified, the relevant ministers, permanent secretaries and state corporation chiefs are invited to attend and they are required to come with the relevant technical people. The issues are sent to them in advance to allow them sufficient preparation time

The tables are structured around thematic areas with the Prime Minister and the Chairman of KEPSA chairing the table with the most contentious issue of the day and each of the other tables is co-chaired by the Minister most relevant to the issue and the Private Sector sectoral chair. At the end of the discussions, the government and private sector make commitments on the issues with clearly defined timeframes and responsible parties for the implementation of agreed reforms. The commitments are then made public by the Prime Minister at a press conference.

PMRT Tracking Team

An effective monitoring and tracking system is critical to ensuring that the government delivers on the commitments within the stated timeframes. This involves a structured engagement with the various Government ministries and agencies, including timely provision of the necessary support to speed up and realise the reforms.

The Office of the Prime Minister has put in place a monitoring and tracking mechanism which includes a tracking team comprising representatives from the Office of the Prime Minister, Ministry of Planning, Ministry of Finance, Kenya Investment Authority and the private sector. This team is responsible for doing the follow-up and supporting the ministries to ensure the commitments are being implemented in a structured and sustainable manner. Support to the ministries also includes the use of various Results Based Management tools such as the Rapid Results Initiative to fast-track the reforms pledged.

4- Results

Some of the key results that have been achieved as a result of the dialogue at the PMRT have been:

-The 24 hour operation of the port of mombasa which has had very positive impacts on Trade Logistics

-Refunds of Ksh 6 Billion (approx USD 75 Million) of Value Added Tax Refunds which was owed to private sector – this has released much needed capital.

-Signing of the bi-lateral agreement between Kenya & Uganda for the development of the new standard gauge railway line to Uganda.

-Development of an irrigation and drainage policy & water Master plan

-Reduction in the number of road blocks which were a very costly non-tariff barrier to the transporters.

-Establishment of a special tourism police department to ensure safety of tourists.

-As part of creating employment for the youth, 10% of the public procurement opportunities is now accorded to youth owned enterprises.

5- Challenges and WayForward

Challenges of PPD in Kenya

PPD in Kenya is not without its challenges. Some of the areas have been:

-Sometimes discussions have focused on operational issues as opposed to strategy and policy issues.

-The demands are still very one-sided with private sector not bringing much to the table but asking Government to put down a lot.

-Due to the complex political environment and the demands that come with it, it has been challenging to stick to the schedule.

-At the Ministerial Stakeholder Forum level, the success has very much deepended on the leadership on the ministry hence some are stronger than others.

Going Forward – PPD in Kenya and the Cluster Approach

Successive PMRT engagements have yielded impressive results but they have also drawn out the need to sharpen focus and alignment to national development goals and priorities. In this regard, the PMRT is exploring the adoption of a cluster approach as a new way of managing PPD and accelerating economic growth towards the achievement of Vision 2030. This approach is informed by global best practice and has received critical acclaim from reputable Institutions like The World Bank Group.

The Vision 2030 identifies Tourism, Agriculture, Manufacturing, Buisiness Process Outsourcing and Financial services as key sectors for economic growth within the first Medium Term Plan (MTP) 2008-2012. These sectors will be facilitated by among others Infrastructure, Energy as well as Science, Technology and Innovation (STI) industries. Consequently, effort has to be made to strategically realign key growth industries to Vision 2030. This calls for a paradigm shift in the management of PPD in Kenya to leverage key industrial growth sectors, exploit complimentarity, scale and unleash latent potential.

The PMRT consultations propose the adoption of cluster initiatives formed around key Vision 2030 economic growth sectors. These initiatives will be facilitated through a partnership between the public and private sectors. This partnership will establish a robust framework for support, coordination and consultation at all levels. It will include industry players ranging from big corporates to SMEs from the private sector and Ministry’s, regulatory agencies and service delivery institutions from the private sector. The cluster initiatives will benefit from technical support from International agencies such as The World Bank Group, Academic and Research Institutions. Each cluster will set long and short term goals and targets and pursue relentless implementation to deliver tangible results.

Authors’ Biographies

Mr Emmanuel Lubembe, Secretary, Public Service Transformation Department, Office of the Prime Minister, Government of Kenya

Mr Lubembe is the Secretary for Public Service Transformation Department which is mandated to reform public service institutions across Kenya and make them goal-driven, responsive and fit for purpose; and insitutionalise Results Based Management across the public sector. Mr Lubembe has been at the forefront of the reform agenda in Kenya since 1994 and has held several senior positions, including the position of Programme Director for Public Service Reforms from 2003-2008. Mr Lubembe is also the Manager for Goal 2 of the Private Sector Development Strategy for Kenya – the objective of the goal is to transform public service institutions for better service delivery to private sector; and to promote culture change in the relationship between the public and private sector. Mr Lubembe is the Coordinator of the Prime Minister’s Round Table meetings, including the development of the Public Sector Stakeholders Partnerships Policy and support to the Ministerial Stakeholder Fora. Mr Lubembe holds a Bachelor of Arts in Human Resource Management and a Master of Business Administration – Strategic Management.

Ms Sarah Ochieng, Programme Coordinator, Private Sector Development, Public Service Transformation Department, Office of the Prime Minister, Government of Kenya

Ms Ochieng holds a Master of Science in Biochemistry, a Bachelor of Science in Biochemistry, a Post-Graduate Diploma in Project Management and is currently studying a Master of Governance and Public Policy. Upon graduating Ms Ochieng worked briefly as an Assistant Lecturer at the Maseno University in Kenya. This followed by three years as a Business Development Manager for Volcanolive Pty Ltd – a volcano research, expedition and documentary making company in Australia. Ms Ochieng then joined the Public Service in Australia and worked in many project, programme and policyroles over several years in Queensland Government until end of 2007. In Australia Ms Ochieng was also a member of the Management Committee of the Gold Coast Region Information Technology Forum (currently Information Technology Gold Coast) from 2003- 2007 and held the position of Secretary from 2006-2007.In 2008, Ms Ochieng joined the Office of the Prime Minister in Kenyaas a Programme Coordinator for Private Sector Development & Stakeholder Engagement including coordination of activities of Goal 2 of the Private Sector Development Strategy, business environment reforms in Local Authorities and organisation of the Prime Minister’s Round Table meetings with the Private Sector.

Carole Kariuki – CEO of the Kenya Private Sector Alliance (KEPSA)

Carole Kariuki graduated with a Bachelor of Arts Degree from the University of Nairobi in 1998, with a specialization in Economics and Sociology. From there she went on to gain a Masters Degree in Public Administration and International Affairs at the Bowling Green State University in Ohio, USA, having been awarded a full scholarship. After a brief period in banking, she took up a position as Research Fellow and later Associate at the Sagamore Institute for Public Policy Research, a position she holds to date. Her work at the Institute led to a joint programme with Kenya Private Sector Alliance (KEPSA) in 2005 where she started as Programme Officer and later the Programme Manager. In 2008, she took a break from KEPSA and consulted for Africa Development Assistance to assist constituencies develop strategic priorities in development. She rejoined KEPSA in 2009 as the Programme Manager. Since then Carole has been fully involved in all aspects of the work associated with a private sector apex body: advocacy; programme development; partnership enhancement with development partners and business membership organizations; and resource mobilization. Carole was confirmed as CEO in January 2010, after a few months in an acting capacity. She is a member of the American Chamber of Commerce and the Lang’ata Rotary Club.

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