Oparanya raises alarm as regional blocs fizzle out
New Devolution Cabinet Secretary Charles Keter has a challenging task to ensure that the counties’ much-hyped regional economic blocs succeed so that they can leverage economies of scale.
Despite promise by national government to support performance of regional blocs and county integration efforts by formulating supporting legal frameworks, almost three years later nothing much has been achieved.
It is a major concern expressed by the 14 county governments that form Lake Region Economic Bloc (LREB) that is currently facing a cash crisis due to limited funding by the member counties.
Several projects lined up to be jointly undertaken by the bloc are either in limbo or have been suspended as the bloc awaits formal legislation to legalise its activities.
The bloc’s members are Kisumu, Kakamega, Siaya, Homa Bay, Migori, Kisii, Nyamira, Bomet, Kericho, Nandi, Busia, Bungoma, Vihiga and Trans Nzoia.
Speaking to Business Hub, LREB chair and Kakamega Governor Wycliffe Oparanya disclosed that their hands are tied and a number of viable projects, they targeted to implement before 2022 cannot take off.
“This is because we were told to wait until a legislation is enacted to formalise counties engagements in the bloc including transfer of cash to the LREB kitty,’’ he said.
Oparanya spoke amid revelations that some LREB member counties have allegedly withdrawn from funding the bloc’s activities until legislation is passed to formalise the transactions undertaken by the alliance.
Last year, outgoing Devolution CS Eugene Wamalwa told Oparanya that the State was fast-tracking legislation governing regional blocs.
Wamalwa reassured the governor that once LREB is legalised, it would be easier for member-counties to know the parameters of engagement.
Already, the LREB Act which creates the economic zone has been drafted and given to the Attorney General’s Office for ratification.
The Act stipulates that “an agreement shall become binding and effective when ratified through the enactment by at least a third of the bloc’s assemblies.’’
Wamalwa, Oparanya said, had assured the Council of Governors that draft regulations were ready and would be taken to the National Assembly and Senate for final debate and approval.
But two years down the line, he added, the promise remains a pipe dream as cross cutting projects lined up at the LREB await the legislation, with leaders in the bloc also developing cold feet towards the noble idea.
This is because the central government is constitutionally mandated to formulate national policy for implementation by both levels of government.
Keter therefore takes over at Devolution at a time when the ministry is still pursuing a national policy on regional blocs which were seen as the new engines of transformation that would accelerate development.
There are economic blocs established so far by the counties include: the LREB, North Rift Economic Bloc, Central Kenya Economic Bloc, Jumuiya ya Kaunti za Pwani, South Eastern Kenya Economic Bloc, Frontier Counties Development Council and Narok-Kajiado Economic Bloc.
Several projects mooted by LREB, for instance, have stalled due to lack of regulations on formation and operation of regional economic blocs.
Top among them is the Sh2.8 billion regional bank whose future now hangs in the balance even after some of the 14 member counties contributed millions toward the initiative, while others were still cagey to do so.
The counties banked on the regional bank to avail low interest loans to support small and medium enterprises to spur the regional economic growth.
According to LREB’s chief executive Abala Wanga the development bank concept was designed to provide medium and long-term capital for productive investment, including infrastructure projects.
Each member county was to contribute Sh200 million each toward the bank project. The project was one of key economic pillars for the region.
Besides the projects, operations at the LREB Secretariat in Kisumu have also been greatly hampered by lack of funds.