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PP RUEHWEB

DE RUEHNR #2506/01 1661017
ZNR UUUUU ZZH
P 151017Z JUN 07
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 0421
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS NAIROBI 002506 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR AF/E, AF/RSA, AF/EPS, INL-C-CP 
DEPT PLEASE PASS USTR WILLIAM JACKSON 
TREASURY FOR VIRGINIA BRANDON 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PGOV KCOR ECON EINV EAID ELAB KE
SUBJECT: Kenya Improves Governance and Public Services 
 
 
SENSITIVE BUT UNCLASSIFIED.  FOR USG USE ONLY. 
 
¶1. (SBU) Summary: Stung by a series of reports showing poor public 
services and governance, and recognizing that improvements were 
needed to boost investment, economic growth and job creation, the 
GOK has used Results Based Management (RBM), performance contracts, 
and a Rapid Results Approach (RRA) to make significant progress. 
The GOK is also implementing policies to promote gender equality in 
the civil service.  The UN gave Kenya a Public Service Award for its 
use of performance contracts, and President Kibaki hosted an awards 
ceremony to highlight the best performing GOK agencies.  USAID is 
implementing the $12.7 million Millennium Challenge Account (MCA) 
Threshold Program to reduce corruption in the GOK's procurement 
process, with initial emphasis on the health care supply chain. 
Kenya, however, still has to make major improvements in governance 
and public service delivery, including building capacity at the line 
ministries responsible for infrastructure, to achieve President 
Kibaki's 10% growth goal by 2012 -- and to become a full 
MCA-eligible country.  End Summary. 
 
Results Based Approach to Governance 
------------------------------------ 
 
¶2. (U) In September 2004, the Government of Kenya (GOK) adopted a 
Results Based Approach (RBA) to improve the quality of public 
service.  A GOK circular of April 6, 2005 required GOK agencies and 
parastatals to implement a Results Based Management (RBM) system, 
using the Rapid Results Approach (RRA) as a tool that several 
ministries had already successfully pilot-tested.  GOK agencies have 
applied the RRA methodology through 100-day initiatives commonly 
referred to as Rapid Results Initiatives (RRI) that have improved 
governance and the business environment.  In 2006, the GOK also 
began requiring all 38 ministries, 130 state corporations and 135 
local authorities countrywide to sign performance contracts, and 
publicly rated agencies on their achievements at the end of the 
year.  The GOK efforts promoting performance-based contracts and the 
RRI are both components of the Public Service Reform program the GOK 
began in 1993, but deepened in 2004 with the appointment of a 
Permanent Secretary to spearhead the reform. 
 
Kibaki Names and Shames Performers 
---------------------------------- 
 
¶3. (U) On December 8, 2006, in a public ceremony at the Kenyatta 
International Conference Centre with all ministers and heads of 
public agencies and state corporations present, President Kibaki 
officially released the Performance Evaluation Results for Public 
Agencies.  The evaluation was done by private consultants, who 
measured agencies' performance against the performance contracts 
they signed in 2005 to improve delivery of public services.  Stating 
that public service is the key driver to national development and 
economic performance, President Kibaki handed out trophies to the 
highly rated Ministries (Agriculture, National Heritage, and 
Tourism), and scolded the poor performers (Housing, Attorney 
General, Ministry of Foreign Affairs, and the Vice President's 
Ministry of Home Affairs).  The best parastatal was Kenya Seed 
Company, while the worst were two sugar companies and TelKom Kenya. 
 
Improvements Achieved and Recognized 
------------------------------------ 
 
¶4. (U) Since the launch of the reform initiatives, key achievements 
include reducing the time to receive a passport from 40 to 20 days, 
a birth or death certificate from 14 to 5 working days, and to 
register a company from an average of 60 days to 14 days.  The GOK 
also terminated three hundred business licenses or fees to cut red 
tape for the private sector. 
 
¶5. (U) In April 2007, the Head of Kenya's Public Service issued a 
circular directing all GOK agencies to implement RRI to expedite the 
achievement of national goals and priorities.  Those institutions 
that have already implemented RRI must scale it up and those not on 
RRIs must launch them by the start of the fiscal year on July 1. On 
May 24, the UN announced that it had given a Public Service award to 
Kenya's Performance Contracts Steering Committee Secretariat for its 
use of Performance Contracts to improve transparency, accountability 
and responsiveness in the public service. 
 
Public Service Gender Balance Initiative 
---------------------------------------- 
 
¶6. (U) A Presidential directive last year requires at least 30 
percent of vacancies in the public service, including in 
government-owned corporations, to be filled by women.  The Public 
Service Commission and the State Corporations Advisory Board are 
 
monitoring the implementation of this directive.  For example, in 
the recent recruitment of District Officers, women make up 100 out 
of the total 300 recruits. 
 
MCA Public Sector Procurement Reform 
------------------------------------ 
 
¶7. (U) Major corruption has long marred Kenya's public procurement. 
The critical problems identified by the 2005 joint GOK/EU review of 
Kenya's procurement systems included weak oversight institutions, a 
lack of transparency, poor linkages between procurements and 
expenditures, delays and inefficiencies, and poor records 
management.  USAID is implementing the $12.7 million MCA Threshold 
Program to overhaul the public procurement system, with initial 
emphasis on the health care supply chain.  As a leading donor in 
both the Public Financial Management and Health sectors, the USG is 
well placed to extend procurement reform efforts to improve 
management of public health resources.  USAID coordinates the 
Threshold Program with the GOK's Public Financial Management reform 
strategy and with joint GOK-donor reform efforts in the Health 
sector. 
 
¶8. (U) The goal of the MCA Threshold Program is to improve Kenya's 
control of corruption by reducing opportunities for corruption among 
public officials.  It will empower the Government to curb corruption 
more effectively by establishing the Public Procurement Oversight 
Authority as an anti-corruption institution and improving supply 
chain management to reduce leakage in the health sector.  The Kenya 
Threshold Program will: 
 
- Strengthen the capacity of the newly created Public Procurement 
Oversight Authority to implement the GOK's new procurement 
regulations through enhanced technology, exchange programs, and 
training of staff; 
 
- Develop and roll out an e-procurement system in five key 
ministries - Office of the President, Education, Roads and Public 
Works, Energy and Health; 
 
- Develop and implement new procurement regulations and guidelines; 
and, 
 
- Institute proper records management protocols for public procuring 
entities. 
 
Challenges Remain 
----------------- 
 
¶9. (SBU) Despite these accomplishments, serious challenges remain. 
Schools and vocational training facilities cannot meet the demand 
generated by the Government's decision in late 2006 to make primary 
level education free.  The Government has plans to do the same for 
secondary level education this year.  The GOK legally established 
the Public Procurement Oversight Authority by gazetting the 
regulations on January 1, 2007, but the Advisory Board is not yet 
formally established.  The GOK plans to gazette an Interim Advisory 
Board in June with all the powers of the Advisory Board, except to 
hire the permanent DG, after it finishes vetting the appointees and 
Parliament returns from recess. 
 
¶10. (U) The Ministry of Finance's Public Expenditure Review (PER) 
2006 noted serious weaknesses in the budget execution and asked all 
implementing agencies to urgently address institutional and human 
capacity bottlenecks. 
 
Comment 
------- 
 
¶11. (SBU) The GOK's use of Results Based Management, performance 
contracts, Rapid Results Approach and the promotion of gender 
balance has led to improvements in governance and public service. 
Congratulations are in order.  However, the process is starting from 
a low base, and is still in its early stages.  Fourteen days to 
register a business still compares poorly with many other countries, 
and nearly one thousand business licenses and fees remain to be 
consolidated or terminated.  It is also likely that GOK agencies 
will try to set lower goals in their next round of performance 
contracts to ensure success.  Kenyans and the private sector welcome 
any improvements in public service performance, especially in 
procurement and anti-corruption.  However, donors and Kenyan 
watchdogs will have to continue monitoring the process closely to 
keep the process on track and prevent backsliding.  End comment. 
 
RANNEBERGER