Governance Strategy Paper for Building a Prosperous Kenya 2006

Abstract

The performance of the Kenyan economy deteriorated markedly in the 1980s and 1990s, with growth falling below its potential. A number of factors contributed to this poor performance, including external shocks and broad-based decline in productivity of investments, near collapse of physical infrastructure and inefficient use of public resources. These problems were compounded by serious weaknesses in institutions of governance, which undermined competitiveness as well as investor confidence in Kenyan economy. The failure to generate adequate economic growth led to increased unemployment, poverty and worsening in almost all social indicators. To address these economic challenges, NARC government (NARC) set out an ambitious and comprehensive programs of economic renewal under the Economic Recovery Strategy (ERS) with emphasis on policy and institutional reforms. The strategy is aimed at: (i) accelerating sustained economic growth underpinned by stable macro-economic environment; (ii) enhancing equity and poverty reduction to improve the welfare of Kenyans; and (iii) improving governance to ensure efficiency and effectiveness of public service delivery and to create an enabling environment for sustainable business growth and development.