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Cablegate: Kenya Improves Governance and Public Services

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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

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