For real estate, devolution is goose that lays golden eggs


In September 2015, Turkana County, one of the most far-flung and remote regions in Kenya, got its first university. The imposing, red-roofed building on the Lodwar-Lokichar Road by Mount Kenya University stands out like a diamond in the rough.

Travel to Mandera Town and chances are that you will spend a night in a newly-built hotel that can sit anywhere else in “Kenya” – as the locals here refer to the more developed parts of the country.

Although such new developments belong to private institutions, the university is a clear testimony to how devolution has opened up once remote areas.

While the national government has been on the receiving end for what the opposition describes as “lack of willingness in transferring enough funds” to the counties, devolution has no doubt made a significant mark as far as building of new infrastructure is concerned.

The influx of government workers in rural areas has opened opportunities for investments in the housing and hospitality sectors.

So significant is devolution that it is one of three pillars of World Bank’s new Kenya Country Partnership Strategy for 2014-18. The bank targets investments of up to $4 billion (Sh415 billion) during the five-year implementation period.

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“Kenya’s decentralisation is among the most rapid and ambitious devolution processes going on in the world, with new governance challenges and opportunities as the country builds a new set of county governments from scratch,” says the report.

Land is one of the key resources that counties have leveraged on to spur growth in the devolved units. It has also been one of the bones of contention between counties and the national government.

According to the Institution of Surveyors of Kenya (ISK) chairperson Stephen Ambani, devolution has hastened the country’s development, especially through proper use of land.

Ambani says the land laws enacted in 2012 were supposed to guide land administration in the country as they spelt out the roles of both levels of government in land matters.

But he says the “teething” problems that were identified early on have persisted to date.

“The laws stated what constituted public, private and community land and how each segment was to be administered. A number of functions such as physical planning and land survey are supposed to be handled by the county governments. However, I would put compliant levels to these laws at 50 per cent. It is a work in progress that can take up to 10 years to level out,” he says.

For example, Ambani says there are times ISK has approached the Council of Governors on matters concerning community land which is under the custody of the counties only to be told to consult the Lands ministry “as they are the ones who deal with land matters”.

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It becomes complicated when some regulations come into conflict with the stated objectives. Ambani says that while community land is held in trust by the county on behalf of residents, harnessing of mineral wealth on the same land is the prerogative of the national government.

Revenue sharing

A case in point is the recent altercation between President Uhuru Kenyatta and Turkana leaders over the sharing of oil revenues from the county.

“We have to understand that in Kenya, everyone is learning to deal with oil as a source of revenue for the first time. That is why there are varied views on what the oil will do for Kenya, and Turkana in particular. We are literally sitting on trillions of shillings should all the oil be exploited. If handled well, the new resource is capable of lifting the people of Turkana from abject poverty that they have known since time immemorial,” Turkana governor Josphat Nanok told The Standard in March this year.

The coming of the counties also meant laws had to either be amended or new ones enacted that elevated the status of the new county headquarters. Most of the towns that are now county hubs could not qualify to be municipalities. Most were administered as town councils, a status that suppressed their growth.

Under the Urban Areas and Cities Act of 2011, county headquarters can now plan for accelerated growth through an integrated urban area development plan.

A town like Wote in Makueni County, for instance, was governed through the town council arrangement. With the advent of devolution, however, it acts as a municipal with full powers to lay down a development framework that includes guidelines on land use management.

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The new status means the counties can enter into direct engagements with investors willing to buy land for home construction or agricultural purposes.

In October 2015, HF Group signed a memorandum of understanding with the Kakamega County to put up 1,000 housing units. In the deal, HF Group undertook to provide all requisite development financing required. Its banking subsidiary HFC was to finance all mortgages while providing banking services to the county government staff.

On its part, Kakamega County was to provide land to facilitate the construction of the staff houses.

With the foundation already laid, experts hope the coming five years will fully anchor devolution as the vehicle for realising growth throughout the country.

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