Kisumu to raise Sh1bn through bonds to fund infrastructure development

Kisumu County is set to float bonds in the stock market to finance its infrastructure development.

Kisumu Governor Anyang' Nyong’o says his administration is seeking to raise Sh1 billion from the county bond that would be used to fund a range of development projects.

Earmarked for funding under this arrangement are agricultural projects, natural resources, improvement of health infrastructure, financial services and the Blue Economy.

But that will be if the county government gets requisite regulatory approval from the National Treasury, Commission on Revenue Allocation and Capital Market Authority.

Credit rated

“Having been credit rated alongside Makueni and Bungoma, we feel it is time to market Kisumu," said Prof Nyong’o during the launch of a three-day Kisumu Investment Conference at Ciala Resort.

 The ratings by the South Africa-based Global Credit Rating Company (GCR) makes Kisumu creditworthy to access borrowing through the Nairobi Securities Exchange and external markets.

 The governor observed that counties were struggling to allocate funds for development amid huge expenditures on wages and low revenue collection.

 "From the Treasury, we are getting very little money to build infrastructure and offer social services to our people," he said.

He said the conference is meant to show Kisumu’s economic potential to the world.

He urged the national and county governments to embrace creativity and resilience in the fast changing world. Prof Nyong’o said the Public-Private Partnerships (PPPs) cannot be wished away.

Investment destination

"Kisumu is an investment destination of choice, a frontier market with very many low-hanging fruits especially under the PPPs," he said.

 Capital Market specialist James Moria said raising capital through bonds is the way to go.

 "We are doing a similar thing in Laikipia County by raising Sh1.2 billion for infrastructure development.

 In July 2019, the Commission on Revenue Allocation (CRA) began evaluating the credit risk of counties with a view to clearing them to float bonds to fund projects.

 The revitalisation of the Kisumu Port will open more investment opportunities in the Lake region’s Blue Economy.

 "The rationale for investing in Kisumu County has been well documented over recent years given its geographical advantages. This has made it popular with all categories of investors," said Prof Nyong’o.

 He said the harbour has been dredged and can now accommodate bigger ships.

The government has established a shipyard to be managed by the Kenya Shipyard Agencies. Prof Nyongo said that new vessels will be acquired to supplement the services being offered by Kenya’s wagon ferry- The MV Uhuru.

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