Your Excellency Jakaya Mrisho Kikwete, Chairman African Union and President of the United Republic of Tanzania,

Excellencies Heads of State and Government,

Distinguished Members of the A.P.R.M. Panel of Eminent Persons,

Ladies and Gentlemen,

I am indeed pleased to submit to your Excellencies the Kenya progress report on the implementation of the A.P.R.M. National Programme of Action covering June 2006 to January 2009.

Allow me, however, to begin by commending Your Excellency, Mr. Chairman, for your able stewardship of the African Peer Review Mechanism. I also pay tribute to the distinguished A.P.R.M. Panel of Eminent Persons for their invaluable contribution towards the achievement of the goals and aims of the A.P.R.M.

Indeed, I wish to note, with much appreciation, that the recommendations of the A.P.R.M. process in Kenya, particularly those touching on the key overarching issues, have become important benchmarks on which to asses our national needs and priorities.

Excellencies,
As will be recalled, we faced serious challenges after the December 2007 general election. The challenges underpinned the urgent need to address the underlying issues and to create a conducive environment for sustainable peace and stability as well as social progress now and in the future.

Towards this end, I established the Commission of Enquiry into the Post Election Violence and the Independent Review Commission on the General Elections held in Kenya on 27th December 2007. The purpose of these Commissions was to make recommendations that would enable us to lay a firm foundation for a stable and vibrant democracy in Kenya. I am gratified to note that these Commissions have since concluded their work and significant progress has been made in implementing their recommendations.

In addition to these Commissions, I am also happy to inform this forum that the Grand Coalition Government has fast-tracked the necessary legal and constitutional reforms that are required to ensure the future stability and development of our country. In this regard, Parliament has passed a number of crucial bills to which I have assented into law. These include:

" The Truth Justice and Reconciliation Commission Bill (2008)
" The National Ethnic and Race Relations Commission Bill (2008)
" The Constitution of Kenya Amendment Bill (2008)
" The Constitution of Kenya Review Bill 2008

I am optimistic that these laws and the implementation of the recommendations of the Commissions I have mentioned will go a long way in laying the foundation of a stable, peaceful and prosperous country.

I note that land was mentioned as a key issue in the A.P.R.M. Review of Kenya. Indeed, land was one of the underlying causes of the conflict we experienced early last year. To address this challenge, my Government has facilitated the preparation of a draft National
Land Policy through a very wide stakeholder consultative process. The policy aims at addressing land ownership, use, tenure and administrative systems in order to resolve the land problem in Kenya once and for all.

Excellencies,
Beyond political issues, we have also made progress towards addressing the economic challenges facing our country. As will be appreciated, we are not immune from the effects of the downturn in the global economy associated with the current global financial crisis. This has had serious implications on our own economy and the wellbeing of our people. More importantly, the crisis underlines the need to ensure that our people, especially the poor and vulnerable, are cushioned through well targeted policies.

In this regard, my Government is addressing the current food shortage as well as the high prices of basic foods as an urgent priority. So far, I have declared a national emergency in regard to the famine that has hit most parts of our country. We have also put in place both short and long term measures to ensure national food security. Some of the immediate measures we have taken include streamlining the distribution of maize in the country, the duty free importation of maize as well as utilization of our national strategic grain reserves to stabilize food prices.

In addition to food, my Government is also taking measures to tackle the high cost of energy to ensure that Kenyans pay fair prices for fuel and other petroleum products. Regarding the cost of electricity, my Government has reduced Value Added Tax on electrical energy and some types of diesel and residual fuel oils by more than half. We are also focusing on increasing the proportion of electricity generated from hydro and geo-thermal sources and improving the distribution of petroleum products.

Excellencies,
As regards macro-economic policies for sustainable development, we have continued to pursue sound policies which enabled our economy to achieve an impressive growth rate of 7 per cent in 2007, as envisaged in the NEPAD framework document of 2001. However, these gains were affected by the post election crisis and other factors and performance dropped to 4.5 per cent last year.

In spite of this down turn, I am optimistic that our economy will recover and achieve the growth momentum we had achieved in recent years. Indeed, my Government has developed VISION TWENTY THIRTY which outlines the policies we have to pursue in order to make Kenya a middle income country by the year Twenty Thirty. Moreover, we are implementing the priority policies covered under the NEPAD Framework document (2001) including infrastructure, human resource development, health, agriculture, science and technology. These sectors combined took the equivalent of about 63 per cent of the total budget in the financial year 2006/07 and 67 per cent in the financial year 2007/08.

Excellencies,
As part of our commitment to improved economic performance, my Government has stepped up measures to address corruption. In this regard, we have signed, ratified and adhered to various regional and international instruments on the prevention and elimination of corruption. Kenya has also established various institutions and developed legal frameworks to combat corruption. I am glad to note that the Kenya Anti-Corruption Commission and other Public Oversight bodies such as Parliament, Civil Society Organizations and the public at large are actively involved in the war against corruption.

On corporate governance, codes and standards of good corporate governance have been promoted, domesticated and applied in quoted companies, financial sector, cooperatives and state owned enterprises. I wish to note that the Kenyan corporate sector is not overly immune from the global financial turmoil being witnessed today.

In order to cushion the Kenyan economy, the Finance Act 2008/09 will enable the Capital Markets Authority to instill transparency in the fast growing collective investment vehicles, such as Unit Trusts and pension funds and ensure good corporate governance credentials in their operations.

Excellencies,
VISION TWENTY THIRTY recognizes that Small and Medium Enterprises are the engines of Kenya's economic growth, providing 50 percent of jobs and 60 percent of wealth creation. My Government is, therefore, keen on creating an enabling environment for the development of Medium and Small Enterprises. As part of this agenda, we enacted the Microfinance Act which has been operational since May 2008.

Moreover, we have established the Youth as well as the Women Enterprise funds as special funds for lending to the youth and women in business on concessionary terms. I am happy to note that these funds have increased credit availability to small and medium enterprises.

We are aware that youth unemployment remains a critical challenge. It is for this reason that my Government established a revolving Youth Fund of One Billion Kenya Shillings in 2006/2007, to enable the youth to access capital for investment. This fund was increased to 1.25 billion in 2007/2008 and further increased by 500 million shillings in the current financial year. Through this fund, young people have been enabled to start their own businesses, create wealth and generate employment for other young people. Under the Youth Enterprise Fund we have created 200,000 new jobs.

Following success of this government initiative, the private sector has now come on board to supplement the program. I am glad to note that the Youth Enterprise Fund has signed a Leverage Financing Partnership with four commercial banks that will increase the funds available for onward lending to the youth by a further 2.5 billion Kenya Shillings.

Turning to the socio-economic sphere, the key priority of my Government as spelt out in the VISION TWENTY THIRTY is to promote equity and socio-economic development through strategies aimed at leveling the playing field for all Kenyans. The goal is to increase access to opportunities for all, especially the disadvantaged groups, through employment, empowerment and improving access, affordability and quality of social services.

To this end, we have increased funding to core poverty programmes to ensure that they are funded sufficiently and predictably. Furthermore, the implementation of a number of targeted fiscal interventions, structural reforms and regional development initiatives aimed at reducing poverty and inequality are ongoing.

Excellencies,
On the issue of gender development, my Government has endeavoured to ensure that women are appropriately empowered in line with the A.P.R.M. recommendations. To this end we have taken a wide range of measures including

a) Establishing a 2 billion Kenya Shillings Women Enterprise Fund;
b) Executive Directive requiring that women form 30 per cent of all newly recruited public servants,
c) Enactment of the Sexual Offences Bill into law in July 2006,
d) Expanding opportunities for women through devolved funds such as the Constituency Development Fund, Constituency Aids Fund, Constituency Bursary Fund and Local Authority Transfer Fund, among others.

As regards infrastructure development, Your Excellencies, and in line with the A.P.R.M. National Programme of Action, a Road Sub-sector policy and Investment plan 2007-2020 has been developed. In this policy, we are giving priority to the construction and rehabilitation of main international and national transport corridors as well as roads serving key tourist destinations.

We have also unveiled plans seeking to install a standard gauge railway line from the Port of Mombasa to most of the landlocked countries in the Eastern Africa region. This will create a railway network traversing and inter-linking nations in the Great Lakes region including Uganda, Southern Sudan, Democratic Republic of Congo, Rwanda and Burundi through to Ethiopia.

Before I conclude my remarks I wish to assure members of this forum that the Grand Coalition government that we set up last year is working well for the Kenyan people. The Grand Coalition government also remains firmly committed to the faithful implementation of our national commitments under the A.P.R.M.
Thank you and God bless you all.