Fellow Kenyans,

I am very pleased to salute you on this auspicious occasion of our 46th Madaraka Day. This is an important moment when we remember the day Kenyans gained the status of internal self rule and management of the affairs of our country.

It is a day when we regained our dignity as a people free from nearly a century of colonial rule. The vision of our founding fathers was to create a just, united, prosperous and peaceful country; free of disease, ignorance and poverty. On this occasion, we reflect on the progress we have made in attaining that vision.

Fellow Kenyans,

We mark Madaraka Day at a time when there is need to be more strategic in our decision making due to the nature of the challenges we face. Globally, the financial crisis has slowed down the performance of economies across the world. Indeed, the growth of the world economy has dropped from 3.7 per cent in 2007 to 2.7 per cent last year.

Here at home, several external and internal factors have slowed down our economic growth from 7.1 per cent in 2007 to 1.7 per cent last year. These included post-election violence, high energy and food prices and adverse weather conditions. The consequence of this was reduced agricultural production and slump in earnings from tourism.

It is expected that the financial crisis will continue to negatively affect our economy through reduced demand for commodities we produce and a reduction in investment capital flows, official development assistance and diaspora remittances.

As we all appreciate, the economic slowdown we are experiencing has negative implications on the living standards of our people and especially on our efforts towards poverty reduction and employment creation. In spite of these indications, however, the prospects for our economy are not as bleak. Indeed, some sectors of the economy, particularly the manufacturing, building and construction have performed well.

Moreover, with sound macro-economic policies, as well as the reduction in the cost of fuel, agricultural inputs and other interventions by Government, our economy is projected to grow by between two and three per cent this year.

Though a modest growth rate, the projected improvement indicates the resilience of our economy in spite of enormous odds. Indeed, I am optimistic that we will soon have our economy back on the path of growth. But we must show our individual and collective commitment to growth at the family, community and national level. It is, therefore, incumbent upon every Kenyan to embrace hard work, remain determined and consistent.

Fellow Kenyans,

The key challenge we are facing, therefore, is the implementation of policies that will enable our economy to regain the growth momentum that we had achieved over the last few years. In this connection, my Government is focusing on fast-tracking the implementation of the first phase of VISION TWENTY THIRTY. In so doing, we will give priority to projects and programmes that are critical to the quick recovery of the economy.

Furthermore, we are making strategic interventions in all sectors with a view to addressing the issues of employment creation as well as elimination of absolute poverty. We will also continue to place emphasis on infrastructure development as well as increasing investments in the social sectors. These will widen economic opportunities for our people, especially the youth. In particular, my Government is implementing systematic measures aimed at ensuring our youth are gainfully employed. In this regard, we launched the Kazi Kwa Vijana Programme.

I am glad to note that most ministries have rolled out their Kazi Kwa Vijana Programmes countrywide and many of our young people have started benefiting from projects that are already underway.

So far treasury has already disbursed 3.4 billion Shillings to various line ministries for this financial year. An additional 6.6 billion shillings will be allocated in the coming financial year. We expect to generate 300,000 jobs from the programmes in the initial six months.

The Office of the Prime Minister has already formed a committee to harmonize, monitor and evaluate the efficiency of programmes. The Committee will also coordinate and oversee efficient use of funds under the Kazi Kwa Vijana programmes.

In addition to the Kazi Kwa Vijana, we have also taken steps to strengthen the Youth Enterprise Development Fund. I am glad to note that the fund has so far financed over 65,000 youth enterprises across the country to the tune of 2.3 billion shillings and created 200,000 new jobs. The aim is to increase the core funding to 5 billion shillings in Government funds over the next three years.

I wish to applaud the private sector, especially the banks that have also leveraged the Youth Fund with an additional 2 billion shillings. I thank them for showing confidence in the Fund and wish to salute the Kenyan youth who have shown that they can run successful enterprises. We have the duty to inspire the youth to embrace hardwork, patience, consistency and a sense of purpose.

Besides the youth, we have also stepped up measures to provide financial support to women. Towards this end, we have launched the Women Enterprise Fund to serve as a source of subsidized credit for business start-up and expansion.

I am glad to note that out of 1.2 billion shillings currently set aside for the Fund a total of 682 million shillings has been disbursed in loans to 92,000 women across the country. We will allocate another 500 million shillings for the Fund to bring the total available for women to 1.7 billion shillings.

I wish to make a special appeal to our youth and women to take advantage of the above efforts by Government and establish productive enterprises for their own benefit and the good of our nation.

In doing so, the youth and women will be well advised to adopt improved technology and join in the manufacturing of consumer products for the domestic and regional markets. Let our youth and women enter the modern textile sector for example, by making the numerous clothing products our people need for day to day use. I challenge you to come forward and engage in value addition of agro products and other goods that Kenyans and other people in the region use. The Market is wide and unlimited. Take advantage now.

Fellow Kenyans,

Beyond these efforts, my Government is implementing a number of multi-billion dollar infrastructure projects that will facilitate the creation of hundreds of thousands of jobs and stimulate numerous economic activities in all parts of our country. These projects include Special Economic Zones, starting with Athi River and Dongo Kundu in Mombasa , the construction of Lamu Port and Sudan-Ethiopia Transport Corridor and the new Standard-Gauge Railway line between Mombasa and Kampala .

Ground-breaking for most of these projects is expected to take place later this year and over the next two years. These new highways, railways, ports, power stations, oil and water pipelines, tourist resort cities, airports as well as business and technology parks will altogether create thousands of jobs and give a big boost to our economic growth. Indeed, I am happy to note that next week I will be officially launching the first undersea fibre-optic cable in Mombasa .

Fellow Kenyans,

Besides employment creation, there is urgent need for us to implement measures aimed at boosting agricultural production, particularly in the aspects related to food security in the country.

As we are all aware, our country received less than adequate rains this season. To end our vulnerability due to weather changes with regard to food security, the Government is implementing measures aimed at reducing our country’s over-reliance on rain-fed agriculture.

In the coming financial year, and over the next years, the Government will invest heavily in rehabilitating existing large-scale irrigation schemes such as Kano, Ahero, Mwea, Hola and Bura, Perkerra, Wei Wei and TARDA. We will also develop new schemes. These will include Kibwezi and Yatta irrigation schemes, the Lower Meru scheme, the Malindi and Tana Belt irrigation schemes, and Kimira Oluch in Rachounyo and Homa Bay , among others.

We have also begun the process of building a number of mega-dams in various parts of the country. These include Badasa Dam in Marsabit, Chemusu multi-purpose dam in Baringo, Umma Dam in Kitui, Kiserian Dam, River Nzoia Dam and Upper Ewaso Nyiro Dam. This will help us in the storage of water for irrigation and domestic consumption.

The Ministries of Water and Irrigation, Agriculture and Lands have been instructed to prepare a comprehensive irrigation development master-plan to ensure our country is less dependent on rain-fed agriculture.

However, as an immediate measure the government is determined to expand agricultural production by making fertilizer available to farmers at an affordable prize. The Government, together with related Government agencies, has imported fertilizer worth 9.7 billion shillings. This level of intervention by Government is unprecedented and shows our commitment to empowering the Kenyan farmer.

In the meantime, and due to the anticipated reduction in crop production, there will be need to have enough food stocks for emergency supplies to our people. Most of this food will have to be imported. I, therefore, direct the Ministry of Finance to extend the tax-free concessions for imported maize until the end of this year so that the private sector can continue to import affordable food.

For the most vulnerable individuals and communities facing famine, the Government will continue to mobilize resources to provide emergency feeding programmes for households. We will also support the school feeding programme in the hardship areas.

The Government will continue working with local and international non-governmental organizations and ensure that sufficient quantities of food are supplied. We will also improve on the distribution system so that food supplies can be extended to every point of the country.

I also wish to thank all individual and corporate citizens who have come to the aid of those in need of food. Your help has been in the true spirit of a working and caring nation.

The Government will remain sensitive and caring about all Kenyans, especially the underprivileged. We can only move the country forward when we reach out to each other and open up opportunities for the majority of our people.

Fellow Kenyans,

Following the post-election events of early last year, concerns have been raised that we have not made progress fast enough in the implementation of reforms.

However, I wish to assure Kenyans that since the signing and entrenchment of the National Accord in the Constitution and the establishment of the Grand Coalition Government, we have made significant strides in the past one year. These include:

1) Establishment of the Kriegler Commission and the subsequent implementation of its recommendations.

2) Establishment of the Waki Commission last July and several attempts to establish a local tribunal which will put an end to impunity. In this regard, consultations on various ways and options of implementing the report are still ongoing.

3) The Electoral Commission of Kenya was dissolved paving the way for electoral reforms, including the establishment of the Independent Interim Electoral Commission of Kenya and the establishment of the Interim Boundary Review Commission.

4) Legislation establishing the Truth, Justice and Reconciliation Commission has been passed by Parliament.

5) Commissioners in the National Ethnic Cohesion and Integration Commission are set to begin work.

6) Establishment of the Police Reforms Task Force to drive the process of transforming our Police Force into a police service.

7) Establishment of the Committee of Experts on the Constitutional Review to spearhead finalization of the review process.

These developments have paved the way for wide ranging political and social economic reforms. What is often not appreciated is that policy and legal initiatives take time to implement. They have to be agreed on by stakeholders while others require to be legislated by Parliament or require a comprehensive review of the Constitution.

By now, Kenyans are agreed that the most important reform we have to undertake as quickly as possible relates to the Constitution review. Now that we have the Committee of Experts in place, it is essential to move ahead without further excuses.

The Committee should now steer the review process in a non-partisan way and give Kenyans a draft that provides an appropriate, new framework of the Kenyan state. A constitution that ensures national cohesion, participation, inclusion and ownership. It would be best if the constitution will adequately serve present and future generations and withstand the test of time.

I am, therefore, appealing to the political parties and all Kenyans to desist from taking rigid and partisan positions so that we can get a new constitution within the next few months.

Fellow Kenyans,

Another aspect of major reforms my Government is undertaking concerns the judicial system. It has been said that justice delayed is justice denied. Therefore, there is urgent need to reduce the backlog of cases in our judicial system and deal with the issue of thousands of Kenyans who are unnecessarily held in remand for long periods of time. An efficient judicial system is a key pillar in our efforts to enhance security and human dignity, and security in our society.

To do this, funding for the judicial system, that is the Judiciary, State Law Office, the Police Service, and the Prisons Department will be substantially increased. Our objective is to have a sufficient number of judges and magistrates required to dispense with cases in a prompt and just manner.

More importantly, we must have sufficient numbers of investigating officers stationed throughout the country. No doubt, other aspects of reform in the judicial system will be implemented once recommendations of the relevant task forces are received.

One of the problems that the Government has been trying to deal with in the last six years is corruption. My Government established the Kenya Anti-Corruption Commission in an effort to deal with this social ill. There are hundreds of cases of corruption that are either in court or pending prosecution once investigations are complete.

I urge the Kenya Anti-Corruption Commission and the Attorney General as well as the Judiciary to move with speed and conclusively deal with these and other cases of corruption.

Fellow Kenyans,

A number of concerns have been raised over the state of the Grand Coalition. I wish to note that historically, coalitions face challenges whose solutions largely depend on the amount of patience, trust, confidence and focus on the common good. Our Grand Coalition is not different, though unique in several respects. Therefore, occasional disagreements should not be construed to mean that the country or Government is in a crisis.

I wish to assure Kenyans and our friends that the Prime Minister and I are determined to ensure that the Grand Coalition functions harmoniously. We are fully committed to faster and sustainable development, peace, unity and stability. These are the major pillars upon which the Kenyan people seek to build their nation. They define our freedom and democracy, the very foundation on which modernization and transformation will take place. Let us guard them jealously.

Fellow Kenyans,

I am saddened by the continued loss of jobs we are experiencing, particularly, with regard to formal jobs in the private sector. While we understand the difficult economic times we face locally and internationally, I want to appeal to all employers to be more innovative in overcoming the difficult times. I am directing the Ministries of Labour and Finance to consult with the Federation of Kenya Employers and Central Organization of Trade Unions on this matter.

There must be alternatives to laying off workers. We should be innovative and apply methods that will protect jobs.

The Government will also be conducting a national census beginning on the night of August 24th this year. I call upon all Kenyans to fully participate in this exercise that will provide critical information on the population for our development and planning purposes.

Turning to security in our country, I am concerned about the threats posed by organized criminal gangs, militias, commercial cattle rustling gangs and vigilante forces. If we are to create a modern society, we must decisively deal with these groups. This is the reason why our security forces are under strict instructions to deal firmly and swiftly with those who threaten the lives and property of our people.

Fellow Kenyans

The total effect of our development efforts will be rendered more effective when Kenya works within regional and international co-operation frameworks. Kenya will continue to work for full East African Integration. We shall also seek to strengthen free close trade within COMESA and the rest of Africa .

It is important at an occasion like this to point out that Kenya has the will and the capacity to protect her territorial integrity and the welfare of her people. But we must not be a nation of war-mongers but a land of people who cherish peace as an end in itself.

We seek to live in peace with all our neighbours. Nevertheless, we shall resist threats to our freedom and peace, and our security agencies have been detailed to deal firmly with threats from any quarters.

Finally, I want to assure you that while there are challenges that we face in our efforts to develop our nationhood, we must never be distracted in our path to becoming a just, democratic, working, caring and stable society. We must always have the will, focus and discipline to make the hard decisions needed to move us forward as a united country.

On this day when we are reminded of how we assumed responsibility for our own affairs 46 years ago, let us rededicate ourselves to assuming personal responsibility for national healing and reconciliation.

This great and beautiful land of Kenya belongs to us all. It has room for all; it binds us together as one people and one nation. Let us all - men and women, young and old, join hands together and live as one people, one nation and one Kenya.

ASANTENI NA MUNGU AWABARIKI