Lake Region Economic Bloc, (LREB) have agreed to buy an existing bank start a regional Bank for the bloc as one of its inaugural flagship projects.
Already, LREB members have agreed to pay Sh200 million each toward this initiative, totalling to Sh2.8 billion, the bloc's Chairman Wycliffe Oparanya has disclosed
''It is easy and faster to buy an existing bank that start a new one. Some of these micro finance banks operating capital are within the range of Sh10 billion,'' he argued.
Rather than start a whole processing of establishing a new one, the LREB member counties were of the common opinion that, ''We buy an existing bank,'' Oparanya said
LREB members have met and given priority to the flagships projects, they intend to undertake, with the establishment of the regional bank top on the list.
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The second flagship project is revival of the sugar and tea industry sectors, while the third is Maritime transport in the lake and conservation of the Mau forests.
''These flagships projects were identified and agreed upon by LREB members by pulling synergies to harness and tackle our economic woes,'' he said
The developments comes at a time when the devolved units treasure their independence to harness its unique challenges to improve the lives of their people.
Currently, LREB has generated a Bill which is being discussed by the 14 County Assemblies in the regions, to allow governors commit millions to the LREB projects.
The Assemblies are debating the LREB bill seeking to legalize and ratify the establishment of the secretariat and it’s lined up capital projects.
But the Sunday Standard, established that 14 counties that make up the bloc have agreed to pay Sh2.6 billion to set up a regional bank, except Homabay County.
Homa Bay Deputy governor Hamilton Orata disclosed that they had contributed Sh50 million toward the bank.
Orata argued that there was no single individual who could prosper economically without support of a financial institution, yet the MCAs are reluctant to endorse Sh200 million.
''The banks idea is in line with the big four development agenda President Uhuru Kenyatta is advocating for,” said Orata.
Oparanya asked Homabay County members to approve another Sh150 million to Fastt rack formation of the bank. But it elicited mixed reactions.
Some of the MCAs who expressed worries that the idea, albeit good, should not be expeditiously undertaken.
MCA for Peter Kaula from Wang chieng ward in Karachuonyo and Walter Muok, sparked the debate when they asked the governor to leave Homabay County the out of the deal
They claimed Homabay county, was still behind in development and that committing sh200 million for LREB flagships was going to eat into their development budgets.
Nicholas Owaka who is the budget Committee Chairman asked the LREB members to allow them contribute the money towards the LREB flagships projects but at their pace.
''Sir, we have ward projects which needs to be developed.The developments requires hefty funding, and we fear we could fall short of the appropriated budgets,’’ said Owaka.
But there was imminent sharp divisions of the MCAs with some agreeing that LREB policies and bank concept was brighg to effect, but would need to be done gradually.
MCA for Rusinga Island, Okuku Miregi also waded into the debate calling for a careful approach to appropriation of budgets by the counties towards the LREB flagships.
In a candid interview with Kakamega governor who chairs the bloc, disclosed that so far all the 14 counties have signed the deal to pay the money money to buy a bank.
''This money is being deposited in a special account which we have opened at central bank of Kenya on the advise of controller of budget and Auditor General,'' he explained
In the LREB member counties agreement, the cash was to be deposited in a special account and consented by Central Bank of Kenya- as the depository agency.
The governor said LREB will not access the money until such a time when all of them shall have been contributed to the kitty so that it is drawn once and used where planned
The regional bloc includes Kisumu, Kisii, Siaya, Migori, Homa Bay, Vihiga, Kakamega, Nyamira, Bomet, Busia, Bungoma, Kericho and Trans Nzoia counties.
He said no county will be forced to join or pay. ''It is a coalition of the willing. We will only work with those who share same ideal. Others will join at their own time,''he said
Already, even more counties were expressing interest to join such as Narok. ''We are serious and I have never seen such a strong commitment from governors,'' he said
LREB was launched in 2013 to form a single market and enable transfer of technologies across borders to improve productivity and quality of goods to hasten economic growth.
Oparanya said the LREB bloc, will see the 14 counties share common plan on infrastructure such as roads and other line projects that cut across their borders.
Its other priority is anchored on industrialization, health, tourism, financial services, education water and resource management, infrastructure and ICT.
Each county heads a pillar superintended by another and each has seconded a staff at the LREB secretariat whose Chief Executive is Mr Abala Wanga.
Oparanya disclosed that the LREB which is fashioned on the model of Brazil, Russia, India and China (BRICs), which are at par with advanced economic development.
World Bank, he said, is already willing to support the establishment of the regional bank, which is targeting to support the micro finance sector.
But World Bank has issued an ultimatum that LREB must set up a fully-fledged and running secretariat including a clear blueprint and the regional bank to get to be funded.
Kisumu, the host county has already donated an office space where the 14 member counties have seconded staff to commence operations.
President Uhuru Kenyatta officially launched the regional economic blocs concept a kin of the BRICs and European Union (EU), during the Council of Governor’s meeting in 2015.
One of the key aims of LREB is to leverage the economies of scale on investment conference, so that instead work as a bloc.
Kisumu Senator Anyang’ Nyong’o argues that the Lake Basin Economic Form will be an important catalyst for the 14-member counties.
It will create linkages for economic sub-sectors and promote collective voice on trade.
''Establishing a single market, is the first significant step towards full economic integration,This is what LREB aims to achieve in the ultimate end,'' said Wanga.
But this will only occur when member countries trade freely in all economic resources – not just tangible goods, he told the Sunday Standard.
This means that all barriers to trade in goods, services, capital, and labour are removed if the 14 counties that make LREB are to succeed in enforcing the common agreements.
He said they will harmonize micro-economic policies, and common rules regarding monopoly power and other anti-competitive practices among LREB member counties.
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-Currently, there are roughly 200 economic integration agreements in the world.
-The European Union, (EU), is the most advanced among the blocs, comprising 27 countries in Europe.
-The EU has increased market access, and LREB, too, is keen to improve trade rules, and harmonize standards among its 14 members.
