Treasury, August 25,2015: By Joseph Kipkoech.
Japan’s development cooperation growth portfolio to Kenya from independence to date stands at Ksh469.5 billion. Over the years, the projects that have benefited from the Japanese development assistance include Jomo Kenyatta University of Agriculture and Technology, and Kenya Medical Research Institute which have provided leadership in technology and innovation, and medical research respectively.
Others include the construction of the Nairobi Missing Road Links Project, Embu Water Supply and Kapsabet town water development system.

While speaking at the National Treasury Nairobi during the signing Ceremony for Exchange of Notes for Health Sector Support Programme worth Ksh3.28 billion for Universal Healthcare Coverage with Japanese Ambassador to Kenya Mr. Tatsushi Terada,  National Treasury Cabinet Secretary Mr. Henry Rotich, added that projects currently under construction through funding from Japanese government, are Mombasa Port Area Road Development Project, Mombasa Port Development Project Phase 1, Baringo and Narok towns water supply, Mwea Irrigation Development Project, Olkaria 4 Geothermal Power Station and Olkaria-Lessos-Kisumu Power transmission line among others which will contribute greatly to our economic growth.
He said Ksh3.28 billion credit support from Japan to the Health Sector Support Programme will provide budget support to the health sector in a bid to promote the attainment of Universal Healthcare in the country, adding that the funds will be utilized to expand and strengthen the delivery of essential health services at county hospitals to ensure that all Kenyans enjoy quality healthcare services.
Mr. Rotich said that Kenya will be the first country in Africa to host the sixth Tokyo International Conference on African Development (TICAD) Yokohama Action Plan in Nairobi during the second half of 2016. This will enable Kenya to strategize on the best methods to seek financial and technical support from Japan within the framework of TICAD initiative to implement priority projects in line with the Vision 2030 blue print.
At the same, the Cabinet Secretary said Kenya will utilize the forthcoming Kenya/Japan Annual Bilateral Consultations for Economic Cooperation for 2015/2016 financial year to discuss areas of future cooperation and other issues of mutual interest between the two countries. He said Kenya’s cooperation with Japan is anchored currently on the fifth TICAD Yokohama Action Plan, adding that under the Action Plan, particularly the “Yokohama Declaration”, the road map for the support of African growth and development under the TICAD process has been clearly defined.
Early this year, he said, Kenya and Japan signed the Exchange of Notes for Japan’s Non Project Grant Aid for Provision of Japanese Small and Medium Enterprises (SMEs) products, Mombasa Port Development Phase 2 Project and the Project for Medical Waste and Hazardous Waste Appropriate Processing Plant which makes Japan one of Kenya’s major development partners.
Every human being deserves good healthcare regardless of age and social class which have been some of the challenges in developing countries hindering equal access to healthcare services. Japanese Ambassador to Kenya Mr. Tatsushi Terada said that in this context, his country’s support towards the achievement of Universal Healthcare services will continue in the developing countries.
“Japan’s support towards the achievement of Universal Healthcare Coverage will also focus on the delivery of satisfactory healthcare services to all people despite financial constraints and other related reasons”, Mr. Terada said.
He described the Health Sector Policy loan for attainment of Universal Healthcare Coverage in Kenya as historic, saying Kenya is the first country in the World where the Japanese government provides Health sector policy loan. To attain the Universal Healthcare Coverage, Mr. Terada said his government will support free maternity services, health sector service fund result-based financing, health insurance subsidy programme, and capacity development in Kenya’s urban and rural areas.
He said areas to be covered by the health support programme during the project implementation period has been determined in line with Kenya’s national health sector strategic plans as stipulated in Vision 2030 so that the desired health objectives could be achieved by 2030.
While drawing examples from Japan, Mr. Terada said his country took 40 years to achieve Universal Healthcare in 1961 after enacting employees Health Insurance Law in 1922. “Since then, despite the difficult path taken, all Japanese have had equal access to healthcare services depending on their medical needs without financial barriers. World Health Organization has ranked Japan’s healthcare systems one of the best in the World”, he said.
Mr. Terada said Yokohama Action Plan adopted in the TICAD V will strengthen and facilitate the promotion of development cooperation policies of health systems in a bid to accelerate the achievement of Universal Healthcare Coverage in Africa.
On new development perspective Japan intends to craft, the Ambassador said Japan will host an International conference on Universal Health Coverage in December 2015 which is geared towards building resilient health systems which will accord health sector stakeholders the great opportunity to explore the roles of Universal Health Coverage in the transition from Millennium Development Goals (MDGs) to the Sustainable Development Goals (SDGs), which will most likely challenge the world by setting higher goals regarding access to health services.
He said Japan will strive to promote Universal Healthcare Coverage globally and explore the kind of assistance Japan can offer to each unique situation in the health sector.
Meanwhile, Japan International Cooperation Agency (JICA) chief representative to Kenya Mr. Hideo Eguchi, said the concept of human security which is embedded in Kenya’s health sector policy priorities contributed significantly to the country’s ability to win the loan facility which is also in tandem with the guiding principle of Japan’s development cooperation.
“Human security is a concept that pursues the right of individuals to live happily and in dignity, free from fear and want, through their protection and empowerment”, Mr. Eguchi said.
 “The concept of Universal Health Coverage is a foundation to build when a country strives for human security, as it is an instrument to realize sustainable and equitable economic growth and social stability”, he added.
The loan agreement signed by Mr. Rotich and Mr. Terada and witnessed by Health Cabinet Secretary Mr. James Macharia and the National Treasury Principal Secretary Dr. Kamau Thugge, was the 39th Yen loan extended to Kenya by Japan since 1963.
Mr. Eguchi also said that the loan is designed to support the Health Ministry’s on-going efforts in strategic planning, policy-making and implementation towards Kenya’s Universal Healthcare Coverage.
With our new technical cooperation project, he said, JICA intends to strengthen the management capacity of National and County health personnel in Kenya. Mr. Eguchi expressed optimism that the Global Funding Facility (GFF), another global financial platform for health, would help Kenya to improve maternal, new-born child and adolescent health, and thus in extension, promote the country’s Universal Healthcare Coverage.
The National Treasury Cabinet Secretary also defended the tendering changes introduced mid-way during the bidding for a company to operate the Japanese government-financed second container terminal at Mombasa port.
Mr. Rotich said the six amendments to the procurement process served to make it more flexible and attractive to investors without undermining an earlier agreement with Japanese financiers and developers of the first phase of the project.
This came after Japan International Co-operation Agency (JICA) earlier complained of changes which provided that the selected company would determine the financing of the next phases of the project.
During a press briefing at the National Treasury in Nairobi after signing the loan support to the health sector, Mr. Rotich said his Ministry was responding to bidders’ request for more flexibility in their investments, adding that the investors had submitted their documents for evaluation.
He said Kenya government and JICA have already signed an Exchange of Notes to allow the funding of the port facility to proceed. Japan had in March signed a loan agreement with Kenya Ports Authority to finance and build the next phase. Japanese Ambassador to Kenya Mr. Terada, JICA Kenya Chief Representative Mr. Eguchi and National Treasury Principal Secretary Dr. Thugge were in attendance.

The National Treasury said the introduced 15 percent government shareholding rule in the privatized port facility would give it mandate to monitor operations by the operator and ensure the country’s interests are not violated. “The port is a strategic national asset, thus the need for government minority participation”, said Mr. Rotich. Japan in January signed a Sh25 billion deal with Kenya to finance the construction of the first phase of the second container terminal to be completed next year March.
The procurement changes also state that the second and third phases to be built may be build, operate and transfer arrangement-where private firms would be allowed to construct the terminal, manage it for a period of time and transfer the facility to the government. The selected operator will also be given the first right of refusal in the planning and arrangement for the remaining phases.
Mombasa port handles fuel, consumer goods and other imports for domestic market alongside Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia. It also serves regional tea and coffee exports.
Japan, the third largest economy in the World after the United States and China, was keen on grabbing part of the ongoing and planned mega infrastructure projects including the Sh3 trillion worth Lamu Port South Sudan-Ethiopia Transport project.
On the other hand, it should be noted that China has specifically made major inroads in the upcoming infrastructure projects including the Sh327 billion Standard Gauge Railway linking Mombasa and Nairobi, with the expectation that the project would be extended to Kampala and later Kigali.
Dozens of other huge projects in ports, roads and housing have also been grabbed by the Chinese, which saw the US fall behind in involvement in Kenya’s transformation that came with lucrative opportunities.
The Japanese have been involved in the design of the Loima-Lokichar-Lamu crude oil pipeline, and also have interest in the Lapsset project, where the Chinese already have grip and the American firms standing by.
Lappset includes the construction of 32 births at the mega sea port, a crude oil pipeline and refinery, a coal-powered power plant, a railway line terminating at the port and three resort towns along the route. Japan has set aside Sh3.2 trillion for investment in Africa, with Kenya angling to be the biggest recipient of the Foreign Direct Investment (FDI).
The Kenyan government is also holding discussions with the Japanese government to launch direct flights to Tokyo and more likely through stronger airline flying directly into the Jomo Kenyatta International Airport in Nairobi.
On balance of trade between Kenya and Japan, it should be noted that it is heavily against Kenya which exports comparatively low value commodities consisting of tea, coffee and cut flowers, while Japan exports mainly vehicles and machinery to Kenya.
Over the years, the Far East nation has funded several development projects in Kenya which now stands at Sh469.5 billion. The colossal sum of money to Kenya in form of grants and loans, therefore demonstrates the underlying deepening bilateral ties between Kenya and Japan.