nfrastructure contributed half a percentage point to Kenya’s annual per capita GDP growth over the last decade. Raising the country’s infrastructure endowment to that of the region’s middle-income Icountries could boost annual growth by more than 3 percentage points per capita.

Having made significant progress in infrastructure through the mid-2000s, Kenya boasts infrastructure indicators that are higher than those of most other low-income countries in Africa though still far below those of Africa’s middle-income countries. A modernized ICT sector now offers 90 percent of the population access to a GSM cell phone signal. Institutional reforms in the power sector have reduced the burden of subsidies on the public by about 1 percent of GDP. A successful public-private partnership in air transport has helped to make the country’s airline one of the top three carriers in SubSaharan Africa. Jomo Kenyatta International Airport is a key international gateway to Africa. The establishment of a sound system for funding road maintenance should pay long-term dividends by reducing the cost of road travel to the economy.

Kenya’s greatest infrastructure challenge lies in the power sector, where a further 1,000 megawatts of generating plant will be needed over the next decade—a doubling of current capacity. A second challenge is to increase terminal capacity at the Port of Mombasa and to strengthen the port’s road and rail interfaces to improve the efficiency of operations. Low levels of access to household services are also a major concern. Kenya has moved backwards with respect to the Millennium Development Goals in water and sanitation, and living conditions in Nairobi’s slums are particularly poor.

Addressing Kenya’s infrastructure deficit will require sustained expenditures of almost $4 billion per year over the next decade, about 20 percent of GDP. That share is about what China has spent in recent years, but it would pose a huge challenge for Kenya’s economy. The amount needed is split fairly evenly between investment and operations, on the one hand, and maintenance, on the other. Almost half of the total relates to the achievement of the Millennium Development Goals for water supply and sanitation and a further quarter to improving the reliability and availability of electrical power.

As of 2006, Kenya needed and additional $2.1 billion per year, or 11 percent of GDP, to meet its projected infrastructure needs. That gap could be halved if more efficient technologies were used to meet infrastructure targets in the transport and WSS sectors. Even if Kenya were unable to close the infrastructure funding gap, it could meet the posited infrastructure targets by eliminating inefficiencies and extending its target horizon from 10 years to 18 years.

# The continental perspective

The Africa Infrastructure Country Diagnostic (AICD) has gathered and analyzed extensive data on infrastructure across almost all African countries, including Kenya. The results have been presented in reports covering different areas of infrastructure—ICT, irrigation, power, transport, water and sanitation—and different policy areas—including investment needs, fiscal costs, and sector performance.

This report presents the key AICD findings for Kenya, allowing the country’s infrastructure situation to be benchmarked against that of its African peers. Given that Kenya is a relatively well-off low-income country that aspires to become a middle-income country, two sets of African benchmarks will be used to