patrick njoroge : kenya ’ s experience and prospects in banking and economic infrastructure development opening remarks by dr patrick njoroge, governor of the central bank of kenya, at the 4th kba ( kenya bankers association ) annual banking research conference, nairobi, 24 september 2015. * * * good morning! i am very pleased to be here at this opening of the 4th kba annual banking research conference. i am grateful to kba for inviting me to this important forum and appreciate the presence of all the participants. this conference ’ s theme, kenya ’ s experience and prospects in banking and economic infrastructure development is indeed relevant to our current context. this is because most of the countries across africa and the world are experiencing huge infrastructure gaps, and governments are grappling with the challenges of coming up with innovative solutions to financing these investments. the importance of reliable infrastructure in raising the economy ’ s growth potential cannot be overemphasized. in most sub - saharan african countries, the infrastructure deficit is in critical sectors such as energy, transportation, health, water, sewerage, and telecommunications, and is a significant drawback to the continent ’ s economic performance. vision 2030, kenya ’ s development blueprint, gives prominence to infrastructure development as a key driver of long - term growth. in recognition of the important role the private sector can play, the government is committed to creating an enabling environment to facilitate private participation. with support from the world bank, the government initiated the infrastructure finance and public private partnership ( ifppp ) project and has put in place a supportive legal and regulatory framework through the ppp act, 2013 and the related regulations, giving private participation a central role in the government ’ s long - term development strategy. the complementary roles of the government and private sector in infrastructure funding were most recently highlighted at the un ’ s 3rd international conference on financing for development, held in july 2015 in addis ababa, ethiopia. at this summit, participants reiterated the vital roles both governments and the private sector can play in infrastructure delivery, sustainable development and poverty eradication. involving the private sector, not only eases the fiscal and administrative burden on governments but also enhances efficiency in the delivery of key public services. in this regard, public - private partnerships ( ppps ) are an increasingly popular mechanism by which the private sector has been brought in. ppps are therefore among the options that have been sought by governments to address this funding challenge. it is clear that there is interest in

and capital equivalent to the surplus has been transferred to the fund. in 2000 and 2001, almost the entire cash flow was transferred to the fund, while in the last two years the share transferred to the fund represented about two thirds of the cash flow. the petroleum fund has become large, even compared with the biggest funds in the world. at end - 2004, the market value of the petroleum fund ’ s international portfolio was 1 016 billion norwegian kroner or 124 billion euros. the ministry of finance has defined a clear mandate for norges bank ’ s management of the petroleum fund. norges bank shall seek to achieve an excess return in relation to a benchmark portfolio. norges bank has developed principles of corporate governance. for the internally managed assets, norges bank has exercised voting rights at the general meetings since the beginning of 2003. the external managers have exercised voting rights for the assets they manage on behalf of the petroleum fund since 1999. for that portion of the portfolio that is under internal management, norges bank voted at 132 annual meetings on 1 541 items in 2004. norges bank voted against the management ’ s proposal on 18 per cent of the items. norges bank has voted most frequently on board - related matters. in november 2004, the ministry of finance approved new ethical guidelines for the petroleum fund ’ s investments. the ethical basis for the petroleum fund shall be promoted using the following three mechanisms : • corporate governance based on the un global compact, the oecd principles of corporate governance and the oecd guidelines for multinational enterprises in order to promote long - term financial returns. • negative screening from the investment universe of companies that, either themselves or through entities they control, produce weapons whose normal use violates fundamental humanitarian principles. source : kjell gunnar salvanes : “ omstilling og strukturelle endringer i det norske arbeidsmarkedet ” ( adaptation and structural changes in the norwegian labour market ). lecture at a conference arranged by the norwegian school of economics and business administration, the norwegian shipowners ’ association and the foundation for research in economics and business administration in oslo on 8 october 2004. • exclusion of companies from the investment universe where there is an unacceptable risk of contributing, inter alia, to gross or systematic violations of human rights. the chart shows developments in both the average annual net real return and the real return without the contribution from active management. returns have fluctuated considerably since the petroleum fund made