Fellow Kenyans,


I am glad to join you in commemorating this 42nd Jamhuri Day. On this occasion, I convey my best wishes to all Kenyans wherever they are assembled. I also acknowledge, with much gratitude, the presence of our friends and all those who have sent us messages of goodwill as we mark this historic occasion.


The commemoration of this day is a reminder that as Kenyans we are all responsible for the destiny of our country.


On this anniversary, I thank all Kenyans for demonstrating great political maturity, patriotism and commitment to hard work. We should continue upholding these values, which have enabled us to overcome many challenges and to remain strong and united as we move forward.


In particular, I commend you all for conducting yourselves peacefully and for demonstrating tolerance and respect for divergent views in the period before, during and after the recent national referendum on the constitution. As we reflect on the process and implications of the outcome of the referendum, we should continue to focus on nation building for improvement of the welfare of all our people.


In this regard, let us always endeavour to rise above narrow partisan interests and embrace the broader national interests, which would determine the rhythm of development for our country. This is a great country with great potential for faster development and prosperity. Let us not waste our energies on unproductive politics. We need to learn to conclude political issues and move on.


We should not engage ourselves in endless debates at the expense of development. Let us direct our energies to productive activities that impact positively on the well being of each and every one of us.


Ladies and Gentlemen,

In my address to the nation during Kenyatta Day, I emphasized the importance of paying special attention to the challenges that are facing the youth in this country. Some of these challenges are being addressed by the expansion of the economy.


However, my Government has now established a Ministry for Youth Affairs to develop a comprehensive policy and programs for widening opportunities for the youth of this country. I call on the youth to participate in the development of these policies so as to ensure that the programmes are responsive to their needs.


As a country, we are investing heavily in the development of skills among the youth. On their part, young people should use their energies and talents for productive activities and self-development. At the same time, the youth should be alert to the serious dangers posed by alcohol, drugs and immoral activities, which can very easily ruin their lives.


I call on parents and communities to fully support the youth in efforts to steer away from these pitfalls. In this regard, the Government will make an effort to galvanize all these efforts for the benefit of our youth.


Fellow Kenyans,

When I assumed management of the affairs of our country, just under three years ago, I took a solemn oath to preserve, protect and defend the Constitution of the Republic of Kenya. As I have stated on several occasions, my Government will facilitate consultations to open the way for a legal framework that will guide the nation towards achievement of a new constitution.


As we undertake this process, we should be positive and receptive to different points of view. The constitution is about building the nation, and should never be used as an instrument for dividing the country. Therefore, we should keep away from politics of deceit and propaganda, which would complicate this process.


As we tackle the constitution, we must not lose sight of our wider commitments to the social and economic development of this country. We must, therefore, continue to build on the gains we have made in the last three years. Indeed, the changes I introduced in the Government last week were motivated by the desire to generate new impetus in the delivery of the promises we made to Kenyans.


Public servants throughout the country should discharge their duties with due diligence as expected of them. Our success in fulfilling the pledges we made will depend on the efficient delivery of core government services to the people.


My Government has already made good progress towards creating a more efficient and motivated Public Service.


Remuneration in all sub-sectors of the Public Service has been steadily improved over the last two years. My Government has also put in place strategic plans in the entire public service in order to ensure that service delivery is focused and efficient.


Towards this end, the Government has introduced a Result Based management system, which is intended to lay emphasis on accountability, service delivery and timely implementation of projects and programmes. Valuable time is wasted on procedures and a general lack of a sense of urgency. This is not going to be tolerated in the public service.


The newly formed Cabinet, Assistant Ministers and Permanent Secretaries should carry this message clearly across the entire Government system. We have to change the work ethics and values. In this regard, the Government has now developed a Code of Conduct and Governance Accountability Guidelines for adherence by Ministers, Assistant Ministers and Permanent Secretaries.


Fellow Kenyans,

My Government has over the last three years continued to pursue its economic and social objectives as highlighted in the Economic Recovery Strategy for Wealth and Employment Creation. Our efforts have borne fruits as indicated by the improved performance of various sectors of the economy.


This year, for example, tourism and telecommunications grew by 15 percent and 10 percent respectively. Other sectors that have recorded improved performance include manufacturing, trade and building and construction, which expanded by 4 percent, 9.5 percent and 3.5 percent respectively. On aggregate, real GDP grew by 4.3 percent last year, and is expected to exceed 5 percent this year.


This improved performance is the result of prudent management of the economy. At the macro-economic level, we have continued to ensure stability in order to enable investors make long-term investment decisions. On fiscal policy, the growth in tax revenues has exceeded projections by an estimated 30 billion shillings this year.


This has enabled the government to meet most of its budgeted expenditure needs and reduce its demand for domestic borrowing. I take this opportunity to express the appreciation of my Government to all Kenyans for remaining committed to paying taxes.


On its part, my Government will continue to ensure that tax revenue is appropriately utilized for the benefit of all Kenyans. In this regard, the Government has completed the Fourth Public Expenditure Review whose aim is to enhance financial discipline in the public service.


To further enhance transparency and improve service delivery, the Government has enacted the Public Procurement and Disposal Act. This law is designed to speed up public procurement, while also ensuring that the process remains transparent and competitive.


Moreover, the government is closely monitoring the implementation of government projects. We have stepped up measures to address the weaknesses that have resulted in the poor implementation of Government programmes. In the past, a weak tracking system that failed to monitor and give timely feedback on the status of projects resulted in poor project implementation.


To address this problem, a National Integrated Monitoring and Evaluation System is now in place. This system is being used as an evaluation tool for the implementation of the economic recovery strategy.


Fellow Kenyans,

To ensure that collected taxes benefit majority of Kenyans directly, my Government is channeling resources to the grassroots level through the Constituency Development Fund, the Constituency Bursary Fund and the Local Authorities Transfer Fund. Through this arrangement, we are directly transferring over 60 million shillings annually to every constituency in the country.


Our efforts to transfer resources to the grassroots are further enhanced by increased funding under the Free Primary Education policy. Under this programme, a total of 8.5 billion shillings will be transferred to individual schools throughout the country.


These funds are intended for use on community-based projects, which are consistent with local priorities and needs. I encourage all Kenyans at the grassroots level to closely monitor the use of these funds to ensure that they have a positive impact on poverty alleviation.


In this regard, Constituency Development Committees should post in public places the projects being funded, and the amounts allocated to these projects every year. Wananchi have a right to know and monitor how their money is being utilized. District Commissioners should ensure compliance with this directive with immediate effect.


Fellow Kenyans,

The revitalization of the agricultural sector comprises a key component of our efforts in promoting a vibrant private sector. The aim of my government is to transform agriculture from a largely subsistence activity to a profitable, commercially oriented and internationally competitive enterprise.


I am glad to note that the sector has recorded sustained growth in the last three years. For example, last year, tea production increased by 10 percent, making our country the third largest tea producer in the world. With respect to horticulture, export volumes increased from 133 thousand tonnes in 2003 to 166 thousand tonnes last year.


The cotton sub-sector has also shown positive signs of recovery with production of 23,000 bales last year. The performance of the coffee sub-sector also improved by 2 percent, and we expect production to improve by 10 percent this year. Similarly, cane production has increased by 12 percent to 4.7 million tonnes.


Indeed, most sugar companies registered improved performance in terms of profit and prompt payment to farmers.


To increase maize production, which is our staple food, the Government is supporting maize farmers through provision of seasonal crop credit and stabilizing producer prices through the National Cereals and Produce Board.


Our efforts in streamlining the fisheries and livestock industries have also borne positive results. Last year, we exported 29,000 metric tonnes of fish and fish products to various markets, which earned the country 5 billion shillings. On livestock, we have made good progress in marketing our products beyond our borders. In the last one year, we have re-entered the livestock export market with exports to Mauritius and Dubai.

With the expanding market opportunities, I urge farmers to increase and improve the quality of our animals in order to meet the growing demand.


My government will continue to implement measures to promote the livestock sub-sector through creation of disease-free zones and construction of satellite abattoirs to improve market access for livestock at the local level. As part of these efforts, the process of re-opening the Kenya Meat Commission export slaughterhouse at Athi River is on schedule.


Furthermore, the Government is now intervening in the purchase of animals in drought stricken areas to cushion our pastoral communities from the losses they suffer during periods of drought.


Towards this end, the Government has established a revolving fund with an initial sum of 100 million shillings to enable the Agricultural Development Corporation purchase the animals.


The Dairy Industry has also been liberalized through policies intended to support marketing of milk by small-scale farmers and agents. As a result of this, milk output has increased by over 35 percent in the last one year. This sector, which was once on the brink of collapse, is once again providing employment and livelihoods to thousands of our people.


With regard to development of infrastructure, my Government has focused on maintenance and construction of roads, with 35 major roads projects going on in various parts of the country. In addition, the concessioning of the Kenya and Uganda Railways is now complete. The sector will soon receive a new lease of life following expected modernization and improvement of the efficiency of railway services.


We have also made significant progress towards creating a modern and efficient telecommunications infrastructure. For example, Wananchi in most rural parts of Kenya have access to mobile telephone services. Currently, there are more than 5 million Kenyans who own mobile phones.


With respect to energy, the Government will soon establish a Rural Electrification Authority to streamline the implementation of the rural electrification programme and accelerate the pace of rural electrification. The Government intends to increase the coverage of electricity to rural populations from the current 5 percent to 40 percent by the year 2020.


In the Health Sector, we are paying special attention to HIV/AIDS, TB and malaria, which continue to have a devastating impact in all sectors of our society. On HIV/AIDS, I am glad to note that we have registered remarkable success as demonstrated by the drop in the prevalence rate to 6.1 percent. To further intensify the war against HIV/AIDS, my government has launched a new initiative known as Total War Against Aids. The objective is to further reduce the HIV/AIDS prevalence to below 5.5 percent by the year 2009. As part of this initiative, we will continue to increase the number of people on Anti-Retroviral therapy and also provide socio-economic safety nets for those infected and affected. I urge all Kenyans to observe safe behaviour in order to keep the disease at bay.


We have also stepped up measures to combat the spread of T.B. and malaria in the country. We have strengthened the implementation of malaria control programmes, while treatment for T.B. is being given free of charge in all government healthcare facilities.


Fellow Kenyans,

My Government continues to give priority to the security of our people. Resources have been mobilized to support the ongoing reforms in the Police Force aimed at improving the ability of the police to prevent and control crime. The security measures being implemented by my government include increasing police recruitment and intensifying specialized training.


I urge members of the public to join hands with security officers through the Community Policing initiative in order to counter crime and improve their security.


On the East African Community, the necessary measures are being put in place to realize our objectives as set out in the East African Community Treaty.


I note with satisfaction that various integration efforts are at advanced levels and nearing completion. In particular, the negotiations for the protocol on the free movement of persons, labour, and services will be concluded by 2006. This will enable the people of East Africa to move freely across the borders, and to settle or do business anywhere within the community.


I urge Kenyans to take advantage of every gain we achieve as we work towards a political federation.


In conclusion, I wish to assure Kenyans that my government remains committed to ensuring just and equal treatment of all in a shared process where people can come together in the diversity of their views and backgrounds.


I, therefore, call upon Kenyans to unite on the common purpose of building our country. I urge all Kenyans to be tolerant to diverse ideas and to remember that we must sacrifice our personal convictions for the sake of the well being of our country.


Finally, I take this opportunity to wish all Kenyans a happy Christmas and a successful New year.


Thank You and God Bless You all.