Policy - Institute of Economic Affairs
Transcription
Policy - Institute of Economic Affairs
Inside Policy Issue No.2 quarter 1 2012 Journal of the Institute of Economic Affairs Youth Fact Book: Infinite Possibilities or Definite Disaster? No doubt the Kenya youth present one of its key resources. They also represent the country’s potential for the future. This is also one group that is often misunderstood and faces many challenges such as unemployment and other socio-economic problems. The Youth Fact Book, published by the Institute of Economic Affairs, puts together different youth indicators for the purpose of providing an overview on age, gender, regional and socio-economic status of youth. The book helps identify trends which policy makers could use to develop evidence based policies and therefore meaningfully engage the youth. The book is available on our website – www.ieakenya.or.ke under publications (Research) Regional Integration: Can East Africa Show The Way? Music the Language of Integration 7 23 35 Kenya Food Security Policy: Lessons From China Health Sector Spending in Kenya: Who Gains? Institute of Economic Affairs - Programmes Policy Areas Call for Articles for The Third Issue of the “Policy” The Public Policy Journal of the Institute of Economic Affairs” 1. Regulation And Competition Policy Programme The Regulation and Competition Policy Programme aims to facilitate the formulation and implementation of appropriate economic regulations and competition policy in Kenya. The regulatory policy review has concentrated on the laws and institutions that regulate certain economic sectors. In the initial design of the programme it was intended that it would focus on the areas in which the connection between the law and the economy would be most evident. 2. Budget Information Programme The Budget Information Programme (BIP) promotes transparent and participatory engagement of key institutions in public finance management with emphasis on execution and auditing. The Programme has four components: parliamentary support, citizen/civil society support, gender budgeting initiative and local authorities support. The Programme activities are geared towards enhancing the capacity and effective management of key institutions in public management, both in the upstream (the legislature and the executive) and in the downstream (the civil society and the public in general). 3. Trade Information Programme The Programme aims to be an influential actor in Kenya’s trade negotiations, policy formulation, reforms and impact assessment. The Programme has three pillars: trade negotiations; trade, development and poverty reduction; and advocacy and networking. The institute seeks to ensure that it does not merely react to trade issues as they emerge but anticipated the future in informing trade policy. 4. Futures Programme The programme seeks to facilitate increased utilization of future methodologies in development planning, research, policy formulation and analysis. The programme has three components: scenarios thinking, vision building and strategic building. Under the scenarios component, the programme seeks to provide alternative pathways into the future that explore interaction between social, political, technological, environmental and economic forces operating within a given context. The visioning component seeks to give theoretical and practical perspectives on importance of building a shared vision that can unify people and enhance development by embedding it into a comprehensive planning process. The Programme has also facilitated the planning in a number of constituencies. Strategic plans help a community take stock of where they are coming from and where they are to determine strategic needs that can be carefully prioritised to enhance community development. The Institute of Economic Affairs (IEA-Kenya), a public policy think-tank based in Kenya will soon be publishing the third issue of the exciting and informative Public Policy Journal – “Policy” . The publication is a journal through which IEA members and associates, Kenyan professionals, academia and researchers can articulate their well-researched view points on diverse public policy issues. The journal aims to provide an avenue for IEA members and associates, professionals, researchers and general public to influence public policy through research, provide cutting edge information on public policy and provide policy makers with useful information to guide policy reforms. The articles submitted should aim at reporting on progress made in implementing specific policy reforms or communicating research findings on a particular public policy issue in a reader-friendly manner. Alternatively, articles could also provide a critique of the design or implementation of public policy reforms and advocate for specific public policy changes, in all cases backing their arguments will well researched facts where appropriate. The IEA will put together a panel of editors to review submitted manuscripts in order to ensure accuracy of information and eliminate errors. The editors will therefore reserve the right to change manuscripts , in collaboration with the authors, to ensure that they are accurate and comply with international standards. Submissions Writers are urged to observe the following requirements: • Articles must be written in clear UK English. • Articles submitted for publication in the journal must be original and must not have been published or submitted for publication elsewhere. • Articles must average between 1,500 and 2,000 words for short articles and between 4,000 and 6,000 words for long articles • Contributors must submit an electronic file of the manuscript. • Authors should provide an abstract of their article, not exceeding 300 words in length. Please note that the deadline for submission is Monday, 2nd April 2012. Please send your manuscripts to the editor on email address - [email protected]. For any clarifications, please send an email to the same address or call Irene on +254-20-2721262 or +254-20-2717402. Contents 3 4 5 6 Editor’s Letter Authors’ Profiles The Institute of Economic Affairs Programme Word from the CEO Features 7 Music: The Language of Integration? East African music artists provide a perfect template for the political class for breaking down existing barriers, overcoming mistrust, and creating a powerful cultural and economic synergy. by Bill Odidi 10 South Sudan Secession: Opportunities Abound for Kenyan Economy A review of opportunities available to Kenya in South Sudan and policies the Government of South Sudan has thus far put in place to cultivate and nurture a conducive investment environment. by Adhoch Abuga 23 Kenyan Food Security Policy: Lessons From China An exploration of the important aspects of food security: research; agricultural extension; production, marketing and storage infrastructure; seed management; production processing and storage technologies; food commodity monitoring and reporting; and information management by Andrew M. Mugambi Policy Journal - Issue No.2 Quarter 1 2012 | 1 27 Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 A review of Kenya Vision 2030 in the context of the new Constitution with the aim of providing policy implications on youth and the state of youth unemployment in Kenya and their link to state failure by Owino Magana IEA Papers 35 Health Sector Spending in Kenya: Who Gains? An analysis of the social pillar as stipulated in Vision 2030, specifically the health sector. The Government targets provision of equitable and affordable health care services at the highest possible standards for her citizens and at the same time ensure that water and improved sanitation – key provisions that directly affect health care – are available to all Kenyans by the year 2030. Will this be achieved? Published by the Institute of Economic Affairs, P.O. Box 53989 – 00200, Nairobi. The IEA is a public policy think tank established in 1994 with the aim of providing a platform where public dialogue on policy issues could take place. The institute seeks to promote pluralism of ideas through open, active and informed debate. It is a membership organization and draws from this membership a wealth of expertise and experience 2 | Policy Journal - Issue No.2 Quarter 1 2012 Editor’s Letter Dear Reader, Welcome to the second edition of the IEA’s ‘Policy’ journal. Letters to the Editor We are addressing the timely issue of regional integration. East Africa has been moving steadily to ever closer union since the re-establishment of the East African Community in 1999. From an original membership of three countries – Kenya, Tanzania and Uganda, the Community has grown to five countries, with the inclusion of Burundi and Rwanda since 2007. Sudan and South Sudan are also being considered for membership in the Community. We welcome feedback on the articles covered in this publications and invite you to write to the editor on email [email protected] or by post on P.O. Box 53989 – 00200 Nairobi. In this edition of the journal, we are considering the issue of regional integration from various tangents. For example, musicians and other entertainers have been quietly (some would argue loudly) integrating the region for decades. They have sought fame and fortune throughout the region with no regard for borders. The new generations are following their illustrious forbears. Letters may not exceed 300 words. Those longer than that may be edited. South Sudan, which gained independence in July, is also in focus, and specifically in the area of opportunities for entrepreneurs. Food security is obviously key in any discussion on the region, especially in the face of the most serious drought in a generation. We also discuss issues within the IEA’s usual range of discussion topics, including youth unemployment and Vision 2030, and health matters. Enjoy your reading. They must not have been published elsewhere and must make reference to articles carried in the immediate previous journal issue. The purpose of the letters to the editor is to provide a forum for positive and constructive views on articles and matters published in the journal. Due to space, the IEA- K many not publish all the letters received. We regret that we shall not return or acknowledge unpublished letters. Writers of those articles that will be published will be notified. Although we are unable to acknowledge those letters we cannot publish, we appreciate the interest and value the views of those who take the time to send us their comments. Please include your address and telephone number where we can reach you. Disclaimer The views and opinions expressed in the articles published in the Policy Journal are the respective author’s own and do not necessarily reflect those of the Institute of Economic Affairs, which seeks to publish a diverse range of perspectives on any given issue. Authors are fully responsible for and legally liable for their own work. The Institute of Economic Affairs assumes no responsibility or legal liability, express or implied, for the content of any work of the author. Every effort has been made to ensure the accuracy of all the information (the content) contained in this journal. Policy Journal - Issue No.2 Quarter 1 2012 | 3 Authors’ Profiles Issue No.2 Quarter 1 2012 ‘Policy’ is a quarterly journal published by the Institute of Economic Affairs in Nairobi, Kenya Chief Executive Officer Kwame Owino Editor Irene Kinuthia and Wallace Kantai Journal Committee Kwame Owino Irene Kinuthia John Mutua Photo Credits: Boniface Mwangi Wallace Kantai Bill Odidi is a radio producer with the Kenya Broadcasting Corporation in Nairobi with over 10 years experience working in various media. He has also worked as a correspondent for Radio France International and writes on the arts and culture for the Nation Media Group of newspapers. He has also worked as project manager with Ketebul Music on the documentary series Retracing Benga and Kikuyu music. He is currently directing “Retracing Kenya’s Funky Hits of the 70s, due for release before the end of 2011 Adhoch Abuga is a communications professional, specialising in writing, editing, photography, media liaison and website development and maintenance. He has worked in a number of non-governmental organizations in Kenya and South Sudan. Design & Layout Jacqueline Omutimba This publication is published with the support of Think Tank Initiative IDRC Other donors include: CIDA, IDRC, GTZ, Ford Foundation, Rockefeller, SIDA, HBF, Danida, Pact Kenya, OSEA, Diakonia, URAIA, GDNet and FES. © Institute of Economic Affairs 5th Floor, Block D, ACK Garden House P.O.Box 53989 00200 Nairobi, Kenya Tel: (+254-20) 2717402, 2721262 Fax:(+254-20) 2716231 E-mail: [email protected] Website: www.ieakenya.or.ke IEA Board members Ms. Betty Maina (Chairperson) Mr. Duncan Okello Ms. Lynne Wanyeki Mr. Charles Onyango-Obbo Mr. John Kashangaki 4 | Policy Journal - Issue No.2 Quarter 1 2012 Owino Magana is a member of the IEA and a project management practitioner with over 20 years consulting experience in and outside Kenya. His core area of focus is strategy implementation to enhance governance and service delivery in the private and public sectors, using ICT. The views expressed in this article are based on his research and do not necesarrily reflect the IEA’s position. He may be reached on [email protected] Andrew M. Mugambi is a consultant in agribusiness, development, monitoring and evaluation and public policy analysis. He is also a researcher, trainer and publishes regularly in areas like agriculture, food security, marketing, value addition, general development, public policy, project development and management, micro financing and rural infrastructure development. He worked for the Kenyan public service all the way to the top for 30 years before going into consultancy on full time basis. He holds a BSc. in Agriculture and MSc. in Agricultural Economics from West Verginia University and Colorado State University respectively. Word from the CEO The Institute of Economic Affairs (IEA-Kenya) is pleased that you are reading the second volume of the Policy journal. Having published the first volume more than a year ago, we have been encouraged with the interest in advancing policy discourse, innovation and commentary at an appropriate level for our members and the general policy audience. Regional integration is fittingly the main subject of this second volume of the journal and it is noteworthy that the main article concentrates on a service and cultural factor as an agent for regional integration. It addresses the history of performance exchanges across the regions in a way that makes it clear that integration preceded the more formal trade and political instruments that drive action today. In subsequent articles, the authors address the variety of policy areas that the programmes within the Institute of Economic Affairs (IEA-Kenya) are exploring. This includes the assessment of the implementation of Vision 2030 and its effects on youth employment, the examination of the distribution of the benefits of health care spending in Kenya and the lessons for agriculture policy that may come from China. Admittedly, this variety is not only an interesting set of issues but they each contain policy points that are useful for advancing debate, understanding and the crafting of better policy. We hope that that is where our influence will be most palpable. Thanks to my colleagues and the editorial team that have pulled off this second edition. Kwame Owino Institute of Economic Affairs February 2012 Policy Journal - Issue No.2 Quarter 1 2012 | 5 Training of Trainers Manuals The National Budget is one of the most important policy instruments through which the executive raises and spends public funds. For the citizens to be able to hold their leaders to account on the use and management of public funds, they have to be able to understand not only the budget but the process of getting there and points of engagement. The IEA has developed three thematic Training of Trainers (ToTs) manuals to provide the civil society and the public with the skills to understand and engage in the budget making process in addition to building a critical mass of trainers from the civil society on public finance. These manuals are: Applied Budget Work - intended for civil society organizations that work around budget issues and is supposed to demystify the budget and encourage these organizations to understand that the budget can be used as a tool of accountability. As such it is intended to equip them with skill and techniques to undertake budget analysis as well as apply other budget work skills in order to effectively participate throughout the budget cycle. Existing mechanisms for the public to engage in the budget making process - raises awareness of the existing opportunities and avenues for the public to engage throughout the national budget cycle of Kenya as well as provide an overview of the principles underlying participatory budgeting and further outline best practices in participatory budgeting. Monitoring and Evaluation of Public Funds: Utilisation and Management - This Manual intends to help citizens, civil society groups and other stakeholders to increase knowledge, awareness and capacity to monitor and evaluate public funds utilisation. By tracking the budget throughout its implementation, citizens and civil society groups can hold public officials accountable. The manuals are available on the IEA website. 6 | Policy Journal - Issue No.2 Quarter 1 2012 By Bill Odidi Music the Language of Integration? I n 1944 a young Kenyan musician called Fundi Konde was enlisted into the Entertainment Unit of the Kings African Rifles, where he met several colleagues from Uganda and what was then known as Tanganyika. After rehearsing a musical performance for five months, the new band embarked for Ceylon (Sri Lanka) to entertain East African troops preparing to fight in the Second World War. Just after the end of the war, having returned home, this group of musicians continued to perform as the Rhino Band, based at first in Kampala, then eventually, Mombasa. Fundi Konde was spotted by Peter Colmore, a pioneer film producer and director of East African Records, who enlisted him in his African Band. This was a five-piece outfit including musicians like Peter Bernard and Ally Sykes, a Tanzanian who had also returned from the war. The band played at the White Horse Hotel in Nairobi, but also appeared at municipal halls, armed forces clubs and other venues, with Konde as the composer of classics like Jambo Sigara. In 1951 they toured Tanganyika and ultimately their music spread throughout East Africa at the height of the struggle against colonial rule in the region. During the Emergency in Kenya in 1952, Konde first moved to Kampala, Uganda and joined the Hollywood Jazz Band, before crossing to the Congo, where he played music at a bar in Goma. In the years leading up to independence for the three East African countries, Fundi Konde was a prime mover in the development of the music industry, working for HMV Records, Hi-Fidelity Studios and the Jambo Records, for whom he recorded the all time classic Malaika with fellow Kenyan star, Fadhili William*. * The name is variously spelled Fadhili Williams and Fadhili William. We have chosen to stick to the latter. Policy Journal - Issue No.2 Quarter 1 2012 | 7 Music the Language of integration? In 1962 the Jambo Boys Band changed its name to the Equator Sounds Band with a sound that was typified by twopart vocal harmonies, a steady ‘walking’ bass, and lead guitar. An English expat, Charles Worrod, had bought the assets of East African Records and launched the Equator Sound label whose roster included Kenya’s Fadhili William, Daudi Kabaka, Gabriel Omolo, two Zambian emigres Peter Tsotsi and Nashil Pichen, as well as Fred Masagazi and Charles Sonko from Uganda. This group of musicians adopted the South African kwela rhythm and turned it into the Twist, a dance craze all over East Africa throughout the 1960s. Kabaka “The king of twist” who composed hits like Harambee Harambee and Helule Helule, was actually born in Uganda and named after the Buganda King, Daudi Chwa, who had died in 1939. Kabaka and others who comprised the Equator Sounds Band were paid a full time salary by the label owner, Worrod. Six of the core musicians from this group were enrolled in a course at the Conservatory of Music in Nairobi to learn theory and notation of music. The relationship with Worrod ended in 1972 with Kabaka and others launching their own production company called the African Eagles Recording Limited. The studio band called African Eagles Lupopo became a household name in the region, touring from Uganda to Zambia. The late 1960s and 70s was a period of transition in East African music. A number of musicians were beginning to define the direction of the emerging benga style, which became the distinctive sound in 8 | Policy Journal - Issue No.2 Quarter 1 2012 Kenya. This was a pop style dating back to the 1950s when musicians began adapting traditional dance rhythms of the stringed instruments like the nyatiti (the lyre) and the orutu (fiddle) to the acoustic guitar and later to electric instruments. However, musicians arriving in Nairobi from Tanzania and Congo (then known as Zaire) offered a pan-East African sound, based on rumba with Swahili lyrics. The economic opportunities in Kenya proved to be a magnet for musicians from Dar and Kinshasa. Some of these bands incorporated some of the feeling and sound of Kenyan benga, the punch, and sparkling guitars and added this to rumba, to create a new unique musical style The years after independence had witnessed a boom in the Tanzanian music, thanks to State patronage of bands. Musicians of groups like Nuta Jazz, Vijana Jazz, Jamhuri Jazz Band and Cuban Marimba were paid official salaries and some were employees of government departments. Most of these top bands used to visit Kenya at least once a year for public performances while others like Simba Wanyika set up their base in Nairobi permanently. Tanzania had virtually no recording studio. On the mainland the only recording institution was Radio Tanzania Dar Es Salaam (RTD). Once or twice a year, the bands came to the one-track studio for a session, recording five songs at a time. The Radio got music for its programs, which were heard on shortwave band across East Africa, the bands in turn gained fame and publicity for their live performances. From the late 60s, the State-owned radio consistently sponsored and exclusively featured Tanzanian bands on its programs, contributing to the development of a Tanzanian music style or Mtindo. The relationship sometimes turned sour, as when DDC Milimani Park Orchestre decided not to record for RTD because some of their recordings had been pirated and released in neighbouring Kenya, where Tanzanian music was in high demand. It turned out that almost all records of Tanzanian bands released for a long period in the 70s were stolen from, or illegally copied from the library of RTD. No proper payments or contractual arrangements were made and the musicians were not able to track the sales of their music. Marijani Rajab of Dar International once complained that unscrupulous traders had smuggled his tapes out of Tanzania and sold them to producers in Nairobi. www.eastafricanmusic.com Some of Konde’s best songs like Tausi Ndege Wangu, Olivia Leo and Majengo Siendi Tena, were recorded in Nairobi and Dar Es Salaam between 1947 and 1956, laying the foundation for the East African sound that was to flourish in future decades. Music the Language of Integration? Meanwhile the early years of the 70s found Nashil Pichen and the band Eagles Limpopo on tour in Lusaka, Zambia. Here the band met Congolese musicians from the group Super Vox, who had traveled from Lubumbashi in Shaba Province. Super Vox established a winning formula of recording rumba in the different languages, like Nyanja in Zambia, Kiswahili for Kenya and Tanzania and, of course Lingala for Congo. In Lusaka, the group was thrilled to meet Pichen and Co and to hear about the vibrant music scene in Kenya. So, in 1974 they headed for Nairobi, one of the main capitals for music in Africa. Here, they found that there was already another group called Super Vox and so they changed their name to Super Mazembe (earth movers). Mazembe competed for popularity with fellow Congolese groups already based in Nairobi, including Les Mangelepa, Les Kinois and the Tanzanian band Les Wanyika. Kinois (Lingala for “the people of Kinshasa”), which at the time was led by Samba Mapangala, had crossed from Zaire into Uganda in 1976, before landing in Kenya the following year. The band recruited a Kenyan guitarist, Jacob Okello and at the height of their fame sold 40,000 copies of the hit single Malako. Many bands were tied by contracts to specific venues, but Mazembe crisscrossed Kenya and also performed in Tanzania and Uganda. The group set East Africa alight with hits like Kasongo, Nguashi Ntimbo’s Shauri Yako, and even recorded an audacious Lingala version of the Beatles’ Words of Love. The Congolese wave also swept though Tanzania with bands like Orchestre Maquis introducing guitars to complement the hitherto unrivalled horn section and discarding Lingala lyrics in favor of Swahili idioms. Baba Gaston Ilunga wa Ilunga led the migration of musicians out of Kinshasa and into East Africa, touching base first in Tanzania and eventually on to Nairobi. Like his fellow travellers, Mose Fan Fan, Lovy Longomba and Samba Mapangala, Gaston brought with him the potent Congolese rumba. In 1978 “Dr Remmy” Ongala (Sura Mbaya) arrived in Dar from Kivu via Uganda where he had enjoyed a brief spell with the group Grand Mika Jazz. Ongala who was eventually granted Tanzanian nationality, was to hold sway over East African music with his mix of Congolese Soukous and Swahili rhythms (mdundiko), for more than 20 years until his death in December 2010. There was a fierce battle in Tanzania between two bands, both from the town of Morogoro, which thrilled music lovers across East Africa. Mbaraka Mwinshehe, the burly singer and guitarist who was known as the Franco of East Africa (his musical style and physique resembled that of Congo’s Luambo Makiadi) engaged in lyrical ‘war’ with compatriot Juma Kilaza of the Cuban Marimba band. At one point Mbaraka sang Jogoo wa Shamba hawiki mjini (the village cock does not crow in town), while Kilaza responded with Dawa ya moto ni moto (fight fire with fire). The political relations between the leaders of Kenya, Uganda and Tanzania led to the breakdown of the East African community in 1977 and the closure of border posts between the three countries for several years. In October 1978 Mbaraka Mwinshehe and his 10 piece band, Super Volcano traveled to Nairobi to record their fifth album at the Phonogram studios. The band’s instruments were held by immigration officials at the Kenya – Tanzania border for over two months which forced Mbaraka and his band to play occasionally at little known night spots in Nairobi while awaiting the cargo to be cleared. It is these travails that led the musician to write the song Shida, which some fans reckon was a prophecy of his last days on earth. Mbaraka and his band performed the song for the first time during a show at the Kenya Polytechnic, just weeks before he died in car accident on the Mombasa – Malindi highway in January 1979. He had been contracted to Phonogram (Kenya) Limited for 12 years before his passing at the age of 35 and left a legacy as the most influential Swahili language musician in East and Central Africa. Mbaraka was also a member of the Tanzania Music Council, which at the time of his death was forging closer cooperation between musicians in Tanzania and Kenya. Another Tanzanian Charles Ray Kassembe, who was a protégé of the late Mwinshehe, took up the leadership of the Volcano band after the maestro’s death and played at various venues in Nairobi in the early 80s. One of the first Tanzanian groups to migrate to Kenya was Arusha Jazz, the predecessor of the mighty Simba Wanyika (Lion of the Savanna). Founded by Wilson Peter Kinyonga and his brothers George and William, the group began performing in Mombasa in 1971. The following year, they began recording for Phonogram and moved to Nairobi, recruiting their compatriot Omar Shaban on rhythm guitar and Kenyan bass player Tom Malanga. Over the next twenty years Simba Wanyika were the dominant group in Nairobi’s club scene and made tonnes of recordings even though the original group split several times in subsequent years. Tanzanian lead guitarist John Ngereza who had been playing in Kenya with the Cont. on Pg.17 Policy Journal - Issue No.2 Quarter 1 2012 | 9 By Adhoch Abuga South Sudan Secession: Opportunities Abound for Kenyan Economy A fter decades of political strife, the Southern Sudan referendum held in January 2011 gave birth to the world’s newest state. The close to 4 million voters in the semi-autonomous region overwhelmingly voted for secession from the North; splitting Africa’s largest country into two. The vote was viewed by South Sudanese as freedom from economic and political marginalisation. Total independence was celebrated on July 9th 2011, and the country subsequently became the 193rd member of the United Nations. Situated in the Southern region of Sudan, the landlocked region that borders 10 | Policy Journal - Issue No.2 Quarter 1 2012 Ethiopia to the east, Kenya, Uganda and the Democratic Republic of Congo to the south and Central African Republic to the west occupies 644,329 square kilometers. As a result of the secession of South Sudan, Eastern African countries are highly optimistic of reaping trade and investment opportunities worth billions of dollars to help develop the new country whose infrastructure is underdeveloped following the civil war. Geographically, South Sudan consists of ten states which formerly composed the provinces of Equatoria (Central Equatoria, Eastern Equatoria and Western Equatoria); Bahr el Ghazal (Northern Bahr el Ghazal, Western Bahr el Ghazal, Lakes and Warrap); and Upper Nile (Jonglei, Unity and Upper Nile). A chunk of the states are agriculturally viable and immense economic returns stand to be reaped if modernised and commercialised agriculture is initiated. Moreover, business opportunities are aplenty as the region boasts of diverse economic potentialities. One of the major natural features of South Sudan is the River Nile whose many tributaries have sources in the country. The river traverses the entire country and facilitates trade, administration and urbanisation in the country. The river and its many tributaries also provide access to almost unlimited sources of water which South Sudan Secessaion Opportunities Abound for Kenyan Economy services the land, making it fertile to support diverse vegetation and crops. The region is blessed with many natural resources such as petroleum, iron ore, copper, chromium ore, zinc, tungsten, mica, silver and gold. The country’s economy, like is the case in other developing countries, is heavily dependent on agriculture. It’s equatorial climate is characterised by high humidity and lots of rainfall (rainy season varies from region to region but is generally between April and November) that places it at a pedestal in production of agricultural produce that include cotton, groundnuts (peanuts), sorghum, millet, wheat, gum, sugarcane, cassava, mangos, papaya, bananas, sweet potatoes, sesame, sheep and other livestock. Given the many years of civil war and the renewed hope following the successful referendum, the country is literally being built from scratch. The road network, housing, banking sector, insurance, schools and other amenities in the huge country all need urgent attention and the focus is on the donor community, the government, and above all, commercial investors from within and outside the country. South Sudan is an emerging market. A lot has been done since the signing of the CPA in 2005. Juba, for instance, has been transformed from the virtual ghost town it used to be into a remarkable commercial hub that was unimaginable just a couple of years ago. However, a lot needs to be done in terms of putting the necessary infrastructure and systems in place. The South Sudanese economy benefits from the service industry which is driven by trade, restaurants and hotels, finance and insurance, real estate and business services, transport and communication and government services. There are also a number of Non-Governmental Organisations (NGOs) and international organisations engaged in several economic sectors, especially humanitarian and infrastructural development. In spite of this impressive economic growth, most South Sudanese are still poor, a situation that can be attributed to historical factors including several decades of civil strife, war and gross marginalisation. Nonetheless, South Sudan is a virgin country and a lot of businesses are currently setting shop in Juba city as well as other towns in the ten states such as Wau in Western Bahr el Ghazal State and Malakal in Upper Nile State. Economic Outpost South Sudan has been described as Kenya’s economic outpost, with close to 70,000 Kenyans1 doing business there in addition to the government’s investments. Coming from the biggest economy in the East Africa Community, Kenyans already wield immense control of South Sudan’s private sector, working in the construction, air transport, hospitality, banking, insurance, infrastructure development and informal goods markets, as well the NGO sector. More investment opportunities thrive in aviation spare parts, engineering and supplies, Information and Communications Technologies (ICT), printing and stationery as well as catering, motor vehicle repairs and maintenance and supermarkets. Kenya’s exports to South Sudan almost doubled between 2005 and 2009, rising to 12.8 billion shillings ($157.7 million) from 6.8 billion after South Sudan rebels signed the peace agreement with Khartoum’s administration that paved the way for the referendum.2 With the successful vote for independence, South Sudan has indicated a desire to join the East African Community. This move will encourage investors to reap the dividends of peace in the new country besides opening the way for foreign traders to tap into the country’s oil reserve and infrastructure projects. Multi-nationals are increasingly seeking to serve the market from their Kenyan bases. Firms such as Nestle Kenya and Unilever East Africa have expressed their intention to get a larger foothold of the Eastern Africa market with South Sudan emerging prominently in their business plans. Unilever East Africa, which sells products such as Royco, Omo and Vaseline, is investing 3 billion shillings in Kenya to boost production, distribution and sale processes.3 More economic explorations are expected following the successful secession vote. Kenya’s geographical position gives her an upper hand to immeasurably gain from the referendum, given that it is one of two countries in the East African community that are not landlocked. Tanzania, the other country that is not landlocked, has no direct road or railway links with South Sudan. The presumed possibility of attainment of lasting peace and tranquility will provide a conducive business environment for Kenyan investors. Kenya stands to gain from an array of sectors including the aviation industry, the telecommunications sector, banking, insurance, mass media (including broadcasting), tourism, education, health and infrastructure development among others given that these sectors are relatively developed as well as the readily available skilled manpower. Kenya is also widely expected to benefit from South Sudan’s oil deposits 1 Samwel Kumba and John Ngirachu, Sudan Votes, Kenya Hopes, Daily Nation, Posted Friday January 7, 2011, http://www. nation.co.ke/News/africa/Sudan+votes+Kenya+hopes+/-/1066/1085782/-/gq179qz/-/index.html 2 http://www.reuters.com/article/2011/01/07/us-sudan-referendum-trade-idUSTRE7064WH20110107 3 Allan Odhiambo,Industries Opt for Kenya as New Hub for Regional Trade, Business Daily, Sunday March 13,2011, Posted Tuesday, January 25 2011 at 00:00 http://www.businessdailyafrica.com/Corporate%20News/Industries%20opt%20for%20 Kenya%20as%20new%20hub%20for%20regional%20trade/-/539550/1095218/-/n64yo8/-/index.html 4 International Crisis Group,2010,Sudan: Regional Perspectives on the Prospect of Southern Independence Africa Report No.159 PDF,http://www.crisisgroup.org/en/regions/africa/horn-of-africa/sudan/159-sudan-regional-perspectives-on-theprospect-of-southern-independence.aspx 06 May 2010 Policy Journal - Issue No.2 Quarter 1 2012 | 11 South Sudan Secessaion Opportunities Abound for Kenyan Economy which account for 85 percent of Sudan’s estimated 6.614 billion barrels. Democratic Republic of Congo (DRC) and beyond. In its May 2010 report titled Sudan: Regional Perspectives on the Prospect of Southern Independence Africa Report No.1594 the International Crisis Group (ICG) says Kenya stands to benefit a great deal from the political development due to its instrumental role in mediating peace efforts in the Sudan. According to the report by the Brusselsbased think tank, the South’s search for an alternative transport corridor to reduce its dependence on the North has opened for Kenya an opportunity to attract billions of dollars in fresh infrastructure investment and an advantage in the scramble for foreign direct investments to East Africa. “Having hosted and led the regional Intergovernmental Authority on Development (IGAD) peace process that yielded the CPA, Kenya has a particularly strong interest in seeing it implemented successfully. As the economic powerhouse in the region, it stands to benefit from the development of a considerable market and major infrastructure in the South, including as a conduit for oil. Kenya long managed to be pro-South without being anti-North”, says the report dated 6 May 2010. Kenya will also greatly benefit from three major proposed projects connecting East Africa including a new sea port in Lamu, on Kenya’s Indian Ocean coast; a railway network updating existing lines and connecting Juba to Kenya, Uganda and Ethiopia; and an extension of the Trans-African Highway Network linking South Sudan to Kenya’s Mombasa port. Kenyan and South Sudanese officials are also discussing a 1,400 km pipeline from Juba to the Lamu port, which could yield significant dividends and open up a broader swathe of Kenyan territory to economic modernisation. Several international investors have expressed interest in the plan, which is likely to produce considerable competition for Juba’s favour. The report adds that Kenya has strengthened its economic links with Juba in recent years. “The opportunities to do more are recognised as important for national development, but are also welcomed by wealthy private investors and ordinary jobseekers”, says the report. It adds that government officials envision new markets for Kenyan exports not only in South Sudan itself, but by way of it to the Central African Republic (CAR), the 12 | Policy Journal - Issue No.2 Quarter 1 2012 A new pipeline would create an alternative to the existing export route, which runs some 1,600 km to Sudan’s Red Sea Port (Port Sudan, in the North), thereby reducing the landlocked South’s dependence on Khartoum. Banking Banking, like all the other sectors of the South Sudanese economy, was affected during the years of the civil war. Before the signing of the CPA, only a handful of some banks based in Northern Sudan had branches operating in the South, mainly in the key towns such as Juba, Wau and Malakal. The signing of the CPA was a turning point for the banking sector in the Sudan in general and South Sudan in particular. There are several banks and forex bureaux operating in South Sudan, especially in Juba. These include major financial service providers such as the Kenya Commercial Bank, Nile Bank, Buffalo Commercial Bank, and Equity Bank among others. These institutions offer services such as money transfers, business financing, foreign exchange market and money handling. With the separation from the North, the Kenyan banking sector is set to greatly benefit from the huge market in South Sudan. One of Kenya’s largest financial institutions, Kenya Commercial Bank, is already a key player in South Sudan’s financial sector. Apart from its presence in Uganda, Tanzania and Rwanda, the bank now has 11 branches in South Sudan, offering a wide range of banking and financial services, specialising in the provision of medium and long-term finance as well as mortgage financing. The subsidiary offers banking services with tailor- made products and services for non-governmental organisations, individuals and the young civil service in the Government of Southern Sudan. With its head office in the South Sudanese capital Juba, KCB (Sudan) Limited has six branches in Juba and others spread across the states: Yei (Central Equatoria), Rumbek (Lakes), Yambio (Western Equatoria), Bentiu (Unity), Malakal (Upper Nile), Torit and Nimule (Eastern South Sudan Secessaion Opportunities Abound for Kenyan Economy Equatoria), Kuacjok (Warrap), Aweil (Northern Bahr el Ghazal), Wau (Western Bahr el Ghazal) and Bor (Jonglei). edge they need to compete on pricing – that has become a key driver of market share expansion. With a population of 12 million, South Sudan virtually remains a virgin market without homegrown manufacturing sector to meet local demand for consumer goods.5 Another Kenyan-owned bank, Equity Bank, has also established operations in South Sudan with branches already in Juba, Hai Malakal and Yei. The bank plans to set up outlets in Wau, Kaya and Nimule towns in the nearest future. In its pursuit to diversify investments, the bank has also discussed with the Government of Southern Sudan (GoSS) its interest in oil development. Several foreign investment institutions have explored using Kenyan banks as intermediaries for ventures in South Sudan. Insurance Kenya also stands to benefit from the relatively new but growing insurance industry. Already, a number of Kenyan insurance companies have established branches in South Sudan, with UAP leading the pack. As a result, Kenyans, who form the majority, have secured employment besides exporting their expertise to the South Sudanese as they plough back the returns to the Kenyan economy. Transport Kenya is positioned to pitch itself as a logistics hub and transport conduit for an independent but landlocked South Sudan. This will provide an alternative route for its oil, which has been the greatest contributor to the incessant border disputes between North and South Sudan. Analysts say that China and Japan who are eyeing the resource will readily finance such an alternative exit route. The resultant job opportunities and economic boost will greatly contribute to Kenya’s Gross Domestic Product. Kenya has already launched a search for investors to fund its $22 billion share of a planned corridor connecting Ethiopia and Sudan to the Kenyan coast with railways, roads, telecommunications cables and a 1,400 kilometre pipeline. According to a report by the International Crisis Group (ICG), Toyota Tsusho, the investment wing of the carmaker, is one of the companies interested in the $1.5 billion pipeline. The Southern Sudan government has also kicked off plans to build a high speed railway line to Uganda aiming to link up with the planned high speed standard gauge line between Mombasa and Kampala. Kenya and Uganda are also expected to benefit from exports of agro-based products and raw materials to South Sudan and access affordable crude oil in return. Kenya is particularly expected to benefit from the thousands of jobs that the large infrastructure projects are expected to create and take in a large share of the 750 billion Shillings that foreigners plan to pump into the works. Completion of the mega- projects is also expected to improve the flow of Kenyan goods into the regional market, giving its manufacturers the competitive 5 Michael Omondi, Kenya Reaps Billions from Sudanese Separation Plan, Business Daily, Sunday March 13,2011, Posted Tuesday, June 1 2010 at 00:00 http:// www.businessdailyafrica.com/Company%20Industry/ Kenya%20reaps%20billions%20from%20Sudanese%20 separation%20plan/-/539550/929646/-/item/1/-/da21fw/-/ index.html More opportunities exist in the development of road infrastructure in South Sudan where most states are inaccessible due to poor or total absence of road networks. Already, a number of road construction firms have embarked on tarmacking a number of roads in the different states, mostly courtesy of funding from development partners. The independence of South Sudan is a great opportunity for more Kenyan companies to establish operations, hence exporting local skills. Manpower It is common knowledge that enough and skilled manpower is crucial for the development of any country. Kenya and South Sudan have already initiated various programmes that support skill and manpower exchange in such sectors as the civil service, ICT, aviation, hospitality, real estate and security among others. Moreover, Kenya stands to benefit a great deal by setting up institutions offering training in various disciplines across South Sudan. Those established locally can also exploit the possibility of attracting South Sudanese to come to Kenya for training. In the same vein, the establishment of all governance institutions and clear demarcation of its borders, South Sudan’s status as a sovereign state will necessitate the expansion and upgrade of the Consulate of the Republic of Kenya in Juba into a full embassy. This will create more job opportunities and avenues for enhanced diplomatic relations with South Sudan. It will further boost trade Policy Journal - Issue No.2 Quarter 1 2012 | 13 South Sudan Secessaion Opportunities Abound for Kenyan Economy ties as well as other spheres of bilateral relations. Housing A majority of South Sudan’s population lack adequate housing, not to mention quality housing at that. Statistics show that 83 percent of the population lives in tukuls (cone-shaped mud huts, usually with thatched roofs). Others live in straw or wooden structures while others dwell in tents. The influx of returnees from the north and other areas has added onto the strain on the available facilities. It is also worth mentioning that even the urban centres have inadequate housing as well as sewerage facilities. Many workers live in low quality housing even as their numbers keep swelling by the day. This provides Kenyan building and construction firms with a chance to venture into South Sudan to cater for the rising demand for adequate and quality housing. Tourism The tourism potential of South Sudan is immense. However, due to historical challenges, the sector is not fully developed. Nevertheless, there are many ongoing initiatives by the Southern Sudan government as well as other development and business partners. Though emerging from several decades of war, Southern Sudan’s grasslands and swamps are a natural home to thousands of elephants, zebras, hartebeeste, lions, buffalo, bongo, monkeys, chimpanzees, several species of antelopes and gazelles, various species of wild hogs, giraffes and other mammals. Some conservationists hold the opinion that the number of animals in South Sudan’s wild rivals the Serengeti and other renowned game parks in neighbouring Kenya and Tanzania. Wildlife conservationists and researchers estimate that there are over 1 million white-eared kob antelopes; 300,000 14 | Policy Journal - Issue No.2 Quarter 1 2012 mongella gazelles; 200,000 tiang (African antelopes of the genus Damaliscus); and several oryxes. The major sanctuaries are Boma National Park, Bandingilo National Park and the Zeraf Wildlife Reserve, among others. Given the high potential of the tourism industry and with the opening of the region, Kenyan investors in the sector including tour operators, hoteliers and other stakeholders will greatly reap from the untapped potential. This will supplement the efforts already initiated by the Government of Southern Sudan to support the maturing industry. A number of hotels are now operating in the region in very close proximity to the tourist attraction sites. Education Countries within the East African Community have enjoyed relative peace since their independence and have had opportunities to grow in all sectors including education. As South Sudan struggles to re-build its education system and infrastructure, the Kenyan education sector stands a great chance 6 Southern Sudan Centre for Census, Statistics and Evaluation (SSCCSE),Statistical Yearbook for Southern Sudan 2010,PDF, http://ssccse.org/storage/statsyear-books/Statistical%20Year%20Book%20For%20 Southern%20Sudan%202010%20Final%20.pdf of benefiting from the thirst for quality education by South Sudanese. Statistics from the Statistical Yearbook for Southern Sudan 20106 published by the Southern Sudan Centre for Census, Statistics and Evaluation (SSCCSE) indicate that the education sector is still underdeveloped with a mere 27 percent of the 15 years and above age bracket being literate. The literacy rate for males stands at 40 percent compared to 16 percent for females. Additionally, 53 percent of the urban adult population is literate, compared to just 22 percent of the rural adult population. The National Baseline Household Survey (2009) also puts 40 percent of the population between 15 and 24 as literate. The Gross Enrolment Rate for primary school in 2009 was 72 percent with the Net Enrolment Rate (NER) at the same level in the same period at 48 percent. Similar gaps are present in the secondary and tertiary levels of education. It is this situation that Kenyan education entrepreneurs stand to maximise on by setting up schools across South Sudan. Majority of schools in South Sudan use the Kenyan education system. In the process, Kenyan construction firms will greatly benefit from tenders to construct Cont. on Pg.20 Questionnaire 1. Overall, how satisfied are you with the content of the journal? Very unsatisfied Unsatisfied Somewhat satisfied Very satisfied Satisfied 2. If you rated your satisfaction with the content of the journal as either as very satisfied, unsatisfied or somewhat satisfied, please let us know what you did not like. 3. 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Policy Journal - Issue No.2 Quarter 1 2012 | 15 Stamp To: Policy Journal Institute of Economic Affairs P.O.Box 53989 00200 Nairobi, Kenya 5th Floor, Block D, ACK Garden House Tel: (+254-20) 2717402, 2721262 Fax:(+254-20) 2716231 E-mail: [email protected] Website: www.ieakenya.or.ke Stamp To: Policy Journal Institute of Economic Affairs P.O.Box 53989 00200 Nairobi, Kenya 5th Floor, Block D, ACK Garden House Tel: (+254-20) 2717402, 2721262 Fax:(+254-20) 2716231 E-mail: [email protected] Website: www.ieakenya.or.ke 16 | Policy Journal - Issue No.2 Quarter 1 2012 Music the Language of Integration? Continued from Pg.9 Music the Language of Integration? Congolese band Bwambe Bwambe joined one of these off shoots from the original Wanyika. Les Wanyika began performing at Nairobi’s Garden Square and made a big name for themselves with the massive hit Sina Makosa. By the 1970s political turmoil in Idi Amin’s Uganda was having an impact on the music business in East Africa. A group from Kampala called The Super Forvics made their first trip to Kenya in 1972 with a bass player called Sammy Kasule. Three years later, at the peak of Amin’s reign of terror, Kasule would slip out of Uganda and make his way across the border back to Kenya. It was while playing in the band Somajeko that Kasule was spotted by Taso Stephanou, a Greek producer in Nairobi who was looking for a bass player for his new group Makonde. Kasule was invited for a jam session with the band and was promptly recruited to join a line up that included top musicians like Francis Njoroge and Shaban Onyango. Makonde was one of the most successful bands in East Africa during that era that included a performance alongside visiting international acts like Boney M and Aswad. Kasule wrote the memorable love song Marie Wandaka, a single which sold over 10,000 copies in 1979. By the 1980s Sammy Kasule was an ever present feature on the East African charts with his solo singles like Kukupenda, Pesa Kuja and an English version of the Nguashi Ntambo classic Shauri Yako. He would later also join a group of Congolese musicians resident in Nairobi to form the band Vundumuna in 1985. Kasule was by no means the only itinerant Ugandan musician during this era. Another talented guitarist and singer had been doing the rounds of the music scene in East and Central Africa. Philly Lutaya, then aged 19 had traveled by road to Kinshasa where he was exposed to the vibrant Congolese rumba playing devastating revelation that he was living with HIV/AIDS. He later recorded an album called “Alone and Frightened” which together with an emotional documentary brought attention to the stigmatization facing AIDS patients at a time when East Africans had not come to terms with the reality of the disease. with the band Vox Nationale du Congo. The Congolese sound was also pervasive in Uganda and a former member of Tabu Ley’s L’Afrisa International set up an East African base with regular performances in Kampala. Michellino Mavatiko performed songs in Swahili, Lingala and Spanish with a fusion of Afro Jazz and Soukous that influenced Ugandan musicians like Philly Lutaya. Lutaaya like many other Ugandans left the country for Kenya where he began as a session player at different recording studios in Nairobi. He also linked up with compatriot Sammy Kasule in the band Orchestra Jambo Jambo. Other musicians from Uganda who were in Kenya at the time included Tony Senkebejje who had set up his base playing at the hotel circuit in Mombasa. The period in Nairobi saw Lutaaya’s career flourish in the multi cultural setting, partly with the band Les Kinois and also with his solo records like Nsunzi Watali, Asaba and Univumie. He eventually left Kenya for Sweden in 1984, a similar path to that taken by Kasule in the later part of the decade. Lutaaya and a group of Ugandan exiles in Stockholm formed a band called Miti Mito, which he said was the product of their time in Kenya and each member was destined to move to Sweden after the preceding one had arrived. In a tragic twist of fate Lutaaya would return to Kampala in 1989 with the Other Ugandan musicians who crossed over into Kenya include Evelyn Grace who started singing in hotels at Coast before getting a spot at Nairobi’s Intercontinental Hotel while J.J Otieno made a huge impact with the group Earthquake when they released one of the biggest hits of 1984 called Kutanga Tanga. One of East Africa’s greatest flutists, Samite Mulondo, who had fled to Kenya in 1982 as a political refugee, joined the band African Heritage, playing alongside Ayub ‘Job’ Seda, Francis Njoroge, Gido Kibukosya and Mbarak Achieng. Nairobi was clearly the musical hub of East Africa from as early as the mid 1960s with the arrival of the first lot of Congolese and Tanzanian musicians. This exodus was precipitated by political turmoil, as in the case of Uganda and to some degree, Congo (Zaire), but also the economic opportunities that Kenya offered. The presence of the major record companies such as EMI, CBS and Polygram and the only pressing plant for vinyl records in the region (East Africa Records) presented an irresistible attraction to the best musicians from the surrounding countries. Most of the Swahili and Congolese music produced in Kenya originated with the multinational giants like Polygram and CBS/Sony or was released by independent labels run by British or Asian Kenyans. Mike Andrews and his A.I Records based in Nairobi is an example of one such company that handled many of the East African bands throughout the heydays of the 70s and 80s. The appeal of the big name bands to Policy Journal - Issue No.2 Quarter 1 2012 | 17 Music the Language of integration? a broad section of the East African population was the language of the music which was a local variant of the Congolese sound or Swahili rumba, a unique hybrid of Kenya-Tanzania sound. Les Mangelepa for instance received a gold disc in June 1980 for hitting the 60,000 sales mark with the hit song Nyako Konya, a tune which was hailed as a truly East African hit. This was only the second time for a song to attain such a status, the first having been Gabriel Omolo’s Lunchtime in 1974. During a visit to Nairobi in 1978, Congolese saxophonist Verkys, whose record label Veve distributed music from Kinshasa through Polygram (Kenya), said that with the state of the art facilities available at the time, there was no reason why the quality of music from Kenya should not have been the best in Africa. Incidentally it was the Congolese band OS Africa that opened the Starlight Club in 1964 and another such band Boma Liwanza was the resident band there for a time in the 70s. Armstong once recalled how the then Zambian President Kenneth Kaunda came into Starlight, paid the KSH. 5.00 entry fee and proceeded to enjoy the night from the anonymity of bar. It was Kaunda’s view that clubs like this be put up in every African capital to hasten the social integration, especially in the years after independence. The trend set by the first two generations of East African musicians in breaking down the political and economic barriers to create an integrated market for culture has only been accelerated in recent years. In the 1990s Uganda’s Joseph Manyanja (Chameleone) traveled to Burundi and Rwanda trying to find his musical feet before eventually settling in Nairobi. Chameleone joined forces with fellow Ugandan Bebe Cool and Kenya’s Redsan to create a formidable though short lived musical force. This collaboration yielded hits like Bageya, which was a No. 1, hit across East Africa. No doubt with an eye on the greater East Africa, many of Chameleone’s biggest hits are written in Kiswahili, Mama Mia, Kipepeo, Bei Kali http://bosquesonoro.blogspot.com It is also worth noting that the bands based in Nairobi had a membership that was drawn from across East Africa and because their hits transcended the borders, they were at home performing before crowds at venues like Nairobi’s Starlight Club. Robbie Armstrong who managed the Starlight, estimated that 12,000 people went in through the doors of the club every month to enjoy the live music of bands like Air Fiesta and Samba Mapangala’s Virunga. His initial plan was to open similar clubs in Arusha, Tanzania and Jinja, Uganda, although that didn’t materialize. 18 | Policy Journal - Issue No.2 Quarter 1 2012 and Mambo bado. The liberalisation of the media in Tanzania in the post Nyerere era, created the opportunity for a genre of urban music called Bongo Flava to emerge as an East African phenomenon. Tanzanian youth started rapping in the 1980s inspired by American hip hop and soon enough developed their own unique way of creating this music. Today, this sound has been enriched by local melodies and Kiswahili lyrics peppered with phrases in English. Bongo Flava now transcends the borders and can be heard playing in the clubs and the radio stations in Nairobi and Kampala, just as much as in Dar Es Salaam. The financial viability of the music business is a factor in the growth of East African music. In the old days the bands had many members and performers and depended on the largesse of club owners who also controlled the musical instruments. Today, the artistes are seen more as ‘pop stars’ and entrepreneurs in the mould of their U.S idols, commanding up to KSh 300,000 in appearance fees at a time. One of the first Bongo Flava artistes to cross borders was T.I.D, whose debut album Sauti ya Dhahabu sold 350,000 copies across Africa. The Tanzanian then collaborated with Necessary Noize and Mery Myra of Kenya and Uganda’s Klear Kut. The production team behind him included some of East Africa’s finest: Tedd Josiah, Homeboyz, Steve Jean and P Funk. Most of these stars are in their twenties and view fashion and videos as an important tool of promotion. East African TV was a trendsetter as a purely music video channel broadcasting across Kenya, Tanzania and Uganda. The concept of reality television has gripped the region as witnessed in the popularity of the Tusker Project Fame where contestants are thrown together in a house where their skills go under the spotlight of Music the Language of Integration? each month. In Uganda, where musicians depend less on royalties and more on performance fees, the Performing Rights Society says the music industry has the potential of generating up to USH 3 billion (USD 1.4 million) every year. This they say would rank music as among the Top 20 highest taxpayers in the country. As it is, the Society collected a paltry USH 16 million (USD 7, 804) last year viewers from the East African countries. The recent winner of this show was a 25year-old Kampala resident called Davis Hillary Ntare who beat other contestants to emerge the winner of KSH 5 million and a recording contract with South Africa’s Gallo Records. Rwanda and Burundi have now joined the three East African countries to spearhead economic, social and political integration of the 120 million people of the region, Clearly, the cultural integration of East Africans is taking place at a more accelerated pace than other aspects of life in the region. The youth of the region proudly promote their homegrown music and use their pop culture to address social change and the critical issues of the day, from HIV AIDS to peace building. One of the most popular artistes in East Africa today is a man who came to Kenya in 1995 as a refugee, fleeing turmoil in his home country of Burundi. Jean Pierre Nimbona aka Kidum first played with the Hot Rod Band before setting up his own outfit called Boda Boda. The name comes from a popular mode of bicycle transport which originated on the Kenya – Uganda border and which Kidum says is symbolic of the way his own music transcends across the borders of East Africa. Some of his biggest songs are collaborations with fellow East Africans, like Tanzania’s Lady JD on Nitafanya, Karibia with Kenya’s Nameless and the infectious hit Sitarudi Nyuma with Uganda’s Juliana Kanyomozi. Kidum says the artistes of the region are miles ahead of their political leaders on integration.” The politicians are arguing on who the next Secretary General of the East African Community will be, while we the musicians from the member states are working together effortlessly,” he says. A leading provider of mobile phone downloads in East Africa estimates that the business opportunity is worth USD 4 million a year. Cellulant, which is a Nairobi based company, says the Government takes 26 per cent in taxes per download, with the operator taking up to 60 per cent and 10-12 per cent paid to artistes in royalties. The Common Market Protocol for East Africa which took effect in July 2010 marked the beginning of the process which ultimately will result in a political and economic union for Kenya, Tanzania, Uganda, Rwanda and Burundi. The Protocol allows citizens of East Africa to freely relocate within member states, bringing education and expertise where they are needed most. A successful artiste can attract anywhere between 200,000 and 300,000 downloads over 3 months. The economy of music in the region has grown by leaps and bounds in recent years thanks to corporate endorsements, performance fees and royalties. There are huge possibilities that exist before the full impact of the economy of music can be realised. However, the foundation for this lucrative business is already firmly in place and it will take a smart financial approach across the region to unlock the potential. The Music Copyright Society of Kenya reported revenues of KSH 171 million from licensing entertainment spots, concerts, mobile ringtones and public service vehicles like taxis and matatus (minivans). Broadcasting stations paid a further KSH 13 million up from just KSH 5 million the previous year. The highest paid Kenyan musicians like Nameless and Amani earn up to KSH 100,000 in royalties alone New media has stepped into the void left by the distribution networks of old. The physical structures of record companies and record stores have been replaced by the virtual industry of downloads and digital music networks. East African artistes offer a perfect template for the political class in breaking down the existing barriers, overcoming mistrust and creating a powerful cultural and economic synergy. It is only by following this lead that the true economic and social potential of the 120 million people of the region can be realized. Policy Journal - Issue No.2 Quarter 1 2012 | 19 Continued from Pg.14 South Sudan Secession: Opportunities Abound for Kenyan Economy educational facilities and infrastructure. Similarly, setting up of schools locally to cater for South Sudanese students will contribute to the growth of the Kenyan economy. Additionally, it is envisaged that the exporting of Kenyan education manpower will shoot up as demand for more teachers arise in South Sudan. Already the Kenya National Examinations Council (KNEC) offers examinations to students in South Sudan and the body expects that the country may fully adopt the Kenyan education system, a situation that will most likely boost ties between the two neighbouring countries. The body also hopes to help the new country develop its own certifying institution.7 Manufacturing The industrial sector in South Sudan is essentially composed of light consumer goods industries involved in manufacturing handicrafts, building and construction, electricity and water and mining. South Sudan also has a vast forest cover which is rich in diverse tree species which provide rare timber, wood fuel, fruits, medicinal barks or roots and oil. The forest also creates a good environment which may be used to cultivate agricultural products such as mushrooms. However, the massive agro-manufacturing industries that were established prior to the civil war are now shadows of their former selves, with sophisticated machinery lying unused and some was rusting away. A typical example is the Nzara Agricultural Complex in the agriculturally-rich Western Equatoria State, that remains one of the most economically sound investments in South Sudan. Kenyan entrepreneurs 7 Samwel Kumba and John Ngirachu, Sudan Votes, Kenya Hopes, Daily Nation, Posted Friday January 7, 2011, http://www.nation.co.ke/News/africa/ Sudan+votes+Kenya+hopes+/-/1066/1085782/-/ gq179qz/-/index.html 20 | Policy Journal - Issue No.2 Quarter 1 2012 stand a great chance of revamping such a facility and many others that remain unexploited. Another area with great potential for the Kenyan entrepreneur is the beverage manufacturing industry. South Sudan Beverages Limited (SSBL) remains the biggest beverage manufacturer in South Sudan. The separation is an opportunity for beverage companies operating in Kenya like the Diageo-owned East African Breweries and Keroche Industries to spread their wings to South Sudan. Coming at a time when alcoholic drink sales have gone down following the enactment of the Alcohol Act, the Kenyan companies stand a chance of ‘compensating’ for their losses by venturing into the South Sudanese market, where restrictions on alcohol consumption are not yet in place. Investment opportunities also exist in the mining, fisheries, pharmaceutical and power generation sub-sectors among others. The fisheries sector remains unexploited but the most lucrative, owing to the vast River Nile that is home to a variety of fresh fish. Given the dwindling productivity of Lake Victoria’s resources due to the choking hyacinth weed, Kenyan entrepreneurs now have a chance to invigorate the fish processing industry as well as in the provision of fishing equipment. Mass Media The Kenyan print and broadcasting media are set to be some of the highest beneficiaries of the new country. As was evident during the January referendum vote, Kenyan media houses commanded a regional lead with the Nation Media Group, the Standard Media Group and Royal Media Services stamping their authority alongside the world’s leading media brands. Similarly, owing to frequent interest and coverage of events in South Sudan, it seems quite clear that obtaining of broadcasting frequencies will not be a hurdle for the media houses, owing to the goodwill and enthusiasm as expressed by the Government of Southern Sudan. Similarly, a number of South Sudanese media houses heavily rely on Kenyan expertise and the birth of the new country and the much-anticipated enactment of the South Sudanese Media Act will provide a conducive environment for business. South Sudan Secessaion Opportunities Abound for Kenyan Economy Water, Health and Sanitation From professionals to construction engineers, Kenya stands to reap from the independence of South Sudan. With just over half of its population having access to improved sources of drinking water (with 67 percent of the urban population having an upper hand in accessing clean water). The rural population is still marginalised in the provision of basic services, water included. Similarly 80 percent of the South Sudanese population does not have access to modern sanitation facilities. The above have contributed immensely to high rates of the spread of communicable diseases; a situation that has led to the strain on the available health facilities. Kenyan entrepreneurs will greatly benefit from investing in this sector. This will supplement the initiative already being undertaken by non-governmental organization and the Government of Southern Sudan, through the respective state governments. Moreover, Kenyan medical personnel will now have an opportunity to employ their skills in South Sudanese health institutions. Airlines The aviation industry is another potential beneficiary of the secession of South Sudan. Already, a number of airlines have pitched tent in the South Sudanese capital Juba where up to 70 flights are being received every day at the Juba International Airport. Notable Kenyan operators on the route include Jetlink, which pioneered scheduled flights to Juba in 2005, and now flying twice daily from Nairobi, and East Africa Safari Air Express that operates one flight per day. Kenya Airways also commenced daily flights from Nairobi to Juba on June 7, 2010. Being an economic hub in the East African region, the Kenyan economy is expected to boost its revenue through enhanced use of the Nairobi-based Jomo Kenyatta International Airport as the connection route to Juba, not to mention the employment opportunities at the airline companies. Telecommunications The fledgling telecommunications sector in South Sudan presents a great opportunity for Kenyan entrepreneurs. The wide market and the gusto by South Sudanese firms in particular and South Sudanese in general to catch up with the latest developments in technology makes it even more attractive to invest in the sector. Although there is a high presence of mobile telephone companies in South Sudan, the data market remains unexploited compared to the voice business. Providers such as Sudani, MTN, Gemtel, Vivacell and Zain have capitalised to a large extent on the voice market. With the massive development of the data business by Kenyan mobile telephony providers like Safaricom, Airtel and Orange, it is clear that an additional market waits in South Sudan. Challenges In spite of the huge potential of the South Sudanese market, a number of likely obstacles to smooth and free trade need redress. The challenges range from complications in issuance of travel permits, business licences, insecurity and unfriendly tax regimes to improper treatment of citizens from Kenya. There is need to sensitise both sides on the need for co-existence for common development. This will require the commitment of both governments and stakeholders. Investment Environment In its bid to encourage investment in the new state, the Government of Southern Sudan (GoSS)8 has taken steps to cultivate and nurture a conducive investment environment in the country. It has put in place necessary procedures and systems to facilitate rapid business setup in the country through the respective ministries and commissions. GoSS also organises trade fairs in which potential investors are 8 Government of Southern Sudan, 2011,http://www.goss.org/ Policy Journal - Issue No.2 Quarter 1 2012 | 21 South Sudan Secessaion Opportunities Abound for Kenyan Economy able to meet government officers as well as their potential Sudanese counterparts in Juba and other places. These are all aimed at creating awareness on the investment opportunities for foreign firms and individuals, Kenya included. Some of the specific steps taken by the GoSS to promote investment in the country: • Establishment of Southern Sudan Investment Authority (SSIA); • Development of investment laws which spell out the investment guidelines in the country; • Equal treatment and opportunity for local and international investors; and • Enactment of specific laws that support investment by making provisions for attractive fiscal regimes, protection of industrial and intellectual property rights, credible guarantee of legal security and investment stability, repatriation of profits and dividends, custom duties exemptions, as well as reduced red tape and bureaucracy. The specific investment policies include: • Policy of non-discrimination - Foreign investors are allowed to invest in and run businesses in any sector in Southern Sudan; • Guarantees against expropriation - GoSS shall not nationalise any enterprise. Further, no investor will be compelled (by law or otherwise) to Advertise 22 | Policy Journal - Issue No.2 Quarter 1 2012 cede any part of investment capital; • Protection of Intellectual Property laws - GoSS shall protect all intellectual property and rights of all persons and investors. All trademarks, copyrights, patents among others will be enforced; • Access to Public Information Investors have open and direct access to all laws and decisions of courts, other adjudicative bodies and to any public information; • Repatriation of capital, profits and dividends - Investors have the right to freely repatriate their money in freely convertible currency or dispose of it in any manner they deem fit, subject to tax and other lawful obligations; and • Dispute Resolution - Any aggrieved investor has recourse to the courts of South Sudan which has jurisdiction over business disputes. Parties to a dispute are also free to specify alternative dispute resolution mechanisms they may agree upon. Any investor in dispute with the GoSS has recourse to internationally accepted dispute resolutions mechanisms. REFERENCES 1. Allan Odhiambo, 2011, Industries Opt for Kenya as New Hub for Regional Trade, Available at: http://www.businessdailyafrica.com/Corporate%20News/Industries%20opt%20for%20Kenya%20as%20new%20hub%20for%20regional%20trade/-/539550/1095218/-/ n64yo8/-/index.html 2. Government of Southern Sudan, 2011, Available at: http://www.goss.org/ 3. Helen Nyambura-Mwaura and Elias Biryabarema (East Africa Poised to Tap a Reborn South Sudan, 2011,Available at: http://www. reuters.com/article/2011/01/07/us-sudan-referendum-trade-idUSTRE7064WH20110107 4. International Crisis Group,2010,Sudan: Regional Perspectives on the Prospect of Southern Independence Africa Report No.159 PDF, Available at:http://www.crisisgroup.org/en/regions/africa/horn-of-africa/sudan/159-sudan-regional-perspectives-on-the-prospectof-southern-independence.aspx 5. Michael Omondi, 2010, Kenya Reaps Billions from Sudanese Separation Plan, Available at: http://www.businessdailyafrica.com/ Company%20Industry/Kenya%20reaps%20billions%20from%20Sudanese%20separation%20plan/-/539550/929646/-/item/1/-/ da21fw/-/index.html 6. Samwel Kumba and John Ngirachu, 2010, Sudan Votes, Kenya Hopes, Available at : http://www.nation.co.ke/News/africa/ Sudan+votes+Kenya+hopes+/-/1066/1085782/-/gq179qz/-/index.html 7. Southern Sudan Centre for Census, Statistics and Evaluation (SSCCSE),2010, Statistical Yearbook for Southern Sudan 2010,PDF,Available at: http://ssccse.org/storage/stats-year-books/Statistical%20Year%20Book%20For%20Southern%20Sudan%202010%20Final%20. pdf To advertise in the journal contact: Communication Officer 5th Floor, ACK Garden House, 1st Ngong Avenue • Postal Address: P.O. Box 53989 - 00200 Tel.: +254-20-2717402, +254-20-2721262 • Fax: +254-20-2716231 Email: [email protected] • website: www.ieakenya.or.ke By Andrew M. Mugambi Kenyan Food Security Policy: Lessons From China K enyan agriculture contributes 24 per cent of the gross domestic product (GDP) and contributes 60 per cent of export earnings. It directly employs 70 per cent of the population and further contributes 27 per cent of the GDP through forward and backward linkages with manufacturing, distribution and marketing related service according to the Strategy for Revitalizing Agriculture. The agricultural sector is, therefore, critically important to the Kenya’s national economy. Kenya has a long history of agricultural policy making, but the first food policy in independent Kenya was developed in 1981: Sessional Paper No.4 of 1981 on National Food Policy. This Paper was well articulated, but was never fully implemented. Indeed, a former Food and Agricultural Organisation (FAO) Country Director, Andrew Norton, commented when he was leaving Kenya that if the country fully implemented that Policy, Kenya would have experienced a green revolution in less than 10 years. Like many other policies in the agricultural sector, it suffered from a lack of funding. This policy was reviewed in 1994 (Sessional Paper No.2 of 1994) and had a very comprehensive chapter on food security. Kenya has experienced regular food shortages and even famines – despite having comprehensive food security policies – for various reasons- failure to implement planned activities, inadequate funding, poor leadership, corruption and vested interests. The policy is clear that Kenya requires 3 million bags of maize/ cereals in kind and a further 3 million bags worth of cereals in cash at the treasury annually. This requirement is rarely met. Kenya produces 30-34 million bags of maize and 6-9 million bags of beans annually in a normal year. A lot of this food goes to waste due to poor or no storage at the farms. Unplanned maize exports often threaten food security. Wheat is an important staple food especially for the urban population. Its production dropped from 177,100 metric tons in 1998 to 60,100 metric tons in 2002 against an estimated demand of 720,000 metric tons annually. Rice, another staple crop, has recorded disappointing performance remaining low at 52,000 metric tons annually. Kenya produces about 500,000 metric tons of raw sugar annually against Policy Journal - Issue No.2 Quarter 1 2012 | 23 Kenyan Food Security Policy Lessons from China a demand of 700,000 metric tons. The balance is imported from COMESA countries. The shortfall for most of the staple foods in meeting self-sufficiency is significant. The irish potato is the second most important staple food to maize in Kenya. One million tons are produced annually in this country. The potato subsector is faced by a number of challenges including inadequate research land/ facilities (most of the research land of 250 hectares in Tigoni was grabbed in the 1990s according to the Station Director, Mr. James Kabira), inadequate land for seed bulking and limited funding for research. A cold store in Molo stopped functioning several years ago. Production and Marketing Infrastructure Kenya’s agriculture is predominantly small scale farming mainly in the high rainfall areas. The small scale farming subsector accounts for 75 per cent of the total agricultural output and 70 per cent of marketed agricultural produce. Small scale farmers on average own 2-5 acres of land. They produce 70 per cent of maize, 65 per cent of coffee, 50 per cent of tea, 80 per cent of milk and 85 per cent of fish. Similarly, Chinese agricultural production is dominated by small scale farmers leasing, on average, one hectare per household from the state. For all practical purposes the Chinese smallholder is like a freeholder in Kenya; rural families are guaranteed land to cultivate. They produce the bulk of all major food commodities except wheat. Recent surveys (2005) by the Ministry of Agriculture indicate that only 60 per cent of the small holder farms in Kenya are under production while in China, up to 95 per cent is fully utilised. In Kenya’s arid and semi-arid lands, up to 84 per 24 | Policy Journal - Issue No.2 Quarter 1 2012 cent of the land mass remains largely underutilised. The potential, therefore, to produce more food both in high rainfall areas and ASALs is immense. Agricultural productivity is constrained by a number of factors including cost of inputs, limited extension services, overdependence on rain fed agriculture, poor livestock husbandry, lack of markets and limited adoption of technology and innovations. However, for some crops, productivity of the Kenyan farmers is close to international standards. Given here below are some comparisons on land productivity in Kenya and China. Crops Yields in Kg/Ha Kenya China Vegetables 11,392 25,500 Maize 1,657 5,200 Wheat 2,293 4,000 Rice 3,635 4,600 Sugar cane 71,460 - Source: Ministry of Agriculture (Kenya), FAO and Haifa Feng One of the major inputs contributing to high crop yields is the fertiliser. Fertiliser usage in Kenya is very low indeed averaging 50kg per hectare as compared to 400kg/ha in China. The Government will have to deliberately boost fertilizer utilisation in this country. Programmes like “Kilimo Biashara” which subsidise fertilizer prices for targeted poor smallholder farmers will have to be up scaled significantly. Other cost cutting measures like exploring the viability of establishing a fertilizer plant locally to supply the East Africa region are urgent. Seed Management Gene banks are almost non-existent in Kenya and where they exist; they are poorly managed especially in public institutions - suffering frequent power interruptions, irregular viability testing and poor record keeping. There are more than 30,000 varieties of vegetable plant species that have been collected and are maintained and stored in germplasm banks in China for use in plant breeding and production programmes throughout China. In addition, there are almost 1,000 new hybrid varieties that have been bred in the recent past. In one of those gene banks at the Beijing Vegetable Research Centre, various types of seeds have been stored in cold rooms for the last 35 years. Viability is tested every two years. There has never been power outage at the gene bank since it started operations, since emergency power supply is always guaranteed. That is the seriousness that the Chinese Government attaches to gene banks. Selling adulterated seeds or any substandard farm inputs attracts very heavy legal penalties in China; sometimes up to 15 years in jail and heavy fines. Research Kenya has a long history of agricultural research and a well developed agricultural research infrastructure that covers all ecological zones and caters for crops, livestock, fisheries and related fields. There are in total 28 agencies (public and private) that engage in agricultural research in Kenya. Their work is however not co-ordinated and duplication of research activities is common. Domestic funding for research programmes in Kenya is very low amounting to only 0.01per cent of the national budget. The ideal recommended level of funding is 2 per cent of the agricultural gross domestic product for Kenya to meet agricultural development targets and ensure national food security according to the Heads Kenyan Food Security Policy Lessons from China of State under the New Partnership for Africa (NEPAD). A large agricultural research capacity both in human and capital has been created mainly through development partners’ funding. This is not sustainable. Furthermore, the national priorities are unlikely to be addressed under such an arrangement. A lot of dry land farming technologies and crop varieties like cassavas, millets, sorghums, sweet potatoes and wheat developed by the Kenya Agricultural Research Institute (KARI) are still in the shelves mainly due to a dysfunctional research-extension linkages and low funding of extension services. Irrigation In Kenya, irrigation-based farming is very limited. It is mainly developed in form of irrigation schemes and large scale irrigation for some crops like rice and coffee. Large commercial farms account for 40 per cent of irrigated land while the small holder farmers and government managed schemes account for 42 per cent and 18 per cent of irrigated land, respectively. Kenya has a significant potential for irrigation that remains unexploited. Out of 540,000 hectares of irrigable land, less than 90,000 hectares or 16.6 per cent have been irrigated. In contrast, 55 per cent of arable land in China is irrigated. Although the Chinese Government has invested heavily in irrigation systems especially in the construction of huge canals near the main rivers like the yellow river, the more interesting aspect of irrigated agriculture in China is the community involvement in that activity; Chinese farm families live in villages or collectives and although most of china is flat, the villagers take advantage of any sloping ground around them to scope a dam at the bottom of those hills to collect water for irrigating their farms. Indeed, irrigation systems in China are one major contributor to national food security and learning example to the entire world. Kenya has developed a draft irrigation policy to address food security issues and develop the ASALs. It is hoped that this policy, if well- funded, will not only improve the food security issue but also significantly improve rural incomes Food Storage The National Cereals and Produce Board (NCPB), grain handlers and milling companies have developed an impressive grain storage infrastructure across this country. In 1980s and 1990s, the NCPB moved its store development programme out of the traditional cereals producing areas and built several stores in arid and semi-arid lands of the country with the support of the Italian Government. Those stores are, however, empty most of the year especially when grain is needed in the dry periods. The NCPB grain distribution arrangements are certainly inefficient and lacking in strategy. There is a rush by the government to distribute grain in ASALs when the local populations are already starving. Production Technologies - The Way Forward Kenya has no choice but to adopt the latest production technologies to address the problems of food shortages and food insecurity. Production, especially of vegetables, under greenhouses and plastic tunnels is one such technology to move farmers out of dependency on rain fed agriculture. This technology will also raise production per unit areas among other advantages especially for the heavily populated areas of Central Kenya, Western and Nyanza provinces. Gross margin analysis done by the Ministry of Agriculture on this technology indicates that this form of farming is very profitable. It is encouraging to not that this technology that was introduced to the smallholder farmers in Kenya in early 2000 by an Israeli company, Amiran Limited, in a Policy Journal - Issue No.2 Quarter 1 2012 | 25 Kenyan Food Security Policy Lessons from China joint programme with a local bank- Equity Bank is being adopted fast. Greenhouses and plastic tunnels technology was almost confined to the floriculture subsector earlier than 2000. A soilless culture production system is the another efficient technology for production of vegetables, in particular, where land is very limited like in urban and peri-urban settings. Urban agriculture has been adopted by the recently published National Land Policy and will go a long way in solving food insecurity especially among the urban poor. It will also boost urban food supply especially to the cities of Nairobi, Mombasa and Kisumu. Tissue culture technology has recently been adopted especially in banana production and has reduced the production period from 18 months to about 10 months. Banana production in Central Province - Meru and Embu has increased tremendously in the recent past because of this technology. Widespread adoption of tissue culture technology will certainly reduce food insecurity in this Country. Agriculural Extension Services The government agricultural extension services have been declining both in staff numbers and in funding for the last two decades. There are currently 8,000 technical officers with the Ministry of Agriculture and about half that figure for the Ministry of Livestock Development. This is a ratio of 1:1093 farm households (there are 4,939 field extension officers). This ratio cannot deliver an effective extension service. Financial resources allocation by the Government dropped from 5.9 per cent of the national budget in 1980s to 1.7 per cent in 2003/04 financial year. Financial allocations to the agricultural sector rose to 3.5 per cent of the national budget in 2010/11 financial 26 | Policy Journal - Issue No.2 Quarter 1 2012 year. This is, however, far below the ten per cent recommended by African heads of state in Maputo in 1997. This state of affairs is unsustainable. The government has proposed several models of extension delivery to address these constraints in the latest extension policy: National Agricultural Extension Policy (NAEP) of 2001. These include outsourcing extension services to universities and the private sector and farmers paying for certain services for commercial crops. Whatever the circumstance, the issue of inadequate staff and funding has to be addressed urgently to avoid stunting the growth of the economy and worsening food insecurity. The aspect of Chinese farm families living in villages and widespread practice of monoculture cropping in most of Asia has made extension delivery systems fairly cost-effective and efficient there. The policy has proposed similar models in certain parts of the country, but cannot be discussed in this paper. Food Marketing Processing and Distribution Kenya government liberalised agricultural marketing in 1992-94. Price setting for both inputs and outputs was abolished. The heavy presence of parastatals and state marketing boards in regulation, marketing and processing has distorted liberalisation. These state corporations such as the NCPB, and pyrethrum and cotton boards, administratively set prices and hence the resultant market distortions both in produce distribution and investments into the sector. Indeed, official price setting has led to the collapse of subsectors like pyrethrum, coffee and cotton. Although there were other factors contributing to the collapse of those subsectors, the parastatal controls and mismanagement were the main causes. Some of those parastatals are market leaders in their segments and once they set the prices all other marketers are likely to follow. Distribution of food in Kenya especially the essential commodities face two major challenges: poor road and other infrastructure networks and inadequate market information. Although some innovative individuals and NonGovernmental Organisation (NGOs) have set up market information management systems based on mobile telephony, market information management remains Cont. on Pg.30 By Owino Magana Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 I f Kenya Vision 2030 (KV 2030) is implemented as per plans laid out in its Medium Term Plan 2008-2012 (MTP) and the Youth Employment Marshall Plan (YEMP), the vision is unlikely to be realized. This would, very likely result in an increase in youth unemployment with dire implications for national security. Indeed, the possibility of state failure, courtesy of the high social costs associated with youth employment, is not far-fetched! This is not an indictment of KV 2030, but rather an indictment of the MTP. But perhaps, before developing this discussion further, it is fitting to delve into some background. Kenya has, in the 2011 Failed States Index (FSI), been ranked at position 16 out of 177 of the 193 United Nations member countries surveyed. This is a marginal improvement in Kenya’s position of 13 in the 2010 FSI. The FSI, now in its seventh edition, is an annual index prepared by Fund for Peace, and published by the respected Foreign Policy magazine, also of the USA. It is a ranking of the world’s most vulnerable countries, in the context of governance and security. Three dimensions impacting governance and national security – political, economic and social – are considered. Depending on how countries score on a scale of 1-10 (1 being the most stable and 10 being the least stable), based on 12 pre-determined performance indicators in each of the 3 foregoing categories, an overall cumulative score is computed. The worst case scenario is, therefore, an overall score of 120. Three African countries, Somalia, Chad and Sudan top this year’s FSI. Indeed, Somalia, with a score of 113.4, has held the No. 1 spot over the last four years and is by security experts, considered to be the most vulnerable state on earth, with a depth of crisis that is, perhaps, the international community’s longestrunning failure. Kenya, with a score of 98.7, moved out of the ignominious top 15 category of FSI, showing that the country continues Policy Journal - Issue No.2 Quarter 1 2012 | 27 Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 to recover from the bloody Post-Election Violence (PEV) in December 2007 and January 2008 following the disputed 2007 presidential elections, which resulted in over 1,300 deaths, displacement of over 600,000 people (NCIC, 2010) and destruction of property worth billions of Kenya Shillings. Kenya’s ‘improved’ ranking is, in large part, attributable to the citizens’ ratification in August 2010, of the Constitution of Kenya. It is remarkable that Kenya’s score is the worst in East Africa. Closest to Kenya is Burundi at position 17 with a score of 98.6, Uganda comes in at position 21 with a score of 96.3, Rwanda is at position 34 with an overall score of 91.0 while Tanzania, according to the ranking, is East Africa’s least vulnerable state at position 65 with a score of 81.3. Kenya’s Ministry of Special Programmes. However, the continued plight of the IDPs who are yet to be resettled, more than three full years after the PEV, continues to be an embarrassment to the Government, Kenyans of goodwill and other wellwishers. This has raised serious doubts, locally and within the international community, about the capacity or commitment of the Government of Kenya and its institutions to adequately deliver on their express mandate of protecting the lives and property of citizens. Following the PEV, relative normalcy returned to Kenya when on 28 February 2008, a national reconciliation accord was reached and signed by the two protagonists, Mwai Kibaki leader of the Party of National Unity (PNU) and Raila Odinga leader of the Orange Democratic Movement (ODM). Following the accord, a power-sharing agreement was arrived at, with Kibaki as President and Odinga as Prime Minister. Agenda item 4 on addressing the long term issues is, without doubt, the most expansive of the four. It has also been partially operationalized. For better perspective on what the ‘long term’ issues in Agenda Item 4 are, a summary of its 6 parts and a brief explanation on their current state of implementation follows: The accord, comprising four agenda items, has informed a programme of wideranging reforms in Kenya’s governance landscape. A brief paraphrase of the four agenda items follows: 1) An immediate stop to the violence 2) Address the humanitarian crisis 3) Agree on a political settlement 4) Address long term issues Apart from sporadic incidences of violence erupting in different parts of the country from time to time, Agenda Item 1 can be said to have been achieved. Agenda Item 2 has been partially achieved with most of the Internally Displaced Persons (IDPs) resettled – over 500,000 out of the original estimated 600,000 – according to 28 | Policy Journal - Issue No.2 Quarter 1 2012 A political settlement, consistent with Agenda Item 3, was agreed in 2008 and is the basis upon which the creation of the 42-member Grand Coalition Government (GCG) cabinet, vide the National Accord and Reconciliation Act 2008, rests. ‘Part A’ Constitutional, Institutional and Legal Reforms Constitutional, Institutional and Legal reforms highlighted include police, parliamentary, judiciary, executive and civil service reforms in order to affirm the final goal of the National Dialogue and Reconciliation which was to achieve sustainable peace, stability and justice in Kenya through the rule of law and respect for human rights. Status: The Constitution of Kenya 2010 (CK 2010) was ratified and promulgated as the supreme law in August 2010. Parliamentary reforms (including televised sessions) are underway. CK 2010 establishes a National Police Service and the National Police Service Bill has been passed by parliament. ‘Part B’ Land Reforms Having recognized that land-related conflict has been a source of economic, social, political and environmental problems in Kenya, the government commits to consult with Kenyans in order to formulate and implement short, medium and long term interventions with regard to the same. Status: CK 2010 establishes The National Land Commission as a constitutional office. The National Land Commission Bill is under preparation with oversight from the Commission on the Implementation of the Constitution (CIC), and should be completed within the next nine months, according to the deadline set by CK 2010. ‘Part C’ Poverty, Inequity and Regional Imbalances Recognizing that poverty eradication and equitable development are essential to ensure sustainable peace in the country, the coalition government undertakes to ensure that poverty alleviation and equitable development are top priorities on its agenda and commits to identifying short term, medium term and long term strategies for intervention, via a consultative process. Status: CK 2010 establishes a devolved system of governance which is expected to take effect from the time of the next general elections. A task force is currently working on applicable policy and legislation to govern the operationalization of the devolved system of governance. Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 ‘Part D’ Unemployment, Particularly Among the Youth Unemployment in Kenya, particularly among the youth, is considered serious and must be addressed urgently. Also acknowledged is the fact that lack of effective opportunities that integrate the majority of Kenya’s youth into mainstream economic activities contributed to the destructive role played by the youth during the post election violence. The Government commits to advocate for the development of a comprehensive strategy on combating youth unemployment and to explore all possible avenues of creating a supportive policy environment for the expansion of opportunities for youth employment in the formal and informal sectors. Status: KV 2030 (GoK, 2007) as well as YEMP (GoK, 2009) and MTP (GoK, 2008) and the Sector Plan for Labour, Youth and Human Resource Development (SPLYHRD) 2008-2012 (GoK, 2008) are in place. There is, however, a worrying lack of synchronism between the stated objectives of KV 2030 and the priority interventions in the MTP, the SPLYHRD that is one of the sector plans that informs it and the YEMP, all of which seem to propose that the youth be engaged in employment initiatives that involve menial unskilled labour such as slashing grass, planting trees and clearing of canals and trenches, without a substantive mention of the envisaged role of engaging or training the youth to be part of key stakeholders in the delivery of the flagship projects identified in KV 2030! This is the focus of this paper. Indeed, the inaugural Annual National Conference on the Implementation of the Constitution, held in June 2011, passed a resolution calling for a review of KV 2030 in order to align it with CK 2010 and, in particular, with article 10 on national values and principles of governance which binds all state organs, state officers and public officers, inter alia to demonstrate fidelity to values including patriotism, national unity, sharing and devolution of power, the rule of law, participation of the people, human dignity, equity, social justice, inclusiveness, equality, human rights, non-discrimination and protection of the marginalized! Other initiatives undertaken to alleviate the challenge of youth unemployment include the Youth Employment Development Fund (YEDF), the Kenya Youth Empowerment Programme (KYEP) and the Economic Stimulus Package (ESP). ‘Part E’ Consolidation of National Cohesion and Unity It is recognized that consolidating national cohesion and unity is a crosscutting task that will require the efforts of all Parties, Ministries, civil society and all Kenyans. Apart from proposing the creation of a National Ethnic Relations and Race Relations Commission and the introduction of legislation to fight discrimination and ensure equal opportunities for all, government agrees that all relevant ministries should work with the offices of the President, Prime Minister and other relevant bodies to oversee unity building efforts and help coordinate joint peace and reconciliation initiatives countrywide in liaison with local peace building efforts. Status: Reasonable ground has been covered in this regard. A National Cohesion and Integration Commission (NCIC) was established in 2009. A Cohesion Policy is currently under development. A National Values Task Force is operational and a National Civic Education Strategy has been developed, with significant input from Non State Actors. Other ‘Agenda 4’ commissions so far established include the interim Independent Electoral Commission (IIEC), the Interim Independent Boundaries Review Commission (IIBRC) and the Truth, Justice and Reconciliation Commission (TJRC). An Act of Parliament to enable the combining of the IIEC and IIBRC into and Independent Electoral and Boundaries Commission (IEBC), has recently been passed by Parliament. Cont. on Pg.32 Policy Journal - Issue No.2 Quarter 1 2012 | 29 Continued from Pg.26 Kenyan Food Security Policy Lessons from China largely a virgin area in Kenya. The public sector, in particular, has not invested significantly into this field. China has some of the most efficient and best managed commodity distribution and marketing systems in the world especially for fruits and vegetables. There are over one thousand large wholesale commodity markets throughout China. Food is transported to those wholesale markets across China in less than 48 hours-courtesy of the recently constructed super highways across China. Those markets trade between one to two million kilogrammes of fresh vegetables daily. All those wholesale markets have cold rooms thus reducing post-harvest losses significantly. Food manufacturing by large firms in Kenya (usually multi-nationals) is well established and efficient. Value addition of agricultural commodities at small towns and farms is, however, minimal or non-existent. This has resulted into high post-harvest losses especially for fruits and vegetables which can be as high as 40 per cent. Food Commodity Monitoring and Reporting How effective are the current systems? A comprehensive programme of data collection, analysis and dissemination of agricultural and food security information does not exist. Information collected by the Kenya National Bureau of Statistics is focused for planning purposes at the national level. Information on commodity prices collected daily by the Ministry of Agriculture and disseminated through electronic and print media is inadequate. 30 | Policy Journal - Issue No.2 Quarter 1 2012 Early warning systems to monitor famine, food production, droughts, floods and other disasters to mitigate against food insecurity does not exist in Kenya. The meteorological department basically monitors weather situations for a short span of about 3-4 months. The department lacks the personnel and equipment to comprehensively monitor the issues mentioned above. The Government of Kenya will have to invest resources in this area. Policy Recommendations Food and Entitlements Famine reflects widespread failure of entitlements on the part of substantial sections of the population. A person has to starve if this entitlement does not include a bundle of enough food. A person is reduced to starvation if some change, in his endowment – land, health, wage earnings are negatively affected to the point of not being able to acquire enough food. Food output and availability is a defective basis on which to predict famine. Employment, wages and prices all have direct bearing on food entitlement for various social economic groups. Even when famine is directly related to crop failure due to drought, there may be a modest rise in food prices, if the supply failure is matched by a corresponding decline in the purchasing power of affected population due to the same drought. Neither food output nor prices can give clues to famine anticipation-there is no substitute to economic analysis of the food entitlement of all the vulnerable groups. Prevention of famine depends on the speed with which early hunger is reported and taken up in political debates. Media is very instrumental in such early warning. Food and Cash Relief The traditional form of relief has been that of providing free food in relief camps and distribution centres. There is no doubt relief of this form has saved lives around the world. One of the forms of relief is to give the affected person ability to command food (cash relief) and the other is to give this ability in form of food itself. Cash relief may not be quick enough to get food to the starving in a situation of severe famine. It is also prone to corruption. However, it has merits: • Government’s inefficiency in transporting food to the affected people especially those in remote locations could be a considerable barrier to famine relief. • Food often moves out of the faminestricken areas due to the low purchasing power of the famine-stricken people as a result of low effective demand. • By providing demand for trade and transport, cash relief may help to re-generate the infrastructure in the famine-stricken economy. • Providing cash relief where the people involved normally reside and work without having to move them to relief camps may have very considerable economic and social advantages. Giving the famine victims more purchasing power would add to the total demand for food. Food production in most parts of rural Kenya is not merely a source of food supply, but also a main source of means of livelihood. It is for this reason that food output decline during droughts tends to go hand-in-hand with collapse of food entitlement. Kenyan Food Security Policy Lessons from China Food Security Strategy A national food security strategy must satisfy four basic objectives: • Efficient growth in the food and agricultural sectors. • Improved income distribution, primarily through efficient employment creation. • Satisfactory nutritional status for the entire population through provision of a minimum subsistence floor for basic needs. • Insurance against bad harvests, natural disasters or uncertain world food supplies. It is necessary to understand the major market demand parameters for basic food stuffs. For instance, when the average per capita Gross National Product rises, how much of maize, beans, rice, wheat and meats are demanded? The next step is to disaggregate consumption in order to trace the effects of various price and income policies on the food intake of the poor and vulnerable groups. Similar analysis can be done for the middle and upper income groups. Separate food balance sheets for three or four income classes can be prepared and compared with national aggregate food balance sheet. Household Expenditure Surveys done by the Kenya National Bureau of Statistics can provide the information needed. Food production policy has three major roles: • Ensuring the availability of efficient agricultural technology for various agro-ecological zones of the country. • Providing a set of macro-price policiesprice for capital, labour, foreign exchange and food. • Developing a rural marketing system for inputs and outputs with equal access for all classes of farmers. Each of these public policy roles with respect to efficient food production has an implicit or explicit income distribution consequence and hence food security. The need for responsiveness and flexibility in food production is transmitted from food consumers via the marketing system. If the signals do not get through efficiently, both sides of the food system are frustrated. High marketing margins do not necessarily denote inefficient markets if costs are commensurately high. High costs typically reflect inadequate physical and institutional infrastructure in the marketing system-poor roads, lack of central market places, shortage of farm inputs, go-downs and inadequate milling facilities. Summary and Conclusion Although food security policy exists in Kenya the implementation of that policy has been lacking, or inadequate. Funding of food security activities has also been far below the requirements. The food security programmes have failed to save Kenyans from frequent famine. The planning, implementation and management of food security programmes will have to be reviewed and seriousness attached to them. Financing and management of strategic food reserves will have to be re-looked. Food security is, indeed, a national security issue for Kenya. Corruption and mismanagement of food reserves and relief food should be severely punished and proper accountability systems put in place. Irrigation development in this country should be given priority in infrastructural development considering that 75 per cent of Kenya is arid and semi-arid. Kenya should target irrigating 30-40 per cent of arable land in the next 15-20 years. The Kenya government and the private sector will have to invest heavily in market and storage infrastructural development as a matter of priority. No country can develop fast by ignoring the agricultural sector. This country should move quickly to gradually raise financing to the agricultural sector from the current 3.5 to 10 per cent of the national budget in the next 3-5 years. Sino-Kenya relations have been growing in the recent past. The focus of those relations has been on trade, infrastructural development and exploitation of natural resources. Kenya can learn a lot from China which has a long experience of implementing one of the most successful agricultural and food security policies in the World and feeding 20 per cent of the World population. References Diankui Chen and Mingchi (2002), An Overview of Vegetable Production, Distribution and Consumption In China, Beijing, China. Feng Haifa (2002); Agricultural Development and Policy in China, Beijing, China. Peoples Republic of China (1996); Agricultural Policy and Food Security in China, Beijing China. Republic of Kenya (1994); Sessional Paper No.2 on National Food Policy, Government Printer, Nairobi, Kenya. Republic of Kenya (2004); Strategy for Revitalizing Agriculture 2004-2014, Nairobi Kenya. Republic of Kenya (2007), A Globally Competitive and Prosperous Kenya, Kenya Vision 2030; Government Printer, Nairobi, Kenya. Sen Amartya, 1990, Food Economic and Entitlement, John Hopkins University Press, Baltimore, USA. Timmer C. P., 1990, Developing a Food Strategy, The John Hopkins University Press, London. Policy Journal - Issue No.2 Quarter 1 2012 | 31 Continued from Pg.29 Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 ‘Part F’ Transparency, Accountability and Impunity This is the final part of Agenda Item 4. It states boldly that transparency, accountability and the fight against impunity must underpin the entire national reform agenda. It concludes by laying emphasis on the importance of implementing the recommendations of the Truth, Justice and Reconciliation Commission and proposing an implementation roadmap towards addressing the foregoing issues, which were considered the underlying causes of the post-election national crisis. Status: The TJRC, after a false start, is now operational. The Kenya Anti Corruption Commission (KACC now EACC) has a new leadership which has brought renewed vigour to the fight against corruption. Vetting mechanisms such as the Judicial Service Commission (JSC) have been established, ushering in a new era of transparency and accountability in the recruitment of judicial officers. A new Chief Justice (CJ), Deputy CJ and Director of Public Prosecutions (DPP) have recently assumed office after vetting by the JSC and the Public Service Commission, in addition to receiving Parliamentary approval. The search for a new Attorney General was concluded applicants who applied to be considered for appointment to the position of judges are currently being interviewed by the JSC. Expansion of judges now going on. 2011, undertook a study, to establish the prevailing employment realities experienced by youth in Nairobi’s Westlands Constituency and what policy implications these may portend for the attainment of KV 2030. Our discourse focuses on ‘Part D’ of Agenda Item 4 – Unemployment, Particularly Among the Youth – and the policy implications, thereof, in the context of Kenya’s blueprint for national development, KV 2030, whose goal is to transform Kenya into a middle income economy with a high quality of life by the year 2030. KNBS estimates the overall, youth unemployment in Kenya, at 67% of the eligible population. My study reviewed the effect that the Youth Enterprise Development Fund (YEDF), launched in 2007, has had on youth employment creation, to date. A total of K. Shs. 2.9 billion has so far been disbursed through YEDF to several youth groups and individuals. At the time of the study, an audit of the total number of jobs created was underway at YEDF. Concurrently, a National Manpower Survey (NMS) was underway, with the Ministry of Labour and the Ministry of National Planning, Development and Vision 2030 (MOPND&V2030) having commissioned the Kenya National Bureau of Statistics (KNBS) to establish the current status of training and skills held by Kenyans. According to the Kenya National Bureau of Statistics (KNBS, 2009), a run-away youth population, estimated at 75% of Kenya’s 38.6 million strong population, a situation that suggests the phenomenon of a youth bulge, is the largest and perhaps most inadequately addressed challenge to the attainment of Kenya’s national agenda – KV 2030 - today. Yet a large youthful population can turn out to be a great opportunity- a so-called youth dividend - or a great danger, depending on the choices Kenya makes (Njonjo, 2010). Intrigued by the above KNBS research, this author, during the period April-June On the negative side, the study (Magana, 2011) established that there appeared to be no clear linkages between key policy interventions for youth employment such as the Youth Employment Marshall Plan (YEMP), launched by the Ministry of Youth Affairs and Sports (MOYAS) in 2009 and the KV 2030 target of 500,000 jobs per year, a figure that is carried over from the employment target articulated in Kenya’s Economic Recovery Strategy for Wealth and Employment Creation 20032007(ERSWEC), the strategic national economic development policy and strategy which preceded KV 2030 . Specifically, the YEMP does not have any plans that are geared toward ensuring that the youth are deliberately and substantively included in the implementation of the flagship projects identified in KV 2030. The same is true 32 | Policy Journal - Issue No.2 Quarter 1 2012 Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 of the Sector Plan for Labour, Youth Employment and Human Resource Development 2008-2012 (SPLYEHRD), which informs the Medium Term Plan (2008-2012) of Kenya Vision 2030. This is of grave concern, given that the YEMP and SPLYEHRD are a direct response to operationalize Agenda Item 4 Part D which acknowledges that ‘the fact that lack of effective opportunities that integrate the majority of Kenya’s youth into mainstream economic activities contributed to the destructive role played by the youth during the post election violence.’ The overarching recommendation of the study is that Government should, as a matter of urgency, put in place all necessary mechanisms to enable a comprehensive review of KV 2030 to ensure that it aligns to the Constitution of Kenya 2010 (CK 2010) in its entirety and, in particular, with strict adherence to the national values and principles of governance articulated in Article 10. A summary of the key findings of the study follows: 1. More awareness is needed on KV 2030. This is more so given the recent promulgation of the CK 2010, which may necessitate a review of KV 2030 to align with CK 2010 with youth employment and empowerment as its core. 2. GoK strategies and plans reviewed during the course of this study (e.g. YEMP, SPLYHRD and MTP) do not demonstrate alignment with KV 2030. A glaring oversight is the absence of clarity on the role the youth will play to help deliver KV2030’s flagship projects. Projects designed with the youth appear to be low skill, labour intensive undertakings that do not meet the ILO’s threshold for decent work. This also applies to the YEMP developed by MOYAS. 3. The youth lack training and skills yet this is a key pre-consideration by YEDF and other funding mechanisms when considering who should qualify for an advance. 4. There is need to create greater awareness among the youth on funds available for youth empowerment and employment. It is also necessary to consolidate them under one youth friendly policy and regulatory framework. 5. A one-stop online Information portal on youth employment opportunities and how to access funds under a consolidated framework (funds are currently scattered under CDF, WEF, YEDF etc.) may help youth make better decisions with regard to engagement in national affairs and sustainable self empowerment. 6. The funds allocated for youth empowerment were considered low by policy implementers, beneficiaries and researchers. A rational review of amounts the funds disburse, ought to be undertaken. 7. The monitoring of the impact of YEDF in Westlands Constituency remains inconclusive, as it is tracked manually, so it is not yet possible to give an authoritative assessment of the same. At the time of the study, YEDF had commissioned a national review of YEDF impact. YEDF would do well to implement an integrated ICT system to track fund disbursement, to enable its effective administration and impact assessment. Recommendations On the basis of the foregoing findings, the following are the recommended courses of action for GoK and youth stakeholders to consider: 1. A National Civic Education and Engagement Policy and Regulatory framework should be put in place to inform and empower citizens of Kenya, and particularly the youth, on their rights and responsibilities as citizens as articulated in the Bill of Rights in CK 2010 and international treaties to which Kenya has acceded such as the African Youth Charter (AYC). This will enable them to appreciate and play their roles and responsibilities towards actualizing the ‘New Kenya’ envisaged in KV 2030, which will need to be aligned with CK 2010. 2. GoK should urgently appoint an inclusive, professional and knowledgeable multi-stakeholder team to review KV 2030, to align with CK 2010 in order to urgently address Kenya’s youth employment challenge through plans that are designed to maximize youth participation in the economic mainstream, with specific regard to KV 2030 flagship projects, in the spirit of the AYC. 3. GoK to facilitate, via a stakeholder driven process, the development of a National Employment and Human Capital Development Policy (NEHCDP) and Regulatory Framework, which is informed by a National Manpower Survey (NMS) aligned to KV 2030 and global best practice such as ILO’s Decent Work Framework (DWF). It is of grave concern that the employment strategies in the MOYAS’ 2009 Youth Employment Marshall Plan (YEMP) and various MTP (2008-2012) sector plans are not aligned to KV 2030 and do not make any provision for the youth to play a key role in the implementation of the flagship projects identified in KV 2030. It is, also necessary to review the YEMP within the context of the (NEHCDP); 4. Development of a coherent and coordinated policy and regulatory framework for Resource Mobilization Policy Journal - Issue No.2 Quarter 1 2012 | 33 Youth Unemployment, State Failure and Policy Implications For Kenya Vision 2030 and consolidation of all funds targeting youth employment and empowerment with clear accountability mechanisms. It is of concern that resources intended for youth empowerment are scattered across several ministries, with some components in funds devolved to Kenya’s constituencies such as the CDF managed by members of parliament, while others such as the Economic Stimulus Package (ESP) are managed by the Office of the Prime Minister (OPM) and the YEDF is itself now established as a parastatal under MOYAS. Conclusion So what is the link between youth unemployment, state failure and Kenya Vision 2030? A 2009 study by Population Action International (PAI) identified 27 youth bulge countries that ran the risk of state failure. Of these, 13 were in the Middle East while 14 were in North and SubSaharan Africa. In January 2011, the tragic suicide of Mohamed Bouaziz, a young Tunisian sparked riots and civil disobedience in Tunis that led to the collapse of the Tunisian government of President Zine Abidine Ben-Ali. The following month, youth in neighbouring Egypt picked the cue and used similar street protests to send the 31 year old government of Egyptian President Hosni Mubarak ‘The Tunisian Way’. Mubarak is currently undergoing trial in Egypt. At the time of writing, Syria, Lebanon, Saudi Arabia and Lybia – all identified by the PAI study as youth bulge countries – were grappling with possibility of civil strife with unemployment and governance reforms high on the agenda! Kenya has what it takes to achieve prosperity, middle income status and respectability among the global community of nations, as envisaged by KV 2030! This, however, depends on our making the right choices such as reviewing KV 2030 in alignment with CK 2010 and making youth employment the core component of KV 2030. Other choices open to us are to maintain the status quo. So will we choose to reap the youth dividend or continue courting state failure? REFERENCES Fund for Peace & Foreign Policy Magazine, (2010), Failed States Index 2010. Washington D.C: Foreign Policy Magazine Goldstone J. A. et al. (2000). State Failure Task Force Report: Phase III Findings. McLean, Va: Science Applications International Corporation. Government of Kenya. (2006). National Youth Policy. Nairobi: Government Printer. Government of Kenya. (2007). Kenya Vision 2030. Nairobi: Government Printer. Government of Kenya. (2010). Constitution of Kenya, 2010. Nairobi: Government Printer. Government of Kenya. (2010). National Youth Council Act, 2010. Nairobi: Government Printer. International Labour Organization. (2009). Global Employment Trends. Geneva: International Labour Office. Kantai, W. (2007). A Critique of Vision 2030! Nairobi: Institute of Economic Affairs. Kenya Institute of Public Policy, Research and Analysis. (2009). State of Youth Employment. Nairobi: Government Printer. Kenya National Bureau of Statistics. (2009). Kenya Facts and Figures 2009. Nairobi: Government Printer. Kenya National Bureau of Statistics. (2010). Kenya National Census 2009. Nairobi: Government Printer Magana, O. (2011). Youth Employment Realities in Nairobi’s Westlands Constituency and Policy Implications for Kenya Vision 2030. Nairobi. Magana, O. Maslow, A. H. (1954). Motivation and Psychology. New York: Harper and Row Ministry of State for Planning, National Development and Vision 2030. (2009). First Medium Term Plan (2008 – 2012) of Kenya Vision 2030. Nairobi: Government Printer. Ministry of Youth Affairs and Sports. (2009). Youth Employment Marshall Plan. Nairobi: Ministry of Youth Affairs and Sports. Njonjo, K.S. (2010). Youth Fact Book: Infinite Possibility or Definite Disaster? Nairobi; Institute of Economic Affairs. Omolo, J. (2009). The Dynamics and Trends of Employment in Kenya. Nairobi: www.iea-kenya. or.ke Youth Agenda. (2009). Kenya Vision 2030: A Critical Review by Kenya’s Youth. Nairobi: Youth Agenda Youth Enterprise Development Fund Board. (2010). 3 Years of the Youth Fund. Nairobi: Youth Enterprise Development Fund. 34 | Policy Journal - Issue No.2 Quarter 1 2012 From the IEA Health Sector Spending in Kenya: Who Gains? Background The Government of Kenya (GoK), in its economic blueprint, Kenya Vision 2030, envisions the transformation of Kenya into a globally competitive and prosperous middle-income country with a high quality of life by the year 2030. The vision is based on three pillars: the economic, social and political. The economic pillar aims to improve the prosperity of Kenyans through an economic development programme. The social pillar seeks to build a just and cohesive society with social equity in a clean and secure environment. The political pillar aims to realize a democratic political system that respects the rule of law and protects the rights and freedoms of Kenyans. The main focus of this analysis is on the social pillar, which primarily focuses on investing in people. Key areas in the social pillar are the education and health sectors. In the health sector, the government seeks to provide equitable and affordable health care services at the highest possible standards for her citizens and at the same time ensure that water and improved sanitation – key provisions that directly affect health care – are available to all Kenyans by the year 2030. The annual budget allocated to the health sector by the Ministry of Finance has been on the rise every year and was estimated to have been 45.1 billion in the financial year 2009/2010, representing 6.5 percent of the total Government budget. This has gone a long way in developing the health sector in terms of building infrastructure (such as putting up new hospitals and the importation and maintenance of critical medical equipment) and training of staff (existing and new doctors, nurses, midwives and pharmacists, among other medical practitioners). The GoK aims to increase accessibility to quality medical care to all its citizens, and to this end, has put in place programmes and plans to achieve this goal. This objective is in tandem with the Millennium Development Goals (MDGs) and the Abuja Declaration objective of raising the health budgets of signatory countries to at least 15 percent of the total annual government budget. Pro-poor spending is a common goal for most national governments, development agencies, and partners all over the world. This goal is hinged on respective Bills of Human Rights, where citizens have a right to access quality basic human needs, including access to health care. Equitable public spending on health, education, and water and sanitation are essential for any government that wants to effectively tackle and eradicate poverty. Therefore, while pro-poor spending is important because it increases labour productivity, which in turn provides the spur to economic growth, it also serves as a mechanism through which broader poverty reduction and wealth creation goals can be achieved. Ultimately, the basis of pro-poor spending on public health depends on who gains from it – is it the poor or the rich? Kenya boasts of numerous health facilities, ranging from national hospitals (referral hospitals), provincial hospitals, district hospitals, dispensaries and health centres, as well as privately-owned hospitals. The number of public health care centres in Kenya is shown in Figure 1 below. Policy Journal - Issue No.2 Quarter 1 2012 | 35 Health Sector Spending in Kenya Who Gains? Each health facility plays specific roles. Dispensaries, which are part of the primary health facilities, are the first points of contact between government and the public. Dispensaries provide outpatient services for simple ailments such as colds and flu, uncomplicated malaria and other minor diseases. Those who cannot be treated here, for different reasons, are referred to health centres. Health centres should serve a population of approximately 80,000 people and have facilities for outpatient consultations, inpatient wards, and laboratories for diagnostic tests. They also have theatres for minor surgical procedures, maternity wards and maternal and child health care centres. In cases where patients need further medical care, clinical officers will refer them to district hospitals. District hospitals serve as the co-ordinating and referral centres for smaller health facilities; they have the resources to provide more comprehensive medical and surgical services. At the district hospital level, there are sub-district hospitals that are similar to health centres, but with surgery units for performing caesarian births and other simple surgical procedures. Provincial hospitals are much larger and provide specialized care, including intensive care and life support services and specialist consultations. Cases that require further specialized attention are referred to national hospitals. Health Care Financing in Kenya There are four traditional sources of health care financing in Kenya: taxation, social insurance, private insurance and direct or out-of-pocket (household) payments. Other sources include donor grants and loans. In 2007, the Ministry of Health (MoH) provided a summary of the sources of health financing in Kenya. According to the summary, households remained the main source of funds for health care, accounting for 51 percent of the funds. Government and parastatals account for 30 percent of the funds, donors account for 16 percent while Non-Governmental Organizations (NGOs) and private companies contributed approximately 3 percent of health care finance. Table 1 shows the MoH recurrent and development expenditure trends for the periods 2004/05 to 2009/10. It is clear from the statistics that public spending on health has continued to increase in absolute terms from approximately KShs.19,158.20 million in 2004/05 to KShs.29,196.70 million in 2007/08, with an estimated increase to KShs.47,011.30 in 2009/10. The MoH actual expenditure of the total Government expenditure increased from 5.04 percent in 2004/05 to 5.42 percent in 2006/07 with a slight drop to 4.39 percent in 2007/08. Although the entire health sector allocation for this period averaged about 7 percent of the total budget, it is still short of the recommended 15 percent as outlined in the Abuja Declaration. It Figure 1: Public Health Care Centres in Kenya Referral Hospitals • 2 referral and 1 specialist hospital Provincial Hospitals • 8 provincial hospitals District Hospitals • 118 district Hospitals Primary facilities (health centres and dispensaries) Source: Nyanjom (2006) 36 | Policy Journal - Issue No.2 Quarter 1 2012 • 440 health centres • 1,527 dispensaries Health Sector Spending in Kenya Who Gains? Table 1: Recurrent and development spending by sector, Amount -Health (KShs. Millions) Actual Approved Estimates Items 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 MoH Total Expenditure 19,158.20 23,007.00 27,530.10 29,196.70 35,418.30 47,011.30 Recurrent 17,417.30 19,765.20 21,542.50 23,766.50 28,471.20 28,184.10 Wages 9,010.29 10,471.33 11,344.67 12,451.25 14,670.26 15,424.39 Non Wages 8,407.01 9,293.87 10,197.83 11,315.25 13,800.94 12,759.71 Development 1,740.90 3,241.80 5,987.60 5,430.20 6,947.10 18,827.20 Domestic 1,488.10 2,736.80 3,359.50 2,401.50 5,250.60 11,799.20 Donor 252.80 505.00 2,628.10 3,028.70 1,696.50 7,028.00 Total Expenditure 379,830.20 432,049.10 507,667.40 665,376.40 761,540.30 865,619.90 GDP at Market Price 1,345,026 1,519,079 1,724,197 1,962,879 2,241,393 Population (million) 34.20 35.10 36.10 37.20 38.30 GDP Deflator** 1.15 1.20 1.30 1.36 1.54 5.04 5.33 5.42 4.39 4.65 1.42 1.51 1.60 1.49 1.58 MoH Total Expenditure 560.18 655.47 762.61 784.86 924.76 Recurrent 509.28 563.11 596.75 638.88 743.37 Development 50.90 92.36 165.86 145.97 181.39 Recurrent 90.91 85.91 78.25 81.40 80.39 59.95 Development 9.09 14.09 21.75 18.60 19.61 40.05 Wages 51.73 52.98 52.66 52.39 51.53 54.73 Non Wages 48.27 47.02 47.34 47.61 48.47 45.27 MOH Total Expenditure 14.99 10.71 1.14 7.13 Recurrent 8.66 0.84 5.21 5.79 Development 78.30 70.89 -13.51 12.98 As a % of Total GoK expenditure outlay MoH Total Expenditure 5.43 As a % of GDP MoH Total Expenditure Per Capita Expenditure As a % of MoH Expenditure As a % of MoH Recurrent Expenditure Real Growth Rates (%) Source: Republic of Kenya. Appropriation Accounts (various. Financial year 2005-2006) is important to note that although the actual MoH expenditure was increasing nominally over the years, comparison of actual versus budgeted figures can yield misleading results because it has always been a challenge for the MoH to fully spend budgeted development expenditure. Who Gains from Health Care Financing? The Benefit Incidence Analysis The need to ensure access to quality health care for citizens, regardless of their social status, has led governments the world over, including the GoK, to offer subsidies in the health sector. The Benefit Incidence Analysis (BIA) is a method used to establish who actually gains from public spending on basic services such as education, health or any service provided by the government. The BIA describes the distribution of health sector subsidies Policy Journal - Issue No.2 Quarter 1 2012 | 37 Health Sector Spending in Kenya Who Gains? among individuals by bringing together public expenditure accounts and survey data on the use of publicly subsidized services. This analysis is then used to assess whether health subsidies are consistent with narrowing the absolute or relative gap in living standards between the rich and the poor. However, limitations to this tool include the lack of accurate data on government expenditure on the public sector and the difficulty in accurately defining the unit cost of services. The BIA, as used in determining benefits of the health sector that accrue to Kenyans, utilized the Kenya Integrated Household Budget Survey (KIHBS) data of 2005/06. Part of this data covered referral hospitals, provincial and district hospitals, dispensaries, and public health care centres. The data also covered a wide spectrum of socio-economic indicators such as access to housing, education and health facilities, level of agricultural activities, enterprises, incomes, expenditure and consumption, household and community social amenities. A primary sampling unit of 1,343 clusters was randomly selected and from this, 10 households were randomly selected. This was used to derive the sampling weights, which implies that the KIHBS data has information on over 60,000 individuals and as such, forms a good basis for this analysis. The total expenditure on the health sector was derived from the appropriation accounts of ministries concerned with health sector (Ministry of Public Health and Ministry of Medical Services) for the fiscal year 2005/2006; data which informs this analysis. The unit subsidy was arrived at by dividing the number of beneficiaries of a service by the total expenditure incurred to offer that service. 38 | Policy Journal - Issue No.2 Quarter 1 2012 Results and Discussion Types of Health Facility Visited Population and Illness In Kenya, approximately 27 percent of the population report cases of illness, as shown in Table 2. The response to illness by the population was diverse and dependent on the quintiles in which they fall. However, the manner in which the population reacts to illness varied through the quintiles. For example, approximately 59 percent of the 26 percent of the population in the poorest quintile that fell ill consulted a health care provider. This percentage seeking treatment increases in the 2nd quintile (approximately 68 percent) while it is approximately 77 percent in the richest quintile. It is clear that a majority of Kenyans seek health care services in public health care institutions, although the ratio of those seeking such services varies with the type of facility in place and the quintiles in which an individual falls. Those in the poorer quintiles prefer visiting primary health facilities. On the other hand, as evident from Table 3 below, majority of the population in the 3rd, 4th and 5th quintiles opted for primary health care facilities (dispensaries and health centres). The type of health care facility visited is also dependent upon the type of illness that one is suffering from and the availability of facilities as well as the location of the facility. Table 2: Illness and Response of Population by Quintile Quintile n=17,043 Population sick (%) Population share seeking health care (%) Population seeking public health care (%) Population seeking private health care (%) 1st quintile (poorest) 26.1 59.4 58.0 42.0 2nd quintile 25.4 68.2 56.6 43.4 3rd quintile 27.0 70.5 55.2 44.8 4th quintile 28.8 73.9 49.8 50.2 5th quintile (richest) 26.9 77.1 43.5 56.5 All 26.8 70.0 52.1 47.9 Source: Authors’ calculation from 2005/06 KIHBS dataset Table 3: Health Care Facility Visited Quintile n=6338 Population seeking public health care (%) Of those seeking public health care Referral hospital District /provin(%) cial hospital (%) Primary health care (%) 1st quintile (poorest) 58.0 1.9 19.3 78.8 2nd quintile 56.6 2.5 24.6 72.9 3rd quintile 55.2 2.4 31.1 66.5 4th quintile 49.8 3.6 39.7 56.6 5th quintile (richest) 43.5 8.8 46.4 45.8 All 52.1 3.8 32.3 68.8 Source: Authors’ calculation from 2005/06 KIHBS dataset Health Sector Spending in Kenya Who Gains? Spending Per Capita on Health Care Figure 2: Benefit Incidence Analysis 100.00 A closer examination of how much individuals spend on public health care per month showed that on average, the poorest quintile spent a mean of KShs. 66.40 on health care, translating to 1.81 percent of their total mean monthly expenditure. The richest quintile has a mean monthly health expenditure of KShs.786.60, representing approximately 4.73 percent of their mean monthly expenditure. This is captured in Table 4 below. 80.00 60.00 40.00 20.00 0.00 0 Poorest quintile Equality line District/Provincial hospital Public Facility The Benefit Incidence for Public Health Spending Obtaining the unit subsidies require one to determine the actual expenditures on facilities. Due to aggregation limitations in the appropriation accounts, the actual expenditure on facilities was obtained from the works of Demery and Gaddis (2009). 2nd 4th Richest quintile Referral hospital Primary health care Incomes Source: Authors’ calculation from 2005/06 KIHBS dataset Table 5 below summarizes Government unit health subsidies by type of facility visited. It is evident that referral hospitals received the highest proportion of Government subsidies in Kenya, at 12.74 percent of the actual budget, compared Table 4: Per Capita Spending on Health Care Quintile Population seeking public health care (%) Mean individual spending on health care (monthly) % Health spending / total spending (monthly) Mean monthly expenditure 1st quintile (poorest) 58.0 66.40 1.81 6263.80 2nd quintile 56.6 127.20 2.04 11,623.50 3rd quintile 55.2 200.20 1.80 17,321.00 4th quintile 49.8 342.20 3.22 27,534.55 5th quintile (richest) 43.5 786.60 4.73 57,924.50 Source: Authors’ calculation from 2005/06 KIHBS dataset Table 5: Government Subsidy and Type of Facility Visited Quintile 2005/06 actual budget (‘000) Facility visit from KIBHS Subsidy /visit Proportion Referral hospital 3,862,888 2,317,510 1,666.80 12.74 Provincial/district 12,019,283 12,321,344 975.50 7.46 Primary health care 3,882,829 29,690,096 130.80 1.00 All facilities 19,765,000 44,328,950 Source: Authors’ calculation from 2005/06 KIHBS dataset 3rd to primary health care facilities which received a paltry 1 percent. This trend could be attributed to the fact that referral hospitals are much larger, have the highest number of professional personnel, and have more state-of-the-art equipment that are expensive to purchase and require more maintenance. However, primary health facilities are more in number as compared to the two referral hospitals in the country. By combining the unit subsidies for each facility and the reported utilization of the facilities from the KIHBS data, a Lorenztype curve which shows the level of inequality in accessing health care in different facilities was derived as shown in Figure 2. All the population quintiles should be accessing health facilities on the equality line if there is equality. A curve above this line indicates that a certain population cohort is accessing more and vice-versa for a line below the equality line. The 1st and 2nd population quintiles have less access to referral hospitals and to district and provincial hospitals as compared to the 3rd and the 4th quintiles. Furthermore, Policy Journal - Issue No.2 Quarter 1 2012 | 39 Health Sector Spending in Kenya Who Gains? while all cohorts of the population have a relatively similar incidence of falling ill, as shown in Table 2, the choice of whether to go to a public or private hospital also affects the utilization of facilities by the different cohorts. From Figure 2, it is clear that the spending on primary health care facilities is pro-poor while the other facilities – referral, district and provincial health care centres – are pro-rich. In general, the spending on public health facilities as shown by the line ‘public facility’ is not pro-poor. Moving a step further, and mapping the cumulative incomes by quintiles using the ‘income’ line, income still remains highly unequal among the different quintiles, and its distribution is worse than distribution of public health spending associated with facility utilization. Conclusion From the results, the following can be noted: 1. The poor (approximately 22 percent) do not use referral hospitals as much as the rich (approximately 43 percent). This can be attributed to the public perception that referral hospitals, particularly the Kenyatta National Hospital in Nairobi, are not public facilities since they charge a high cost for treatment. 2. The poor rely more on primary health care, i.e., the 1st and 2nd quintiles utilize approximately 44 percent of the primary health care subsidy. 3. All the five cohorts of the population use provincial and district hospitals, 40 | Policy Journal - Issue No.2 Quarter 1 2012 and primary facilities, more than referral hospitals. 4. In comparing the subsidies as a proportion of income for the five quintiles, it emerges that the poor tend to gain more than the rich. In conclusion, it can be noted that while all population quintiles in this analysis show similar rates of falling ill, there are less people in the poor category seeking health care as compared to the rich. In addition, the poor do not use referral hospitals much, as a majority use primary health care facilities which consist of public dispensaries and health centres. Given that the subsidies per visit in primary health care centres is much lower than referral and provincial district facilities, the poor benefit less than the rich in public health spending by the Government. It is evident from this analysis that the higher the income and expenditure quintile, the greater the benefit incidence. This therefore implies that public health spending is not benefitting the poor, and the Government should therefore seek ways to reach the low income earners in terms of giving them access to basic quality health care as a basic requirement. Policy Recommendations Devise Health Programmes that will give all Citizens Equal Access to Basic Health Care One of the goals of a government’s health care initiative is to address health care disparities among the population as regards unequal access to screening, diagnosis and medical treatment, resulting in poorer health care outcomes in medically underprivileged populations. The lack of health care access among the population has been identified as a major obstacle to addressing health care inequalities in the population. It is imperative for the GoK to initiate awareness campaigns that will demystify the notion that referral hospitals are expensive, while setting up mobile clinics to reach the rural poor. Embark on Accurate Data Collection, Analysis, and Dissemination There is an overwhelming need for the GoK to improve data collection, analysis and dissemination activities as relates to health indicators, health status and general health of the populace. The lack of data at the national level implies that sometimes, the true picture on the ground is not captured. Without specific and accurate data, the affected may not be included in health programmes and services by the Government. Data forms the basis for planning that drives almost all government services and programmes. Towards improving data collection and analysis, the Kenya National Bureau of Statistics (KNBS) should step in and ensure accurate and all inclusive data is collected for the intended purposes. Institute of Economic Affairs - Programmes Policy Areas Call for Articles for The Third Issue of the “Policy” The Public Policy Journal of the Institute of Economic Affairs” 1. Regulation And Competition Policy Programme The Regulation and Competition Policy Programme aims to facilitate the formulation and implementation of appropriate economic regulations and competition policy in Kenya. The regulatory policy review has concentrated on the laws and institutions that regulate certain economic sectors. In the initial design of the programme it was intended that it would focus on the areas in which the connection between the law and the economy would be most evident. 2. Budget Information Programme The Budget Information Programme (BIP) promotes transparent and participatory engagement of key institutions in public finance management with emphasis on execution and auditing. The Programme has four components: parliamentary support, citizen/civil society support, gender budgeting initiative and local authorities support. The Programme activities are geared towards enhancing the capacity and effective management of key institutions in public management, both in the upstream (the legislature and the executive) and in the downstream (the civil society and the public in general). 3. Trade Information Programme The Programme aims to be an influential actor in Kenya’s trade negotiations, policy formulation, reforms and impact assessment. The Programme has three pillars: trade negotiations; trade, development and poverty reduction; and advocacy and networking. The institute seeks to ensure that it does not merely react to trade issues as they emerge but anticipated the future in informing trade policy. 4. Futures Programme The programme seeks to facilitate increased utilization of future methodologies in development planning, research, policy formulation and analysis. The programme has three components: scenarios thinking, vision building and strategic building. Under the scenarios component, the programme seeks to provide alternative pathways into the future that explore interaction between social, political, technological, environmental and economic forces operating within a given context. The visioning component seeks to give theoretical and practical perspectives on importance of building a shared vision that can unify people and enhance development by embedding it into a comprehensive planning process. The Programme has also facilitated the planning in a number of constituencies. Strategic plans help a community take stock of where they are coming from and where they are to determine strategic needs that can be carefully prioritised to enhance community development. The Institute of Economic Affairs (IEA-Kenya), a public policy think-tank based in Kenya will soon be publishing the third issue of the exciting and informative Public Policy Journal – “Policy” . The publication is a journal through which IEA members and associates, Kenyan professionals, academia and researchers can articulate their well-researched view points on diverse public policy issues. The journal aims to provide an avenue for IEA members and associates, professionals, researchers and general public to influence public policy through research, provide cutting edge information on public policy and provide policy makers with useful information to guide policy reforms. The articles submitted should aim at reporting on progress made in implementing specific policy reforms or communicating research findings on a particular public policy issue in a reader-friendly manner. Alternatively, articles could also provide a critique of the design or implementation of public policy reforms and advocate for specific public policy changes, in all cases backing their arguments will well researched facts where appropriate. The IEA will put together a panel of editors to review submitted manuscripts in order to ensure accuracy of information and eliminate errors. The editors will therefore reserve the right to change manuscripts , in collaboration with the authors, to ensure that they are accurate and comply with international standards. Submissions Writers are urged to observe the following requirements: • Articles must be written in clear UK English. • Articles submitted for publication in the journal must be original and must not have been published or submitted for publication elsewhere. • Articles must average between 1,500 and 2,000 words for short articles and between 4,000 and 6,000 words for long articles • Contributors must submit an electronic file of the manuscript. • Authors should provide an abstract of their article, not exceeding 300 words in length. Please note that the deadline for submission is Monday, 2nd April 2012. Please send your manuscripts to the editor on email address - [email protected]. For any clarifications, please send an email to the same address or call Irene on +254-20-2721262 or +254-20-2717402. Inside Policy Issue No.2 october 2011 Journal of the Institute of Economic Affairs Youth Fact Book: Infinite Possibilities or Definite Disaster? No doubt the Kenya youth present one of its key resources. They also represent the country’s potential for the future. This is also one group that is often misunderstood and faces many challenges such as unemployment and other socio-economic problems. The Youth Fact Book, published by the Institute of Economic Affairs, puts together different youth indicators for the purpose of providing an overview on age, gender, regional and socio-economic status of youth. The book helps identify trends which policy makers could use to develop evidence based policies and therefore meaningfully engage the youth. The book is available on our website – www.ieakenya.or.ke under publications (Research) Regional Integration: Can East Africa Show The Way? Music the Language of Integration 7 23 35 Kenya Food Security Policy: Lessons From China Health Sector Spending in Kenya: Who Gains?