Memorandum submitted by CARE Kenya
(Submission to DFID Kenya as part
of DFID Kenya's consultation on its Country Assistance Plan 2004-07)
Thank you for the opportunity to comment on
the CAP. First, some general observations:
— The document is well written, clear
and fairly concise.
— The document lays out the problems
and context well, and bridges those with strategy in a coherent
and logical way.
— The objectives read well as intent
statements but in our view the related sub-strategies lack sufficient
specificity in a number of areas. Language such as "support",
"engage", and "support enabling environment"
is used often leaving it to the reader to speculate how this strategy
will be put into action.
— There were no indicative resource
amounts set against each objective so it is difficult to comment
as to whether we think resources are allocated to objectives in
the right proportions.
— We believe that in the "risk
to poverty reduction", the probability of "government
coalition disintegrating" should be moved from low to medium;
the impact of "lack of progress on trade" moved from
low to medium; and the "government lacks human and systemic
capacity (perhaps more specifically, the lack of will of the public
service) to implement the ERS" should be moved from medium
to high in both probability and impact, especially since the turnaround
strategy for Kenya is the ERS.
With the foregoing in mind, we would like to
comment as follows:
1. DFID have identified causes for Kenya's
decline and correctly identified the main cause as poor governance,
the illegitimate use of power by a few and lack of accountability,
particularly of public institutions and processes. The paper provides
a good description of the situation in various sectors and goes
on to link that to the proposed strategy, the core of which is
support to the Economic Recovery Strategy.
2. CARE agrees with the analysis and the
proposed strategy but we question the strategy to the extent that
it appears to concentrate DFID efforts on supporting the improvement
if not transformation of a range of governmental institutions
as the key drivers of economic recovery, rather than the private
and non-state sectors. DFID's view is probably based on the assumption
that broad-based, multi-sectoral change must be lead by government,
however, we question the likelihood that government—notwithstanding
the unprecedented political changes that occurred in December
2002—is willing or capable of driving, and following through
on change; in effect of reforming itself. While our conclusion
may be wrong, the strategy appears to be putting too many or most
of the eggs in the public sector basket whereas we believe more
support needs to be given to civil society organisations and the
private sector, the latter of which is going to be where the bulk
of investment is made and wealth is created, as is the case throughout
the world.
3. It is widely held that poverty is not
going to decline in Kenya without sustained economic growth. In
fact, the GoK acknowledges this (point C.2) and further states
that economic recovery will come primarily from improvements in
the productive sectors of the economy. It is our view that government's
role needs to be unambiguously that of facilitating local and
foreign private sector investment into these sectors, and at the
same time of active disengagement from actually trying to perform
functions in these sectors whether through parastatals or government
ministries, for example in the case of agriculture extension to
smallholder farmers.[1]
DFID has an important role to play in actively encouraging government
with aid incentives or disincentives, to move in that direction.
Transformation will not happen automatically; in fact, it is likely
that various levels of government will resist these essential
changes.
4. While economic growth is essential to
poverty reduction it is also widely held that on its own growth
is not enough. The ERS should not be the sole underpinning driver
of DFID's engagement—but it should continue to significantly
inform the process. Until its poverty focus is strengthened, and
until it can look beyond the mere generation of macro-income and
address issues of equity and public services, it would be unwise
to make the ERS the sole or primary driver of decision-making
on policy and budget allocations. We believe there is significant
scope to develop models or frameworks to better manage public
sector operations (and we comment further on that below) and that
DFID can and should take the lead in making that happen.
5. The CAP strategy, which features government
at the centre of economic transformation around the productive
sectors of agriculture, manufacturing, trade and industry, and
tourism needs to consider the following impeding or resisting
factors, and incorporate sub-strategies to deal with them:
— Limited resources available for investment:
government spending accounts for between 30%-40% of GDP, and most
of this is wages and debt financing[2]
(C.10); so government does not have much money for productive
investment. Kenya needs to unlock the resources of the non-state
sectors for investment.
— Capacity to absorb new donor investment:
late last year, the donors made commitments of approximately $4
billion, but can that level of resources be absorbed well? Government
disbursement of past credits has been consistently under-target
and not necessarily used productively.
— Need for public service reform: what
will be the efficiency and effectiveness of new investment if
it is channeled through existing systems and structures, which
not only need improvement but urgently require comprehensive reform?
As mentioned above we believe government should move away from
implementation of functions and focus on regulation of sectors
and facilitation of service provision by non-state players. The
draft plan does acknowledge this in point C8.
— The effect of investment without
reform: E16 describes DFID's intention to invest resources in
government. While this is important, we believe that large investments
made in the absence of civil service reform will be wasted. Mention
is made in the CAP of a new public sector salary structure (presumably
increasing salaries), and reducing the wage bill to 8.5% of GDP.
These two things can happen only in the context of major civil
service reform.
6. With respect to the objectives of the
CAP, we have the following comments:
To strengthen accountability and poor Kenyans'
access to high-quality services
— We concur with the choices of sectors—education,
health (especially HIV/AIDS), and agriculture. [3]
— We agree with point E6 that role
clarity is critical, but ask what does this mean in practical
terms? The poor badly need access to quality services in all sectors,
whereas existing services are inadequate, therefore what is DFID
proposing exactly?
— At the risk of being too specific
or perhaps self-serving, we encourage DFID to support efforts
of CARE who have been working with the CDC, PSI and Ministry of
Water in expanding the availability of the Safe Water System (SWS)
to poor Kenyans. The SWS is a water purification technology that
combines chlorination, safe storage, social marketing and education
to make existing water sources safe, and has proven to be very
effective in reducing prevalence of diarrhoea in Kenya and several
countries in Africa, at very low cost. The SWS is one technology
with the potential to reach large numbers of the poor, through
existing wholesale and retail networks at very low cost per person
reached.
To promote sustainable economic growth which benefits
poor people
— We strongly endorse this objective.
The poor do not need handouts or even subsidies, they need opportunities
to access markets at a fair price—markets for services,
production-enhancing inputs, capital, markets for their produce,
etc. At the moment the poor do not have access to most markets
for various reasons including: perceived risk in dealing with
the poor by private sector lenders and services providers; or
high transaction costs; or institutional policy barriers such
as requirements for collateral; to name just a few constraints.
We believe many of the existing services markets, inputs/outputs
markets and capital markets are at best imperfect and in many
cases dysfunctional since the majority of the population cannot
access them.
Leaving the poor to cope on their own with hostile
markets, or to expect existing market players to expand outreach
or develop innovative pro-poor products and services on their
own is not going to achieve economic growth that benefits poor
people. The private sector needs to see the business case for
making new investment. DFID and others such as CARE have a role
to play in demonstrating to markets that the poor are good investments
and in fact represent huge untapped markets and future market
share. DFID's CAP therefore should strive to work with non-state
players including CARE[4]
and the private sector especially in the agriculture sector to
encourage the development of commercially-viable, replicable and
scalable business models that enable the poor to access markets
and which create sustainable income streams. In other words, take
the lead in showing that markets can work for the poor and not
exclude them. This will require setting aside resources for innovative
pilot activities, and to share risk with the private sector and
NGOs (for example in the form of loan guarantees or risk sharing).
Multi-sectoral response to HIV/AIDS
— We strongly endorse this objective.
The effect of AIDS is arguably one of the biggest impediments
to development and poverty reduction in Kenya. However, if DFID
is going to invest resources aimed at making NACC and NASCOP relevant
to AIDS-affected Kenyans and CSOs fighting AIDS, then it must
hold NACC and NASCOP accountable to perform competently, cost-effectively
and with a sense of urgency in line with the scale and impact
of the pandemic. Civil society organisations and affected Kenyans
are in general disappointed with the performance of NACC and NASCOP.
— DFID should work with non-state players
to develop working and replicable models that can be scaled up
regionally or nationally that put into action (as is stated in
point C11) a "genuinely multi-sectoral strategy that comprehensively
addresses prevention, care and mitigation and which looks beyond
the health sector to include all aspects of social and economic
life". This is what will win the fight against AIDS, but
we are a long way from seeing this sort of holistic approach functioning
in practice.[5]
Consortiums with significant outreach such as HACI or KANCO should
be supported.
BRIEF COMMENTS
ON PART
III—ANNUAL PLAN
— Under reducing vulnerability and
risk, CARE would like the opportunity to compete (in addition
to Oxfam) for resources under the CAP that will support institution
building in pastoral areas, and advocacy. We have been working
in the ASALs for over a decade and have extensive experience in
capacity building of Water User Associations around water resources
and livestock production, as well as conflict management among
pastoral groups. This work has been supported in the past by DFID.
— Under response to HIV/AIDS—we
agree the CAP should work towards donor harmonisation in the AIDS
sector by not only working to improve the Global Fund mechanism
but also bearing in mind consortiums and funding mechanisms already
in place, including: the Hope for African Children Initiative
(HACI) which, through consortium members, has national outreach;
the PEPFAR; and the USAID-funded CORE and ACQUIRE projects.
February 2004
1 The notion of turning around parastatals before privatising
is counter to good business experience in Kenya and elsewhere.
The process and outcomes from the privatisation of Kenya Airways
should be a model for other parastatals. Back
2
DFID might wish to consider unilateral measures to reduce the
debt servicing to the UK in order to free up internal investment
capital. Back
3
CARE Kenya's mission is put into action around four focus sectors:
commercialisation of smallholder agriculture, coping with HIV
and AIDS, civil society organisation strengthening, and disaster
response and mitigation. Back
4
CARE's REAP project-Rural Enterprises for Agribusiness Promotion-is
one way in which we are helping subsistence farmers move to commercialised
agriculture and access export markets. REAP is a business model
executed in conjunction with two large fresh produce exporters,
that enables poor farmers to access and pay for an integrated
bundle of business services necessary in order to produce Asian
vegetables at a quantity, quality and consistency to meet forward
contracts with Kenyan exporters and UK buyers. This farmer-CARE-exporter
relationship is currently providing over 20MT of fresh vegetables
per week for export. Back
5
In Siaya district, CARE is working with government, communities
and the CDC to integrate a PMTCT service into the existing health
delivery system in eight facilities. The initiative is about improving
supply of services provided by institutions and increasing demand
for those services by communities. We plan to expand that activity
to up to 30 facilities-governmental, faith-based, and community-run
facilities. CARE will deliberately integrate this initiative with
two others: a savings-based micro-finance programme and a smallholder
agriculture programme, in an effort to build a working model of
a "genuinely multi-sectoral strategy" that people affected
by AIDS badly need. Back
|
