Publication

Publications

An Analysis of the 2017 NASA and Jubilee Manifestos

Manifesto Watch: Analysing the 2017 Manifestos

 Download Full Analysis here

Manifesto Watch: Analysing the 2017 Manifestos

As Kenya approaches the August 8, 2017, general elections, there is need to analyze the implicit and explicit policy proposals contained in the manifestos of the two main leading political camps in the country.

Although quite a lot of promises have been bandied around in political rallies, the manifestos are where the rubber meets the road. The manifestos at least contain the intellectual underpinnings behind the promises made in the political rallies.

Analyzing the political manifestos of political parties in Kenya is not an easy undertaking. Their form and content do not necessarily lend themselves to easy reading or analysis. For example, should manifestos be broad based ideological blue prints that shape a party’s approach to governance? Or should they contain the nitty gritty, granular promises about what the parties intend to once in power? Both the NASA and Jubilee manifestos are a fusion of both. They in a sense contain visions of governance; as well as promises about minute projects that the parties would want to embark on once in power.

In a sense, these problems of structure and content stem from a misconstruction of policy level promises and technical level promises.

We analyze the manifestos from the social, economic and political perspective. In reality, however, the demarcation between the social, the political and the economic is diffuse. Social policies have a bearing on the economic environment and economic performance. Political governance in itself could enable or enfeeble a governments ability to implement its policies.

Social Policy

Our Analysis of social protection policy consists of promises made on education, health, and social protection for youth, women, the elderly and persons with disability. Both NASA and Jubilee have paid conspicuous attention to social policy.  It is noted that as Kenyans undergo significant economic challenges, the coherent social policy could be used to ameliorate the effects of these challenges. Particularly, the underprivileged in various parts of the country felt, perhaps with justification priced out of important markets like health, education, and food. However, an attempt to solve the challenges above could in themselves come at a cost. Economic sustainability, budget deficits, just to mention but a few.  Our analysis of the Social policy takes into account, the direct, and indirect, and the unseen effects of social policy promise contained in the manifestos. We construe social policy to include education, health, and social protection programs targeting vulnerable members of the society.

Education

NASA promises free secondary education for all students, within the first ninety days of their administration. The current budgetary allocation for free day secondary education is 32.4 billion shillings in the 2017/2018 financial year. Were NASA to implement free and universal education, cost estimates would run to around 450 billion shillings annually, or around a quarter of this fiscal year’s annual budget.

On the other hand, Jubilee promises to work towards achieving a 100% transition from primary to secondary school.” In making this promise, Jubilee stops short of promising blanket free secondary education for all Kenyan secondary students by qualifying that free secondary education will only be available for students in public primary and public day secondary schools.”  

NASA proposes to scrap the “Free Laptops for primary school pupils” and redirect the money towards building computer laboratories and libraries in schools. In the current financial year, the Jubilee administration allocated 13.4 billion shillings in the 2017/2018 FY for the free laptops projects. NASA’s proposal laptops for school has the added advantage of involving critical stakeholders in the project, rather than the current top-heavy approach adopted by Jubilee.

NASA has promised to employ 20,000 teachers annually and would have employed 90,000 teachers by the end of five years.

Most of the promises made by NASA and Jubilee on education are quantitative by nature; they assume that increasing outputs like schools, employing more teachers or spending more on higher education easily translates into better education outcomes. Ultimately, publicly funded programs in education or other spheres require a moral imperative on a value for money analysis. Both the Jubilee and NASA manifestos do not place a significant premium on this guiding principle.

Health Analysis

Over the last few years, the health sector in the country has undergone a lot of tumults. Industrial action by health workers has had a debilitating effect on the health sector in Kenya.

Health Data Snapshot

Life expectancy - 62.2 Years

Infant Mortality - 35.5 per 1000 Live births

Public Health Expenditure - 3.5 per cent of GDP

Under Five Mortality - 49.4 per 1000 live Births

In the 2017/2018 financial year, the Jubilee government allocated 60.1 billion shillings to the health budget. On average, county governments spend around 24 per cent of their total budget on health, with health being a devolved function.[1]

Strides seem to have been made on the frontier of  NHIF coverage. For instance, the number of Kenyans registered under the NHIF scheme in 2013 was 3.7 million while it stands at 6.1 million at the end of 2016[2]. The informal sector continues to register a higher increase in the number of Kenyans covered by NHIF as shown by the growth of 26.5 per cent increase in comparison to the formal sector that grew by 12.2 per cent between 2011/2012 and 2015/2016. In achieving the two, a total of 1.1 billion was allocated for the rollout of universal health coverage while 0.3 billion was allocated for the health insurance subsidy for the elderly and disabled in the 2017/2018 FY. In April 2015, member contributions to NHIF were reviewed upwards resulting in higher collections to the fund. Consequently, the benefits to members rose from 4.8 billion to 10.2 billion in 2015/16.

NASA makes the following proposals on health: better coordination between the national and county governments; fully equipped laboratories and equipment in every ward; provision of universal health care for all Kenyans; lowering the cost of drugs by allowing importation of generic drugs; and promotion and prioritization of primary and preventive health care.

The Jubilee Manifesto promises free quality primary healthcare for all Kenyans and the expansion of the NHIF scheme cover to all Kenyans above 70 years of age and provide insurance to families with children with disability. Expand benefit packages for all NHIF members to cover a broader set of services including emergency ambulance evacuation, heart surgeries, and chronic diseases.  Jubilee also makes the promise to increase spending on physical infrastructure in health care.

As with education, there is a need that public spending on health both at the national and the county level delivers value for money. Spending on infrastructure and particularly on health equipment, for example, should be accompanied by congruent investment in human capital for optimum utilization of machinery. Additionally, proposals to enact an authority to coordinate health related policy, human resource, and industrial relations between the national and county government should be fast-tracked.

Social protection

Our analysis of social protection includes policies mooted to help the youth, women, and persons with disability and other vulnerable groups. It includes policy proposals designed either as social safety nets and economic empowerment programs designed to help vulnerable sections of the community priced out of the institutions of the market because of poverty and other constraints. Social policy has a huge impact on economic policy because of finances required to fund social protection programs.

NASA makes a range of policies about social policy. On the youth, NASA makes promises to provide sports sponsorship for youth, fund the cultural economy and devolve the youth enterprise to ward level. On women, NASA promises a Gender Development Fund under women representatives, as well as affirmative action to increase the number of women in various spheres of governance. NASA promises tax relief for persons with disability and livable social security funds for the elderly.

Jubilee makes several promises on social protection. “Merge the Micro and Small Enterprise Authority, the Youth Enterprises Development Fund, the Women Enterprises Fund and the Uwezo Fund, establish the Biashara Bank to provide coordination in the delivery of affordable financing and support for business development. It also undertakes to “Expand the participation of young people in national development and guarantee that 30% of all appointments, projects, and budgets specifically target them.” Centralizing the institutions above could help to improve monitoring and reduce the administrative costs of the institutions for increased efficiency.

Jubilee and NASA, however, should be cognizant of the fact that the best social programs revolve around giving the vulnerable economic opportunities, most specifically as such. Towards this end, the bulk of their social protection policy should be drawn from policies geared towards increasing inclusive growth across the country.

Infrastructure and Energy

Since 2002, Kenya has experienced an increase in investment in infrastructure. The country has seen projects like the African Development Bank funded Thika Road Project at the cost of 27 Billion Shillings,[3] and the Standard Gauge Railway project costing 320 Billion[4] shillings. Kenya is also developing the Lamu Port Southern Sudan-Ethiopia Transport Corridor (LAPPSET) project costing 24.5 billion USD. Additionally, in 2016, Kenya’s construction industry was valued at 3.53 billion USD.  It is expected to grow to 6.21 billion USD by the year 2020.[5]

However, although there have been developments on the infrastructure scene in Kenya, large areas of the country remain unnerved and underserved by the infrastructure network in the country.

NASA makes the following promises on infrastructure: Enable competition in the generation, transmission, and distribution of electricity; Restructure the Energy Regulatory Commission and remove import taxes on renewable energy prospecting equipment. NASA’s infrastructure and energy proposals seem rather promising; they would liberalize and dynamize the energy markets. Competition in electricity distribution, for example, would improve quality and service delivery.

Jubilee focuses on the construction and development of physical infrastructure. Some of the projects mooted by Jubilee include: Implement an integrated transport infrastructure system by linking production centers in the Northern Corridor, the Central Corridor and the LAPSSET Corridor with cost-effective transport, logistics, energy and utility systems to ease trade and reduce production costs. Together, these corridors cover more than twenty counties. They will open more than 75% of the country’s land mass. Construct a rail link from Lamu to Miritini, a road from Lamu to Isiolo and complete the development of the remaining 29 berths in Lamu port and Complete the 7,000 kilometers of road currently under construction. They undertake to work with County Governments to increase the coverage of rural access roads to enable farmers to take produce to the market quickly and cheaply.

Jubilee’s infrastructural projects have to be evaluated against a backdrop of the financing mechanism required to deliver to pay for the projects. In the past, Jubilee has taken up borrowing to fund infrastructure projects. Gross public debt increased from 44 per cent to 52.4 per cent of GDP. The International Monetary Fund (IMF) estimates that Kenya’s public debt is expected to stabilize at around 54% - 55% of GDP in 2017- 2018.

With this regard, the desire for new infrastructure must balance against prudent public financial management particularly the management of public debt.

Industrialization and the Business Environment

Kenya’s development planning happens under the auspice of the Vision 2030, as an all-encompassing development blueprint.  The goal of vision 2030 is to transform the country into a middle-income country by the year 2030. Much of the impetus for economic growth envisioned in Vision 2030 anchors on industrialization as an engine for growth. In its own words, “it aims at transforming Kenya into “a newly industrializing, middle-income country providing a high quality of life to all its citizens in a clean and secure environment.”

However, the transformation envisioned in Vision 2030 is not yet realized. For example, in the years 2015 and 2016, growth in the manufacturing sector in the country averaged 3.3 per cent, far behind sectors such ICT, real estate and financial services. Ideally, growth in the manufacturing sector should provide the platform upon which other sectors should grow. Additionally, Kenya’s glacial pace of growth in manufacturing is far outpaced by her Eastern African and other African peers, like Uganda, Ethiopia, and Tanzania.[6]

Because of the preceding, it is no surprise that NASA pays a specific focus to industrialization in their manifesto. NASA makes the following promises on Industrialization: Collaborate with counties to establish industrial parks for micro and small enterprises in every county; Collaborate with counties to establish county workshops where Jua Kali entrepreneurs can lease machine time at affordable rates; Provide technical support services to help entrepreneurs with design and product improvement; and Establish incubators to help SMEs to develop competitive products and break into the continental export markets.

On the business environment, NASA makes the following Promises: Fast-track the automation of land registries, Implement the National Payment System Act; Make entrepreneurship training a key component of the education system and Pursue responsible external and domestic borrowing to get Kenya off the debt treadmill.

On industrialization and the business environment, Jubilee makes several proposals. They include improving Kenya’s global ranking on Doing Business Indicators from our current position of 92 to within the top 50 and further lower the cost of doing business for both domestic and foreign investors. Create and fully implement a robust Small and Medium Enterprises (SMEs) development and support program, which would formalize the large number of informal businesses and support their growth from micro to small to medium enterprises, and eventually into large firms. This would catalyze the creation of at least 1 million jobs and contribute to tax revenues, and By 2022, at least 1 million entrepreneurs in the Jua Kali sector, which forms a core pillar of economic activity in Kenya and contributes close to 25 per cent of our GDP will have become established as formal small or large enterprises. The sector employs 11 million Kenyans, 50 per cent of the country’s workforce. Unlocking SME potential is a necessary condition for the transformation agenda.

As previously mentioned in this analysis, the misconstruction between policy level and technical promises makes it difficult to analyze. This problem is particularly compound in the analysis of both NASA’s and Jubilee’s promises on industrialization and the business environment. This is because it is not clear, or at least no rationale exists for deciding what should precede the other. Do broad-based policy frameworks have more impact on the business environment? Or, do small technical tweaks in the operating environment have more impact?

Thorough going and broad base political frameworks should be anchors upon which technical tweaks are made. In this regard, both NASA and Jubilee needed to have paid more attention to salient rigidities that stand in the way of faster, intensive industrialization before proposing granular changes at the technical level. In essence, technical decisions are rather more appropriately left to technocrats within government departments. The responsibility of providing the policy frameworks upon which these technical tweaks are made should be the responsibility of politicians, in this case, NASA and Jubilee.

These changes in “soft infrastructure,” particularly strengthening the rule of law systems, protecting both intellectual and physical property, fighting corruption and reducing arbitrary rule making by regulatory agencies and government officials seem to have received a wide berth from both NASA and Jubilee.

Such changes in soft infrastructure require relatively smaller financial resources and in Kenya’s case might very well be the elixir that Kenya industry and business have been looking for all this time.


[2] Economic Survey 2017

[Download the Full Analysis Here]

Intellectual Property Rights in Kenya: Ignoring the Goose that could lay the Golden Egg

Enforcement of Intellectual property Rights in Kenya remains an arduous despite the presence of elaborate legislation concerning them. Most of the owners are not aware of the laws put in place to protect their property rights while enforcement have little understanding of them, and most often than not are reluctant to implement the laws. It is the reason why some artists sign off their rights without reading the content of the documents they are signing. Further, some enforcement officers don’t see the sense of copyright owners complaining, for instance, when books are photocopied and yet the books are still in the shop. This paper aims to look at what ails the Intellectual Property Rights System in Kenya and the potential impact on the country’s economy. 

[Download the Full Report Here]

Bitter Sugar: How Government Policy Has Left The Kenyan Sugar Industry In Chaos

From the colonial days to present day, the sugar industry has been an integral component of the Kenyan economy. It has grown in significance over the years, in the present day the sector contributes about 15 percent to the country’s agricultural GDP, the industry also supports around 250,000 small businesses, workers and farmers. An estimated 25 percent of the country’s population depends directly or indirectly on the sugar industry for their livelihood. While facing stiff competition from international sugar producers, the Kenyan government has pursued mercantilist policies in order to protect domestic sugar producers and enforces consumption of domestically produced sugar through a myriad of policy tools. Whereas this policy approach has seemed politically prudent and expedient, it has come at the cost of a vibrant and competitive sugar sector. This paper chronicles the role of the state, through its policy tools and instruments in altering the incentive structure for various players in the sugar sector. This analysis is examined from the prism of four distinct but at times overlapping policy regimes: the State Centric Regime, the SAPs Liberalism regime, the mixed market regime and the COMESA Regime. While many past studies have analyzed the general state and the technical malaise in the sugar industry in Kenya, very few researchers have sought to proximate the role of the state in the performance of the industry. This paper adopts an institutional approach to depict the evolution of state involvement in Kenya’s sugar industry, as well as explore the ramifications and unintended consequences of state interventions.

 

[Download the Full Report Here] 

Struggling With formal And Informal Trade Barriers

Formal and informal trade barriers remain major obstacles to economic growth and social development in the East African Community (EAC). In the World Economic Freedom Report 2013, EAC countries -- Burundi, Kenya, Rwanda, Tanzania, and Uganda -- ranked in the bottom 60 in the freedom-to-trade index among the 152 countries surveyed.i Although tariffs on major commodities have declined significantly under the East Africa Common Market Protocol (EACMP), which aims at the “free movement of people, goods, services and capital”, economic models consistently show that trade between East African economies falls far short of its potential.ii That potential is being thwarted by a variety of impediments to free trade among the region’s economies. Further trade liberalization in East Africa requires not only reducing duties but also getting rid of trade barriers of all kinds. Moreover, intraregional trade will not flourish without eliminating licensing fees, complex custom procedures, and delays at borders, even if these are not explicitly intended to impede trade. Thus a well-integrated transport infrastructure and improved logistical performance are critical for the EAC’s further trade integration and economic development. We believe that government initiatives, including the EACMP, have not effectively addressed nontariff barriers that continue to cost millions of dollars in waste to businesses and consumers every year. In this paper we examine the challenges that trucking businesses, the most important inland facilitators of trade, face when operating along two major EAC corridors. Further analysis will address concrete steps to assist the EAC in decreasing transportation obstacles in order to permit more inland trade.

[Download The Full Paper Here]

 

 

Publications

  • Research Papers
  • Summary
  • Workinng papers
  • Presentations
  • Policy Briefs
  • E-newsletter

Media

  • Press release
  • Media Coverage
  • Media policies

Events

  • upcoming


Contacts us

  • EAPC