Sunday, 14 May 2017

Kenya needs to Re-think Agriculture and Climate Change in Addressing Food Security

"We all must understand that saving our planet, lifting people out of poverty, and advancing economic growth are one and the same fight. We must connect the dots between climate change, water scarcity, energy shortages, global health, food security, and women’s empowerment. Solutions to one problem must be solutions for all," said Ban Ki-moon former Secretary-General of the United Nations in 2011.

The former Secretary General further reiterates what most nations are currently facing that, "The global economy is generating pressures as well: rising joblessness, widening social inequalities, and the emergence of new economic powers."

The Food and Agriculture Organisation (FAO) says, at the level of individuals, people living on less than US$1.25 a day may need to skip a meal when food prices rise. Farmers are hurt too because they badly need to know the price their crops are going to fetch at harvest time, months away. If high prices are likely they plant more. If low prices are forecast they plant less and cut costs.

The developing world's poor are experiencing the effects of higher commodity prices, and declining agricultural productivity growth is exacerbating the problem.
In Kenya, people depend on agriculture not just for raw materials but also for their food supply. Food is necessary to satisfy hunger and to provide the necessary nutrients for healthy growth.

However, with the inflation rate estimated at 11.48 percent year-on-year in April of 2017, compared to a 10.28 percent rise in the previous month. The inflation rate remained the highest since May of 2012 mainly driven by rise in food prices as the country struggles with a drought. Inflation, according to Kenya National Bureau of Statistics (KNBS) data.

Analysts disclose that food prices are likely to remain volatile.

“The rate of inflation is expected to be on the rise this year, driven by high food prices due to the ongoing drought, which according to the Meteorological Department (KMD) department will persist, as it projects below average rainfall in the March-May season, and high fuel prices following the revisions by the Energy Regulatory Commission (ERC),” according to CytonnInvestments.

“The food situation in the country has deteriorated and this has had a massive impact on inflation, as the food component of the Consumer Price Index (CPI), which carries a weighting of 36.0% has been on a gradual increase over the past three months, clocking month on month changes of 1.2%, 1.3% and 1.7% in November, December and January 2017, respectively,” The add.

Kenya's peasants are migrating to the cities in huge numbers because it is becoming increasingly difficult to survive on their farms.

Why? In Kenya, farm inputs - fertilizer, quality seeds and the input placed in the cultivation of crops is more than what is received from the yield. The farmers get a raw deal in selling the produce.

Farmers are trapped into using inefficient technologies; average cereal yields have barely increased in 40 years and farm sizes are shrinking. Although Kenyan farmers are leaving the farm, far too few are finding productive jobs in the cities. Most are getting poorer, the cost of safety-net programmes is escalating and Kenya’s dependence on concessionary food imports is growing.

Cytonn is of the view that the country is still at manageable levels when it comes to import dependency.

“Kenya’s dependency on imported food has improved over the last five years, with the import dependency ratio on food products, vegetable products and animal products having declined by 0.8% points, 0.9% points and 0.3% points, to 28.3%, 31.7% and 0.8%, from 29.1%, 32.6% and 1.1%, respectively. The country’s ability to cater for its food needs without external assistance has also improved over the last five years, with the country’s self-sufficiency ratio on food products, vegetable products and animal products having risen by 0.6% points, 0.6% points and 0.1% points, to 75.2%, 72.1% and 100.0%, from 74.6%, 71.5% and 99.9%, respectively.”

“The Current import bill is at 35 billion dollars and it is estimated to be at 110 billion dollars by 2025,” Dr. Agnes Kalibata, President, Alliance for a Green Revolution in Africa (AGRA).

As the recent world food crisis has demonstrated, these trends can have catastrophic consequences for the continent's poor.

In an annual report produced by the Rome-based U.N. Food and Agriculture Organization, the World Food Program and the U.N.'s International Fund for Agriculture Development  on the state of food insecurity around the world, the U.N.'s three food agencies urged governments to make good on pledges to share information about farm forecasts and food stock levels to avoid the price swings that resulted in food riots in 2006-2008 and an eight percent increase in the number of undernourished people in Africa.

"Changes in income due to price swings that lead to decreased food consumption can reduce children's intake of key nutrient during the first 1000 days of life from conception, leading to a permanent reduction of their future earning capacity and an increased likelihood of future poverty with negative effects on entire economies," the report said.

A question that begs for an answer is, should the government keep on banking the projections from the Meteorological department?

Long-term measures are required to secure Kenya’s food, energy and fuel supply through establishment of strategic national reserves.

This is not enough if no sound policies are formulated and implemented.

“We need long-term solutions to alleviate the adverse impacts of climate change and unpredictable weather patterns.

We must build the resilience of communities and invest in agriculture and rural infrastructure,” according to Siddharth Chatterjee, the United Nations Resident Coordinator and the UNDP Resident Representative in Kenya in an op-ed in the Huffing post

"Piecemeal responses to climate-related emergencies can no longer suffice. We need sustainable solutions to effectively tackle drought and its devastating impacts on Kenya’s most vulnerable communities,"He adds.

 Kenya must continue to build political institutions that generate dynamic stability. Internal security must be guaranteed to enable a stable civil environment that upholds security of persons, property, access to and equality before the law. Governments must build social cohesion, eliminate conflict and ease the paths to self-betterment for its citizens through equitable access to resources, services and opportunities that will improve earnings, consumer purchasing power, savings and investments.

Kenya must renew its efforts in fully investing into the agricultural sector through enough budgetary allocation.

Meager resources allocated to the sector has led to  the appalling state of rural infrastructure in many rural towns, it has not fully exploited its irrigation a reason why Kenyan farmers rely almost exclusively on rain-fed farming and face exceptionally high transport and marketing costs that makes a shift to more efficient farming unprofitable.

The government also need to invest heavily in agricultural research, irrigation, rural roads and power. They also need to provide direct policy support to their farmers by shoring up farm credit systems, subsidizing vital inputs like fertilizer, power, and water, and intervening in markets to ensure that farmers received adequate and stable prices.

This in return FAO says “Investment in infrastructure, marketing systems, extension and communication services, education, as well as in research and development, can increase food supply and improve the functioning of local agricultural markets, resulting in less volatile prices."

More importantly, increasing revenues for the agricultural sector and rural economies could attract investments in infrastructure and human services.

 FAO report proposes for "more information and better information” to allow transparency in trade on future markets.

“This would help ensure that governments and traders make informed decisions and avoid panic or irrational reactions," and it also reiterates the importance of safety nets in cushioning the vulnerable. At country level, governments can protect themselves from food price increases through a variety of financial arrangements such as call options, which would give them the right to buy food at a set price even months ahead, regardless of how the market has moved in the meantime."

Friday, 7 April 2017

Kenya to set up online portal for Investors seeking to Invest in the Country

Better access to information on investments opportunities in the country is going to strengthen Kenya as a preferred investment destination in Africa with the establishment of the One Stop Centre (OSC).

The center will be operational from April as announced by Henry Rotich, the Finance Minister during to parliament during the reading of the fiscal year 2017/18 budget.
Rotich also announced that the Government has established e-regulation and will soon be establishing the e-Opportunities to enable investors interested in Kenya to search for investment opportunities available in Kenya from the comfort of their homes.

“These initiatives, in addition to the existing Huduma Centres, will provide comprehensive information to investors on licenses, permits and approvals that are currently offered in a multiplicity of Government agencies located in different parts of the city, further sustaining increased FDI inflows in the country,” said Rotich.

For a long time, access to information on investment opportunities in the country has been inadequate especially to the Kenyan diaspora and investors who would want to invest.

However, Kenya wants to attract more investors after ranked third most reformed country in the world in World Bank Ease of Doing Business index by the Doing Business 2017: Equal Opportunity for All Report. The country was ranked 136 to 92, largely due to reforms in getting credit, getting electricity and ease of starting a business.

As result, Treasury reports that the foreign direct investment (FDI) has risen from about US dollar 0.514 billion in 2013, to at least US dollar 2.3 billion in 2016.

With a projected steady economic growth for this year at 5.9 percent in 2017.

In 2016, the real estate sector emerged as the best performing asset class delivering returns of on average 25.8 percent against an average of 8.5 percent for equities, 0.2 percent on the NSE FTSE bond, and 11.6 percent for the 364-day bill.

Further, economists, have projected impressive growth forecast across many key sectors in sub-Saharan Africa including power generation and infrastructure, mobile technology, financial technology, agriculture, welfare, insurance, banking and tourism.
Kenya through the Finance Minister says,:

“Our economy is growing at twice the pace of global growth and more than twice that of Sub Saharan Africa. We are also growing faster than both Nigeria and South Africa whose growth is projected at 0.8 percent in 2017 for each country.”

This is an opportune moment for the diaspora community to be motivated to invest in the country.

Kenya is set to significantly benefit by capitalizing on their links with its Diaspora with the effectiveness and implementation of the measures to design policies and legislation to create an enabling environment for the Diaspora to participate fully and contribute to the development of their country.

The number of Kenyans abroad is estimated to be about three Million and is continuously on the rise.

For instance, diaspora remittances have maintained an upward trend in the country over the recent past thus contributing significantly to the country’s foreign exchange inflows.

Most of the money sent by about half a million Kenyans living in the Diaspora, according to the World Bank, is used to fund investment projects, a move that has attracted local companies, especially in the banking sector.

Saturday, 25 March 2017

Hopelessness among Kenyan youth a time-bomb

If you ask any youth now what they would want to become in the future, be sure to get a variety of replies, some strange and unbelievably outrageous at their age.

I asked one boy a similar question and I cocked my head to the side waiting for his response. He was only about 12, but he looked mature for his age. His face was firm and his lips looked parched. At one point, I wished I had a bottle of clean water to give him.

The slums of Manyatta in Kisumu city from where he was growing up, had limited supply of electricity and the sanitation services were not as good as the kind I grew up with. Dirty puddles of water in the middle of the roads, shanties patched by polythene and cardboards, the conditions were not even fit for a pauper to live in.

The murky sleepy slum with dilapidated infrastructure including a makeshift primary school was his world. But out there beyond the indistinct legal boundaries of this cursed people, there is another world, a world with better choices, a world where the likes of this boy, are not welcome.

I posed the question carelessly, expecting an answer a boy his age would give without a doubt, but his reply made me pause and wonder what was really going on in his head.

“I want to be like my dad,” he replied. He was serious. I knew the father fairly from the times I went off-beat in the slums, in fact he was one of my sources when I interned as a reporter with Nation Media Group. Besides tipping me when something happened in the slums, he was an unskilled, casual laborer who always smelled of cheap booze and was always hustling for people like me for some loose change.

Of all my thoughts at the moment I could only think of what in the world did this child admire in his father? And what was it that he wanted to emulate?

 The inference from the response was both disconcerting and tricky. The boy was looking up to the leader in his life; the role model who would effectively shape his future. I argued out that he was on the path that would lead him to become a riff-raff in the society and a foe to the ‘other’ world.

As innocent as he looked at the time, his face would soon change, hardened by the realities of deprivation. It will not matter that there is a new constitution that speaks of human dignity and promotes basic human rights like the right to life and liberty, the rights to a decent standard of living, the right to work and the right to education.

I wondered why the young boy was in such a dipshit and not me as I made my way out of the slums. I also wondered if I was in Peter Pan’s world to think that Kenya, on its own, will re-organize itself for the sake of the likes of this little boy and others like him growing up with no hope of ever enjoying the freedoms that some of know.

Is the new constitution really an anchor of safety and security for people like him? Or is it just another document for intellectuals like me to discuss and debate about in the office with my boss and colleagues?

I realized that something is amiss. Something is seriously wrong with a country that boasts of economic growth and celebrates almost 50 years of independence, and yet it does nothing at the pathetic situations the slum boy and his generation face, a generation of total despair and self-destruction.

Have you looked at the number of young adults reported to have succumbed from consumption of illicit brew i? It is mind-boggling. The same goes for slum dwellers and low income persons who died trying to siphon fuel from a leaking pipeline and tankers.

I do not mean to be mean but the likes of the little end up in places like Sinai, Kibera and Mukuru when they leave small slums like Manyatta to search for ‘greener pastures’. A dead end when they realize life is harder than where they actually came from.

No one can solve the problems of millions of disillusioned young people of this generation considering the high birth rate of children in poverty stricken areas. I cannot pretend to have a ready solution for the boy and his generation but my country does. The answer lies with the politicians, if they could change their attitudes, opinions and root for the best in the people who placed them in power.

Written by Robert Kondigo