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The Unwinnable War: How the Myth of an ‘Institutional’ Solution Has Hobbled the Fight Against Graft and Wasted Time and Resources

The political vernacular of corruption has lost its lustre, especially with the millennial generation, who today perceive corruption not as the abuse of public office for private gain but the abuse itself lays in the existence of the public office.

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The Unwinnable War: How the Myth of an ‘Institutional’ Solution Has Hobbled the Fight Against Graft and Wasted Time and Resources
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What is clear is that in Kenya’s case, the public policy reform/technocratic approach to fighting corruption has become utterly irrelevant in the current political context. The Presidential ‘Summit’ on Governance and Corruption in November 2016 as former anti-graft Czar John Githongo opined was the final nail in the coffin of the ‘technical fix’ to corruption when President Uhuru Kenyatta expressed his helplessness, ripped into his anti-corruption officials and their approach, and basically reduced the event to a public relations exercise. Kenyans have done all the anti-corruption benchmarking, created all the anti-graft institutions, committees, working groups, task forces, units; drafted all the frameworks and policy papers; taken all the advice possible from multilaterals, bilaterals, NGOs, the private sector and others including churches; enacted all the laws and their subsidiaries; held all the conferences, summits, workshops and get-togethers possible. Fundamentally, what started in 1956 with a series of legal and institutional reforms aimed at improving governance and fighting corruption was a phase that ended with Presidential Summit on Governance and Corruption in November 2016. But the history of corruption didn’t begin here.

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In 1888, the Imperial British East Africa Company (IBEACo) claimed Kenya as one of its territories. That arrangement continued until 1895 when the territory reverted to the British as the East African Protectorate encompassing areas deemed “waste and unoccupied” that did not have a settled form of government. In the early 1900s, Europeans began to stream into the country at the invitation of the colonial government and were allocated the most fertile land upcountry in areas where for generations Africans had farmed, grazed animals, and practised their customs freely. The consequence was that the indigenous people were driven to low-density areas unsuitable for agriculture with low rainfall, poor soil, and absence of pasture. Those who didn’t find a place to settle became squatters in white farms or worked as labourers for Asian merchants. The expropriation of African land by Europeans was done fraudulently and represented one of the first acts of land grabbing and looting by the colonial regime in Kenya. They just grabbed African farms without much effort to hide their activities. Until then, the African lands were secured by the Protectorate.

Regulations of 1897 forbade any alienation of land regularly used by Africans unless the colonial administration was satisfied the land was no longer regularly used and that Africans would not be adversely affected. That changed with the Crown Lands Ordinance of 1902 which gave the government jurisdiction over all lands subject to the right of occupation by Africans. From that time, African ownership of land was not recognized; only occupation and use of it were permitted.

The Unwinnable War: How the Myth of an 'Institutional' Solution Has Hobbled the Fight Against Graft and Wasted Time and Resources

Dawa ya Ufisadi

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In 1915, another Crown Land Ordinance was passed giving whites 999- year leases. It also transferred all lands formerly occupied by Africans to the control of the governor, and barred European landowners from employing non-white managers or supervisors to be in-charge of their holdings. The Ordinance also created African reserves to be located away from white settlements. As the whites entrenched themselves, more land laws were passed to govern different parts of the country making the Land Law in Kenya one of the most complicated land systems in the world. After World War II, the British government heightened the process of settling former servicemen by grabbing more land. Overall, 1% of the white population occupied 16,500 square miles of land.

At that time, crown or public land comprised 76.97% of Kenya. It included everything from forests to lakes and rivers. However, 70% of it was in the dry Northern Frontier Province, inhabited mainly by Somali ethnic groups. Of the total land area, only 1.9% was put to agricultural use at the time and almost all of it by white settlers. Thus, while each of the majority Africans occupied one or two acres on average, whites were sitting on 160 acres each per person.

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In 1935, Archdeacon Eric Burns, a British member of the Kenya Legislative Council (LegCo), complained that chiefs were forcing widows exempted from taxes into paying them a bribe so that the widows could retain their exemptions; and that animals sold in distress for non-payment of tax were undervalued and purchased by the chiefs and their henchmen. The evil of corruption and bribery got worse when colonialists enacted the Chief’s Act in 1937 giving the officials a wider latitude of powers, including maintaining law and order, collecting taxes to help sustain the luxurious lifestyles of whites, overseeing agricultural activities in their areas, and mediating disputes. To meet their financial needs, chiefs habitually confiscated livestock from tax defaulters to swell their herds, and accumulated land that really belonged to other people.” It was routine for chiefs to raid a village and demand surrender of personal property under threats of arrest. They collected hut and poll taxes and retained part of the money. The more levy they collected the more money went into the Exchequer and into their pockets. During colonial times, chiefs commanded respect and trepidation from locals in equal measures. Chiefs exerted themselves to please the authorities, often taking actions that turned out to be abuse of peoples’ rights. They sometimes beat and tortured innocent villagers to demonstrate their commitment to duty and loyalty to their masters. As the government’s “eyes” on the ground, chiefs frequently held barazas to explain colonial plans and policies, and were spokespeople and translators for white administration officials.

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The biggest known case of public corruption in Colonial Kenya involved the construction of the Mbotela and Ofafa housing estates on the east part of Nairobi in the 1950s. According to Joe Khamisi in his seminal work Kenya: Looters and Grabbers: 54 Years of Corruption and Plunder by the Elite, the project was intended to ease accommodation problems created by mass movements of people from the rural areas in search of jobs in the city, as well as the return of African soldiers from World War II. Thirteen thousand bed spaces per year were scheduled to be built over a period of five years at a cost of GBP.2 million (KES.273 million), which was to come as a grant from the Colonial Development Corporation (CDC). In those years, construction work was dominated by big European and Asian owned firms though many small “one-job-at-a-time operations” also existed. Those nondescript companies were prepared to take any job even though they didn’t have proper equipment and relied on cheap unskilled labor. Soon after tendering for the housing project was done and contracts awarded, news went around alleging corrupt practices in the selection process. The Criminal Investigation Department (CID) was called in to investigate. When news reached London, the British government appointed Sir Alan Rose a well-known lawyer to head a three-man commission with a brief to “examine accusations of corruption and malpractices in every aspect of the affairs of the Nairobi City Council.

A long list of contraventions of building specifications was provided, including “shallow excavation of footings, under-strength concreting in floors and lintels, substandard joinery, the use of cheaper, weaker materials throughout, and generally poor standards of workmanship” – all of which had apparently been approved by council officers in exchange for kickbacks. One of several officials implicated in the debacle was the city engineer Harold Whipp. Before the council made the decision to sack him, Whipp committed suicide and his body was found on a railway line. The Commission also unearthed several other cases of misconduct in the council including some in the fire brigade and the city market. The Mayor, Israel Somen, and his deputy, Dobbs Johnson, were cited for corrupt practices. The two survived the scandal and Somen was, after independence, appointed by Tel Aviv as the Israel ambassador to Kenya. The Rose Commission concluded that bribery and corruption were “by no means uncommon” among city office holders at ‘all levels and in all departments’; that the scale of cash inducements involved to secure services or preference from the council was often significant; and that such behavior was accepted as the norm and widely tolerated. So, it wasn’t just African home guards and chiefs who engaged in bribery and extortion in colonial Kenya.

Europeans were as guilty of corruption and malpractice in colonial Nairobi as anyone else, and Africans at the bottom of the colonial racial hierarchy were most often its victim. To stymie the growing trend of corruption in government, the LegCo (Legislative Council) enacted the Prevention of Corruption Act (Cap 65) in 1956, setting out jail terms for any public servant who solicited, accepted or obtained money unlawfully in exchange for service. It also provided for forfeiture of awards of gifts offered in a corrupt manner.” It was the Roe vs.Wade legislation as pertaining to fighting corruption in Kenya.

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On 12 December 1963, the Union Jack was lowered for the last time on Kenya soil, Kenya obtained ‘independence’ from the British. Under its first president, Jomo Kenyatta promulgated its first constitution which laid bare the hopes, dreams and promises of the Kenyan people. The government promised every part of the country will be controlled by the indigenous people of the area. Too, it promised it would eradicate poverty, disease and ignorance and also fight corruption.

However, that arrangement lasted for less than a year as Kenyatta abolished the region-based independence constitution in 1964 and introduced a unitary system of government which gave the presidency executive powers. Corruption took centre stage. An estimated 25,000 people were settled in the month of January 1964 alone. The pace in which the process was implemented implied there was no intention to vet and accord deserving cases their rights, but rather persons had already been predetermined or identified by the authorities.” The bottom line was: corruption was at play. One of the first things Kenyatta did after becoming Prime Minister, was to order a Rolls Royce car from the London’s Motor Show, for his use without any state budgetary provisions or (even) personal intent to pay. In doing so, Kenyatta became the first Kenyan official to violate procurement procedures which required that the Central Tender Board (CTB) call for multiple quotations from suppliers. It was a colonial process which did not change until the 1970s. Kenyatta also ignored the advice of Finance Minister James Gichuru who told him Kenya was short of capital and therefore bankrupt and could not afford the expensive vehicle.

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Having heard the complaints of senior officials in his administration about their inability to do private business because of government restrictions, Kenyatta 1 regime decided to do something. In 1971, Kenyatta appointed a body called the “Public Service Structure and Remuneration Commission” to recommend reforms in the public service on a system established by the colonial government. Known as the Ndegwa Commission, after its Chairman Duncan Ndegwa, the Commission recommended sweeping changes in moral and professional conduct of civil servants. It suggested increases in civil service salaries; the appointment of an ombudsman to oversee integrity in government; and slashing the number of parastatals. Furthermore, it permitted civil servants to engage in private businesses.

The Ndegwa report broke the colonial rule which was observed up to around 1970 that public workers should not engage in businesses. In the meantime, civil servants began immediately to engage in businesses. Soon, the civil service was submerged in corruption from top to bottom. Officers demanded bribes and sold tips and confidential government information to the highest bidders. Service delivery was impacted as many civil servants were often away tending to their private businesses. The Ndegwa allowed people to use their public offices to loot public resources with very little or no accountability.

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When Moi came to power many Kenyans hoped corruption would end. Because Kenya’s second president was a staunch Christian; and as a man with a strong rural upbringing, he was less entangled in the twisted urban lifestyles of intrigues, corruption, and conspiracy. He demonstrated that commitment by lashing at corruption and those involved in it wherever he went in the country, even as his family and cronies were amassing wealth. At one time, he showed up in Parliament to personally lead a debate on a legislation intended to deal with the menace. In 1982, Moi formed a working committee to draft a national code of conduct to deal with various issues including inequitable distribution of resources, misappropriation of public funds, and corruption. In announcing its formation, he accused some of his officials of greed and selfishness and promised tough action. He said his government would no longer tolerate graft and those caught would be punished severely. The working committee, chaired by a prominent businessman, B. M. Gecaga, submitted its report in October 1983, but that was the last time anyone heard of it. The whole charade appeared to be a public relations stint to hoodwink Kenyans into believing he was serious about corruption. It was a show of empty bravado.

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In 1993, the Government established the Police Anti-Corruption Squad in the police force to spearhead the fight against corruption in the Criminal Investigation Department. It was abandoned in 1995. The Prevention of Corruption Act (Cap 65) was amended in 1997 and would lead to the creation of the Kenya Anti-Corruption Authority (KACA), the first government anti-corruption organ established by law to fight corruption. The first Director of the Kenya Anti-Corruption Authority, John Harun Mwau, was appointed in December, 1997. KACA was disbanded in the year 2000 after it was declared unconstitutional by the High Court. This decision was on the basis, among others, that the powers of KACA to prosecute went against Section 26 of the then Constitution which had then preserved powers of prosecution on the Attorney General. After the disbandment of KACA, the Anti-Corruption Police Unit was formed as an administrative organ to continue the fight against corruption.

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In July 1998, Parliament appointed a Select Committee on anti-corruption under the Chairmanship of MP Musikari Kombo and gave it the mandate to study and investigate the causes, nature, extent and impact of corruption in Kenya; identify the key perpetrators and beneficiaries of corruption; recommend immediate and effective measures to be taken against such individuals involved in corruption, recover public property corruptly appropriated by them; and enact a Bill to provide stiff penalties for corruption related offences. The motion led to the enactment of the Anti Corruption and Economic Crimes Bill (2000) which established the Kenya Anti-Corruption Commission (KACC) with responsibilities to investigate corrupt cases and institute civil proceedings for recovery of corruptly obtained assets; and the formation of the Kenya anti-corruption advisory board to be responsible for appointing commissioners, and advise the commission on the performance of its functions. Nothing came out of those efforts until Moi handed over the government to Kibaki in December 2002.

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Kibaki’s victory in the 2002 general elections came as a big sigh of relief that four decades of KANU’s misrule had come to an end. Kenyans dreamed of a new beginning away from corruption, misadministration, and human injustices. Kibaki vowed to deal firmly with corruption which Moi had failed to clamp down. Kibaki said that corruption would cease to be a way of life in Kenya. Soon after being sworn-in, Kibaki moved to create institutions to deal with the challenge. He established the Kenya Anti-Corruption Commission (KACC) and appointed John Githongo as PS in his office to deal with matters of ethics in the public sector. Within a few months, he got Parliament to enact the public officer ethics legislation to compel all public servants to declare their wealth. The legislation tightened protocols to discourage favoritism, nepotism and administrative malpractices in government. From all initial indications, Kenyans were convinced Kibaki was the man to steer the country away from rampant sleaze which had dominated the two previous administrations. KACC was born out of the Anti-Corruption and Economic Crimes Act (ACECA) and the Public Officers Ethics Act of 2003 which became fully operational on 2 May 2003. The Act also established the Kenya Anti- Corruption Advisory Board (KACAB), a body which recommends to Parliament persons to be appointed as director and assistant directors, and advises the commission on the exercise of its powers and performance of its functions. However, while the anti-corruption push, led from the front by President Mwai Kibaki, started with a bang it faltered within eight months. Through a series of circulars, directives, committees, commissions and endless meetings, the fight against corruption was bureaucratised, effectively reduced to an annual laundry list by the anti-corruption authority of what they mostly hadn’t achieved, and the odd court appearance by suspects wearing broad smiles and expensive suits.

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In August 2010, a new constitution was promulgated in Kenya, which made far-reaching changes on governance, leadership, integrity in the anti-corruption regime. Article 79 of the Constitution required Parliament to enact legislation to establish an independent body to ensure compliance with and enforcement of Chapter Six of the Constitution. Pursuant to this Article, Parliament enacted the Ethics and Anti Corruption Commission Act, No. 22 of 2011 which came into effect on 5th September 2011. The Act amended the Anti-Corruption and Economic Crimes Act (ACECA) by repealing the provisions establishing Kenya Anti Corruption Commission and its Advisory Board, while retaining all other provisions relating to corruption offences and economic crimes, their investigation and prosecution.

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After billions of dollars have been spent in the war on graft, today, corruption is undergoing a moral and political paralysis. Largely due to the politicization of corruption by the Kenyan political class in their battles for 2022, and more fundamentally because the standard post-colonial logic that “all would be fine” if it were not for the corruption of some persons and their ability to mobilise their own ethnic groups in pursuit of the public purse has been falsified. The political vernacular of corruption has lost its luster, especially with the millennial generation, who today perceive corruption not as the abuse of public office for private gain but the abuse itself lays in the existence of the public office. Indeed, the very idea and roots of the Kenyan state is that of “corruption” and of the continuous abuse of its citizens.

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The author is an analyst based in Nairobi, Kenya.

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Kenyan Budget Allocation in the Sector of Agriculture for the FY 2020/2021

For households which are going to be devastated by these economic realities, the government of Kenya needs to put in place adequate safety nets to assure food security and support food producers.

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JULIET ATELLAH - Kenyan Budget Allocation in the Sector of Agriculture for the FY 2020/2021
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One of the important responses and mitigation tools for proper planning and resource allocation during a time of crisis is a budget. Kenya has experienced infestation of desert locusts, floods as well as the rise in confirmed COVID19 cases. Following the government-imposed restrictions to reduce the spread of the coronavirus, the country is currently not only undergoing a health crisis but also economic crisis.

On 11th June 2020, the Cabinet Secretary for the National Treasury and Planning Ukur Yatani tabled a Ksh. 2.7 Trillion budget for the financial year 2020/2021 starting 1st July 2020. This comes against the backdrop of multiple the crises the country is undergoing.

One of the big four agenda of the government is to enhance food security for Kenyans. Under the sector of Agriculture and food security, the government has allocated Ksh. 8 billion to projects such as Kenya Climate Smart Agricultural Project, National Agricultural and Rural Inclusivity Project, Kenya Cereal Enhancement Programme, irrigation and land reclamation among others.

Additional allocation made by the government in the Agriculture and Food sector include: Ksh 3 billion to subsidize the supply of farm inputs to reach 200,000 small scale farmers through the e-voucher system; Ksh 3.4 billion for expanded community household irrigation to cushion farmers from the adverse effects of weather and further secure food supply chains; Ksh 1.5 billion to assist flower and horticultural farmers access international markets; Ksh 1.8 billion to enhance aquaculture business development projects; Ksh 1.4 billion to support small-scale irrigation and value addition; Ksh 1.3 billion to enhance resilience of pastoral communities; Ksh 1.1 billion to enhance drought resilience and sustainable livelihood; Ksh 1.6 billion to support processing and registration of title deeds; and Ksh 500 million to advance agricultural loans through the Agricultural Finance Corporation.

The budget allocation for the Agriculture and Food sector is an increase of 21 percent from Ksh 50.1 billion allocated in the 2019/2020 financial year to Ksh 60.7 billion allocated in 2020/2021.

As compared to the previous financial year 2019/2020, the government had allocated the funds to the following Agricultural sectors: Ksh 1.0 billion for crop diversification and to revitalize the Miraa industry; Ksh 0.8 billion for the rehabilitation of Fish Landing Sites; Ksh 0.7 billion for small-holder dairy commercialization. Ksh 7.9 billion for ongoing irrigation projects. Ksh 2.0 billion for the National Value Chain Support Programme ; Ksh 3.0 billion for setting up the Coffee Cherry Revolving Fund which was aimed at implementing prioritized reforms in the coffee sub-sector and Ksh 0.7 billion to pay outstanding debts to sugar farmers for cane deliveries to public mills. 2nd July 2020, Agriculture Cabinet Secretary Peter Munya announced sugar reforms and government directives on the importation of sugar and cane trading license. Other reforms include leasing of state-owned sugar mills to private investors for a period of 20 days to process and develop cane on farms such as Muhoroni, Chemelil, Sony, Nzoia and Miwani owned by the millers.

Programme based budget for FY 2020/2021, the State Department for Crop Development and Agricultural Research which is a merger of the former State Department for Crop Development and State Department for Agricultural Research, tabled a total expenditure for the FY 2020/2021 Ksh. 40.1 billion. The department is mandated to ensure sustainable development of agriculture for food and nutritional security and socioeconomic development. Improve the livelihoods of Kenyans by ensuring food and nutrition security through creation of an enabling environment, increased crop production, research and development, market access and sustainable natural resource management.

Kenyan Budget Allocation in the Sector of Agriculture for the FY 2020/2021

Kenyan Budget Allocation in the Sector of Agriculture for the FY 2020/2021

The report states that, “ Other key outputs to be delivered will include: subsidy of 582,500 metric tonnes (MT) of fertilizer; procurement and distribution of 750 tractors to farmers; identification, testing and up-scaling of 30 appropriate technologies by the Agricultural Technology Development Centres; increased maize productivity from 40 million bags to 67 million bags through expansion of acreage under maize production; increased ware potato productivity from 1.2 million MT to 1.6 million MT through increased certified seed production and distribution; increased rice productivity from 112,800 MT per acre to 271,000 MT through increased area under cultivation and subsidized mechanization, use of certified seeds and water saving technologies.”

With the comprehensive reforms under the department of Agriculture, the programme based budget further adds, ” The State Department will also ensure increased cotton production from 40,000 MT to 100,000 MT; increased tea production from 1.1 million MT to 1.6 million MT; annual sugarcane production from 4.8 million MT to 8.5 million MT and increased pyrethrum production from 300 MT to 3,000 MT by 2022.”

According to the KNBS economic survey 2020, the real Gross Domestic Product (GDP) is estimated to have expanded by 5.4 per cent in 2019 compared to a growth of 6.3 per cent in 2018. The growth was spread across all sectors of the economy but was more pronounced in service-oriented sectors. The Agriculture, Forestry and Fishing sector accounted for a sizable proportion of the slowdown, from 6.0 percent growth in 2018 to 3.6 per cent in 2019.

Last year, the country experienced a mixed weather phenomenon. This was characterized by drought during the first half of the year, followed by high rainfall in the second half of the year. This culminated in reduced production of selected crops and pasture for livestock.

According to Timothy Njagi Njeru and Milton Were Ayieko from Tegemeo Institute of Agricultural Policy and Development, Egerton University on COVID-19 on Kenya’s food security, a key challenge for the country is to raise productivity in the agriculture sector. This would not only ensure food availability, but potentially lift households out of poverty. For the government to attain this, it must reduce reliance on rainfed agriculture systems, use modern varieties and technologies by enhancing investments in extension systems, build resilience of farmers against the effects of climate change and variability, and improve agricultural market systems and infrastructure. The 2019 population census states that, total agricultural land operated by households stood at 10.3 million hectares, equivalent to 17.5 per cent of the total land area in the country. Of the total enumerated households, 6.4 million were practicing agriculture. Households growing crops were 5.6 million while those practicing irrigation were 369,679. In total, 5.1 million households were engaged in maize cultivation followed by 3.6 million cultivating beans. Livestock keeping was practiced by 4.7 million households while aquaculture and fishing activities were practiced by 29,325 and 109,640 households, respectively.

With the current Covid-19 pandemic situation, nationally, 30.5 per cent of households were unable to pay rent on the agreed date with the landlord. 52.9 per cent stated their main reason unable to pay rent is due to reduced income/earnings. For households, which are going to be devastated by these economic realities, the government of Kenya needs to put in place adequate safety nets to assure food security and support food producers.

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Follow the Money: Is There a Role for Cash Transfers in Climate Change Adaptation?

While Cash transfers are considered a better way to reach the poor who are in dire need during environmental shocks or as climate change creates ever-harsher conditions funds can still be diverted and embezzled all along the entire cash transfer chain, and the scale and speed of these programmes will intensify the corruption risks involved.

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Follow the Money: Is There a Role for Cash Transfers in Climate Change Adaptation?
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Climate change is significantly affecting everyone but those who are suffering the most are people already in vulnerable situations. In Turkana County – one of the largest counties in the northern part of Kenya – recurring natural disasters, prolonged droughts and excess floods have lead to loss of lives, livelihood and left many people subject to extreme poverty. These harsh climatic challenges have left Turkana residents, a population of 926,976, to not only rely solemnly on frequent supply of relief food but has also disrupted their rich culture and nomadic way of life.

According to a 2015 Human right’s watch report, “climate change has been one of the many factors that contributes to the lack of access to clean water and food to the residents of Turkana. The county’s minimum and maximum air temperatures have increased by 2°C and 3°C, and the rainfall patterns have also changed”, the report adds.

“During prolonged droughts women and children trek for distances in the hot sunny weather in search of the scarce food and water in the dry riverbeds. Families are unable to provide sufficient food and clean water. Most children are malnourished and hunger stricken. Due to competition on grazing lands and water, there is likelihood of an increase in conflict and insecurity,” the report futher states.

A combination with existing political, environmental and economic development challenges in Turkana has had an impact on the Turkana people’s ability to access food, water, health and security.

A proposed solution: cash transfers

In 2013, the government of Kenya through Vision 2030 on the sector for risk drought management declared ending drought emergencies by 2022 through establishment of a government social protection programme called National Safety Net Programme (NSNP) as part of the government’s initiatives to improve and enhance social protection delivery in the country.

NSNP was established to provide a common operating framework for the government’s four Cash Transfer programmes including, Persons With Severe Disabilities Cash Transfer, Older Persons Cash Transfer, Cash Transfer for Orphans and Vulnerable Children Cash (CT- OVC) and the Hunger Safety Net Cash Transfer. Except for Hunger safety Net Cash transfer, the rest are run under the Ministry of Labour and Social protection.

Hunger Safety Net Programme (HSNP) operates under the Ministry of Devolution and Planning, managed by the National Drought Management Authority (NDMA) a state agency, mandated to exercise overall coordination of all matters relating to drought risk management and to establish mechanisms, either on its own or with stakeholders, that will end drought emergencies in Kenya.

During the HSNP launch in 2008, the people of northern Kenya were gald and ready to embrace the programme as they believed it has the potential to improve the lives of the most vulnerable in Northern Kenya.

The program funding

The government of Kenya, with the aid of international donors such as UKAid from the DFID (Department for International Development) partnered with FSD Kenya (Financial Sector Deepening), to cash transfer payments to the people of Wajir, Turkana, Marsabit and Mandera.

FSD Kenya was a specialist development programme originally established by the UK government’s Department for International Development (DFID) to provide a continuing mechanism through which donor agencies in Kenya could pool their efforts to support the development of inclusive financial markets. In addition to DFID, it was funded by the Swedish International Development Agency (SIDA), World Bank, Agence Francaise de Development (AFD) and the Gates Foundation. Because of its local expertise and experience in financial service development, FSD Kenya was tasked by DFID to take responsibility for developing a solution to the payments element of HSNP. FSD undertook a long process of market preparation before issuing an open call for tenders to provide payments services. In April 2008, Equity Bank of Kenya was selected by FSD bid panel to provide the payments.

How money transfers are trying to reduce poverty.

How money transfers are trying to reduce poverty.

The programme has been implemented in two phases. Phase 1, starting with a pilot from 2008-2012, funded by DFID & Australian Department for Foreign Affairs and Trade (DFAT). Phase two (HSNP2) of the programme started in 2013 – 2018, funded by the Governments of Kenya and the United Kingdom with a two-year extension in readiness for the third phase in 2020.

The cash transfer programme operates in two groups. Group one are households that regularly receive cash transfers and group two are households that receive emergency cash transfers from HSNP during drought.

Turkana is one of the counties that benefit from the programme. A total of 137,534 households have been registered out of this, 39,918 are households targeted to receive routine HSNP payments.

How it works

“On a particular payroll that contains the name of the beneficiary, identity card, Equity Bank of Kenya account number and the amount, there are instances where funds are co-funded by the Government of Kenya or DFID or both,” opines Peter Thirikwa, the Management Information Systems Specialist under the Hunger Safety Net Programme.

“For the DFID Funds, the money would flow through FSD where NDMA will then direct FSD the amount of money for the particular payroll. FSD would then credit the Equity bank of Kenya which is the service provider that opened the accounts for the beneficiries and then Equity bank would move the funds from the holding account to the individual accounts through the Equity Agents (Dukas),” he further notes.

Every financial year, “NDMA sets a budget for HSNP through the ministry of Devolution and Planning, and the funds will flow from the treasury into an NDMA account sitting at the NIC bank. As an authority, NDMA is regulated to open a bank account where money flows from treasury to the operations account as per the mandate of the authority,” he notes further.

“Then NDMA instructs NIC bank to transfer the money to an Equity account through the central bank. Equity is then instructed by NDMA to pay the beneficiaries according to the payroll, which is done through agents in the communities. Equity Bank of Kenya pays the payroll according to the instructions given by NDMA, credits all the households as per the payroll, totalling to the same value that was transferred to the central bank,” Peter concludes.

Delays and distribution issues

The HSNP originally provided Ksh 2,150 to each beneficiary household (or individual in the case of the social pension) every two months then later to Ksh 2,700 every month. Beneficiaries are given a Smartcard and to access the funds they have to use their biometric information, fingerprints in order to collect cash at any time from a range of pay points mainly small shops called Dukas across the four counties.

As of 23rd July 2014, the first year the government was in charge of the program, out of 100,000 target households for group 1 (the routine payments) 90 percent of accounts were opened, 78 percent were active and 77 percent were being paid. An annual report from 2020 said “over the 12 years, HSNP reached nearly 100,000 households (600,000 people, 60 percent of whom were women). Accordingly, group 1 households received regular payments, increasing from Ksh 1,050 every two months under Phase 1 to KES 5,400 under Phase 2.”

However, a team of journalists working with the Elephant visited several villages in Turkana County in November last year and found that though many people said they had been given cards some have never received cash and they didn’t know when to expect them.

The 2018 Auditors general report states that NDMA could not provide bank statements relating to funds transferred to the beneficiaries under HSNP. As a result, the auditor’s could not confirm the balance of Ksh. 2,119,239,700 and Ksh. 2,744,213,700 reflected in the financial statements relating to the government of Kenya and donor funding respectively.

How cash transfer works under HSNP with Kenya

How cash transfer works under HSNP with Kenya

Further, HSNP’s Government of Kenya and Donor programme expenditure of Ksh. 5,049,328,332 that comprised payments to various beneficiaries did not have a document to support the basis of how the various beneficiaries were identified, and the basis of the rates used for paying the beneficiaries was not supported either.

The then Auditor General Edward Ouko told the Elephant that he could only conclude that the funds were unaccounted for as he was only provided with the documentation he referenced in the audit report.

Is it enough?

Even if the money were paid on time in every case, that doesn’t mean it’s always adequate for people living in the regions affected by severe droughts, floods, or locusts. According to a 2017 Report on the cost of diet analysis in Turkana county, the current cash transfer of Ksh 2,700 for very poor and poor households is not enough.

“Current cash income and available livestock products are not sufficient for a family to access a nutritious diet. Avenues should be explored to allow households to increase their means to access nutritious foods, such as food for work or vouchers,” the report says.

The report suggests that increasing the cash transfer for these groups to Ksh 10,000 a month would increase affordability, but would not be sufficient in closing the affordability gap. Poor infrastructure in Turkana is a barrier to gaining physical access to the foods, that there is sufficient diversity of foods in the region.

However, the frequency with which these foods are available to households and the quantity with which these can be found in the markets is likely to be an obstacle to achieving a nutritious diet. The report adds that better roads will also allow for more efficient transportation of fresh produce and, possibly, decrease the extent of food degradation and nutrient depletion due to heat and travel conditions.

The cash transfer program is intended to continue running for at least another four years. But while these transfer payments can help those in dire need during environmental shocks or as climate change creates ever harsher conditions, experts and reports argue this is just one small part of a larger need for an effective long-term solution.

This article was developed with support from the Money Trail Project

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Things Are Elephant: The Effect of COVID-19 in Nairobi Low-Income Areas

The full extent of the impact of the coronavirus crisis in Nairobi low-income areas is yet to be seen but as Juliet Atellah analyses, it will be important to track.

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At least 30 percent of low-income earners have lost their jobs since the Government of Kenya placed restrictions to curb the spread of COVID-19 reveals a recently published report.

The report, titled Survey on the Covid-19 Global Pandemic in Nairobi’s low income Areas conducted by Trends and Insights for Africa (TIFA), a local research firm, found that at least 60 percent of those who have suffered loss of daily earnings claim that the restrictions should be lifted so that people can resume their normal economic activities even if this means the virus continues to spread. This is against a backdrop of increased desperation in many of these low-income neigbourhoods, which has strained resources in a least 75 percent of households, the report notes.

Social institutions and movement have not been spared either by the lockdown. According to the report, at least 66 percent of the respondents have been affected by the ban on travel into and out of the metropolitan and the imposition of the 1900 hrs to 0500 hrs curfew. James Mogaka, a resident of Kawangware told the Elephant that he has been unable to travel to his home county of Kisii to spend time with his family. He has not seen them since the regulations were enforced. As is the plight of Mogaka and many others, the report highlights that 57 percent of low-income earners are very worried on the continuation of the Nairobi travel ban and curfew and they advocate for the restrictions to be lifted so people can resume their normal activities.

Things Are Elephant: The Effect of COVID-19 in Nairobi Low-Income Areas
Increase in crime has been the major reason why over 80 percent of respondents are keen that the curfew and travel restrictions be lifted and economic activities continue. They are concerned about the future levels of crime due to the economic implications of the lockdown. When asked to corroborate this, Eunice Mwaniki, a resident of Huruma and mother of two, told The Elephant that she closes her vegetable business at 1600 hrs everyday because once dusk approaches, gangs of young men troll the streets pickpocketing and mugging citizens of their hard earned money. She emphasised that the last time she witnessed this kind of theft and daylight robbery was during the grim days of the Nyayo era when Nairobi was infamously christened “Nairobbery”

A majority of denizens are pessimistic that things will change and even bigger majorities are “very worried” about contracting the COVID-19 virus with the constant rise in the number of cases and deaths. Indeed, how such perceptions will change as the full extent of the impact of the virus crisis will be important to track moving forward, given the impact of such perceptions on actual behaviour, both related to the disease and the conditions of life more generally.

On 6th June 2020, a clear majority of respondents had hoped that the President would announce an end to both the travel ban and night curfew but what followed was only a reduction of the curfew period and a hinted policy posture to open up the country. As the country gets closer to 6th July 2020, the day the lockdown will likely be lifted; it is yet to be perceived what direction the government will take. What is clear, however, is that Kenyans are eagerly expecting a policy shift that will make their lives better.

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