Role of the Private Sector in the Economy

The private sector in Kenya plays a fundamental role in the economy. The sector contributes about 80[1] per cent of Gross Domestic Product (GDP), provides 70 per cent of total employment and is a key source of the country’s export (World Bank, 2019). Cognizant of the critical role that the sector plays, the Government continually endeavors to provide an enabling environment for the private sector to thrive by addressing the constraints that hinder their growth and development.

Besides providing an enabling environment for the private sector to thrive, the Government is also a consumer of goods and services provided by the private sector, including Small and Micro Enterprises (SMEs), and firms owned by women, youth and Persons with Disabilities (PWDs). From the 2018 World Bank Enterprise Survey for Kenya, 19 per cent of the firms surveyed in the private sector had government contracts for provision of goods and services. The survey further shows that most firms that secured government contracts were small firms at 40 per cent, followed by medium firms at 35 per cent, and large firms at 25 per cent, and that about 9 per cent of the firms with Government contracts received the contracts under affirmative platforms.

In recognition of the importance of Micro, Small and Medium Enterprises (MSMEs) to the economy across the world, the United Nations General Assembly on 6th April 2017 designated 27th June as the international day to celebrate and create awareness on this segment of the enterprises. The World marks the 4th international MSMEs day on 27th June 2020. Among the resolutions adopted by the UN General Assembly include measures such as sharing of research findings and policy discussions on MSMEs. This day therefore provides Kenya with an opportunity to reflect on this important sector of the economy.

Persons with Disabilities (PWDs) face various barriers in their day to day life. The barriers could be defined as any factor which includes communications, attitudes, infrastructural and administrative factors that subjects PWDs to lives of unjustifiable dependency, segregation, isolation and exclusion in a society. Longtree (2010) notes two schools of thought that drive the responses in addressing the barriers that confront PWDs. The first one, the Old paradigm, also called the Medical Model, is characterized by fixing the individual as defective and focuses on life rehabilitation programmes. The second one, referred to as the New paradigm, or the Social model, considers disability as a part of human experience that requires removing the barriers that hinder PWDs from participating in society. A survey on PWDs conducted in 2008 by the Kenya National Survey for Persons with Disabilities suggested that 12 per cent of PWDs in Kenya face difficulties in accomplishing their daily activities due to mobility restriction. The figure is higher in rural areas at 14 per cent compared to urban areas at 8 per cent.

The quest for good governance is, and as it were, from ancient times, the fulcrum of constitutional reforms. Countries south of the Sahara have witnessed various constitutional dispensations after the fall of colonialism. Three phases define the reforms hitherto; reforms at independence under the stewardship of the colonial power as a decolonization process and immediately after to abrogate the Westminster model that made the Queen of England a titular head of state of former British colonies, and the Gaullist constitutional 1958 French model adopted majorly by the French, Spain and Portuguese colonies in  Africa; the post-independence amendments concentrating power in the presidency and  ushering autocratic era characterized by human rights abuses; and lastly, the current phase which emanated from the wave of change calling for a system of governance anchored on democracy and the rule of law. The rallying call in all these epochs has been the genuine desire to have a framework of dealing with constitutional errors of the colonial past and the post-independence dictatorial and undemocratic regimes.

The Corona Pandemic (COVID 19) has continued to ground the social and economic activities of billions of people all over the world. The effects of the pandemic has shocked the interconnected global economy and is much worse compared to the past global crisis, including the financial crisis. According to the World Economic Forum, the global manufacturing capability has significantly decreased as countries battle down the pandemic. As scientists rush to develop a vaccine for the pandemic, countries are locking down their population as they try to flatten their curves for the deaths and new infections. As of today (14th April 2020), more than 120,000 lives have been lost, and more than 1.9 million confirmed cases are being handled in more than 200 countries. The first case was reported in December 2019 in Wuhan Province of China.

Repositioning Kenya Airways on its Feet Fast

 Turbulent times for Africa’s sixth-largest airline, Kenya Airways (KQ) seem far from over. The financial difficulty being experienced by KQ has become even more apparent with the latest profit warning of earnings for the year 2019 when compared to 2018. The airline declared its anticipation of a net loss in excess of Ksh 7.5 billion posted in 2018. Consequently, KQ stock plummeted to a new low of Ksh 2.10 ($0.02) and recorded a -76.97% decline over 2019. KQ financial performance continues to be volatile, with the impact of increasing competition from regional carriers such as Ethiopian and Rwandan airlines, and Middle East carriers such as Emirates, Etihad and Qatar airlines compounding its financial woes.

KQ is operating in a highly competitive environment and has reported a declining dominance in the African skies while the competitors in the region, particularly Ethiopian Airlines and Gulf Airlines are realizing increasing footprint. Ethiopian Airline has over the years reported a gradual growth, currently flying to 153 destinations and operating a fleet of 100 aircrafts while KQ flies to 53 destinations and operating a fleet of 59 aircrafts. This means that the KQ total freight is an eighth of Ethiopian Airline, reflecting the high dominance of Ethiopian Airline relative to KQ. Given the significance of KQ to the Kenyan economy, it requires restructuring towards a growth trajectory, and thus the proposed integrated model that entails delisting, nationalization of KQ and formation of a national aviation holding company is urgent.

Revenue Sharing Stalemate between National Government and County Governments

Background

The Constitution of Kenya 2010 introduced a two-tier level of government: i.e. The National government and the County governments. The devolved system of government is the cornerstone of the Constitution and its implementation brought a major policy shift on how resources are shared in the country. The Constitution has outlined policies and guidelines on how resources are shared between these levels of government. Despite well formulated guidelines on revenue sharing between the two tiers of government, there has been delays agreeing on the amount to be allocated to the two levels of government, as witnessed in August 2019. There is also concern on delays in disbursement of funds to the devolved units by the National Treasury. Given that the total county revenue basket disbursements by the National Treasury make up a big chunk (over 70%) of the  county financing requirements, delays in disbursement by the National Treasury adversely affects the day to day running of county activities to the extent that there is delayed payment of county staff, suppliers, and implementation of county work plans, programmes and development projects. This therefore affects county services such as health care and other services offered to the counties.

 

Ending Poverty for Youth Persons with Disabilities in Kenya

There is no accurate data on the number of young people with disabilities under extreme poverty in Kenya. However, evidence shows that youth with disabilities are the most marginalized and poor in the world. The United Nations estimates that there are about 180 and 220 million youth with disabilities world-wide, with approximately 80 per cent living in developing countries. Further, global data from the World Health Survey, according to World Bank 2011, indicates that employment rates are lower for men with disabilities (53%) and women with disabilities (20%) compared to men without disabilities (65%) and women (30%). Disability increases vulnerability of the youth to poverty while poverty increases vulnerability to disability. However, there is a strong intersection between disability and poverty, which leads to dynamic and multifaceted phenomenon that is difficult to measure. According to Sophie Mitra (2011), the onset of disability may lead to lower living standards and poverty through adverse impact on education, employment, earnings, and increased expenditures related to disability. This leads to persons with disabilities and households with a person with disability experiencing higher rates of insufficiencies, which include food insecurity, poor housing, lack of access to safe water and sanitation, and inadequate access to health care and fewer assets compared to persons without disability. In the wake of global economic integration and development, to achieve the long-lasting prospects envisioned in the Sustainable Development Goals and beyond, there is need to have inclusion of persons with disability in economic activities that sustainably contribute to economic development.

 

 

Today, 6th February 2020, we celebrate the international day of Zero Tolerance for Female Genital Mutilation (FGM).

Female Genital Mutilation/ Circumcision or Cutting (FGM/C) comprises of all procedures that involve partial or total removal of the external female genitalia or injury to the female genital organs such as the clitoris, prepuce or labia minora. Those who refer to the practice as Female Genital Mutilation (FGM) tend to lay emphasis on its severity with a focus on the adverse effect it has on girls and women, while those who use Female Genital Cut or Circumcision (FGC) stress on the need to use a non-judgmental terminology, especially when interacting with communities that attach value and nobility to the practice. It is classified into four major types namely: clitoridectomy[1]; excision[2]; infibulation[3] and other harmful procedures to the female genitalia for non-medical purposes.

Kenya Exports Oil for the First Time: What Can We Learn from Other Countries?

Oil Exploration and Production Journey

Kenya exported 200,000 barrels of crude oil to ChemChina, a Chinese company, at a cost of Ksh 12 billion in August 2019. This marked yet another milestone regarding Kenya’s oil exploration and production journey which begun in the 1950s. The first milestone in this journey was made in 2012 with the discovery of commercially viable oil deposits in the Tertiary Rift basin in Turkana. The discovery was made by Tullow, a British Oil Company. Since this discovery, the oil company has dug about 86 wells within four oil basins namely: Lamu, Tertiary Rift, Mandera, and Anza. Tullow oil considers the Tertiary Rift as the most promising among the four basins. The company estimates that Lokichar sub-basin within the Tertiary Rift has about 4 billion barrels of crude oil.

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