OPINION ARTICLE
BY ELIUD OWALO

A key factor that has constrained many Africa countries including Kenya into global economy is the continent’s small markets, which do not permit the realization of economies of scale. Regional integration allows a country to effectively utilize its comparative advantage in a wider market to maximize on its economic its potential, diversify production lines, reverse de-industrialization and marginalization and improve the living standards of the populace. Regional integration occurs whenever a group of nations in the same region, preferably of relatively equal size and at equal stages of development, join together to form an economic union by raising a common tariff wall against the products of non-member countries, while freeing internal trade, among member countries.

Integration may take various forms with the first and the lowest being Preferential Trade Area where countries lower barriers on trade among participating nations than on trade with non-member nations. The second form is Free Trade Area wherein all barriers on trade are removed among members but each nation retains its own barriers to trade with non-members. Third is Customs Union which allows no tariffs or other barriers on trade among members and in addition harmonizes trade policies such as including the setting of common external tariff towards the rest of the world. Examples include the East African Community (EAC) and European Union (EU). Fourth is Common Market which goes beyond a Customs Union by also allowing the free movement of labor and capital among member states. The European Union achieved the status of a common market early in 1993. Fifth is the Economic Union which goes beyond the common market by harmonizing and unifying the monetary and fiscal policies of member states. An example is Benelux, which is the economic Union of Belgium, Netherlands and Luxembourg formed after World War (WW) II (and now part of European Union). An example of a complete economic and monetary union is the United States of America.

The EAC with a single unified market with over 120 million consumers should be viewed as a catalyst for the economic growth, allowing for record levels of trade, economic cooperation and development. A Monetary Union (MU) Protocol was signed by the Community in 2013 outlining a ten‐year road map towards monetary union with the East African Shilling as the new currency. Finally, the ultimate goal of the EAC, beyond trade liberalization and economic unity, is to pursue full political federation intended to be anchored on establishing regional structures and building institutions to foster international relations and strategic interventions. Kenya needs to fast tract the implementation of EAC given the various benefits including trade creation due to specialization based on comparative advantage; administration saving resulting from the elimination of border policing; enhanced bargaining power of member states like in the case of European union with Africa countries; enhanced competition resulting in efficiency in production and improved quality of the products; and attainment of economies of scale due to enlarged market.

Similarly, integration will stimulate investment by taking advantage of the enlarged market and meeting the increased competition which spurs foreign firms to set up production facilities to avoid the discriminatory trade barriers imposed on non-union products. Another benefit is collaborative infrastructure development with expected induced backward and forward linkages and promotion of a framework for countries to cooperate in developing common infrastructure such as financial services, transport and communications, and mechanisms for joint exploitation of natural resources. Integration also provides a growth’ opportunity for industries that have not yet been established as well as those that can take advantage of the large-scale production made possible by expanded markets. Finally, integration provides the possibility of coordinated industrial planning, especially for those industries where economies of scale are likely to exist. This enables all member states to accelerate their rates of industrial growth by assigning given industries to different members thereby taking the partners much closer to full economic and, eventually political union.

One of the EAC advantages is its strategic location that will facilitate mobility of products, people and capital with Kenya being a leading beneficiary. For example to reach Lagos, the distance is slightly over 2,300 miles from Nairobi, compared to 2,800 miles from Johannesburg. Similarly, it is over 5,400 miles by air from Johannesburg to Paris, while the distance is about 4,032 from Nairobi. Also, the distance between Johannesburg and Dubai is about 4,000miles and about 2,200miles from Nairobi to Dubai. With improved regional infrastructure, Kenya is expected to reap the benefits of reduced travel-times. Another benefit is the high demand for tourism in the region including the ‘Big Five’ game and the region’s wildlife diversity and the favorable climate. These clearly demonstrate that with integration more jobs are assured for the residents and hence economic growth and the accompanying ripple effects.

Although EAC has been consistently working to achieve its stated aims of greater economic integration and cooperation, there however remain significant issues to overcome. These include poor infrastructure, widespread corruption, low levels of education and underdeveloped healthcare systems, political instability and security, costs of doing business in the EAC, and political squabbles. Other issues relate to sovereignty of the country, the incompatible political and economic statuses and beliefs coupled with the political appointments with minimal experience in regional integration; fear of losing property such as land; and national politics taking center stage thereby overshadowing the regional agenda.

We can therefore impute from a trade perspective that, although Kenya is considered a small nation, it can overcome the smallness of its domestic market and achieve substantial economies of scale in production by exploiting opportunities that exist in the rest of the world. In the process this is expected to have both micro and macro benefits including large market, reduction in costs of doing business, employment opportunities, improved welfare of the residents, and acquisition of economies of scale, among others. Thus, member states need to view integration as a mechanism to encourage economic growth and development, improved standards of living of the people and not a mechanism for political milestones.

In the absence of integration, each separate country may not provide a sufficiently large domestic market to enable local industries to lower their production costs through economies of scale or realize optimal capacity operational levels. The EAC should learn several lessons from those of advanced integrations such as EU. Key to this includes impressive infrastructure network and the prioritization of infrastructure improvements to spur growth and development. Additionally, the EAC should strive to achieve the same kind of economic diversification that has allowed the EC countries to prosper, and reduce over-reliance on the volatile agriculture sector to enhance intra-trade. Although an analysis of the current EAC Strategic Plan shows that the leadership has set out an impressive and visionary agenda, this does not necessarily translate into economic development or regional integration. Hard work and tough choices must be made by each of the EAC member states, or else the integration processes will sputter and die out, like it happened in 1977.The EAC must responsibly pursue regional and economic integration to enable the region become a world-renown economic power base.

The Writer is a Management Consultant

OPINION ARTICLE
BY ELIUD OWALO

Article 174 of the Constitution of Kenya 2010 spells out the objectives of devolution of government, most of which revolve around facilitating equitable economic development across all regions of the Republic. Indeed the section appropriately provides for ensuring that citizens are involved in development processes and programmes. For example, 174 (d) provides for “recognizing the right of communities to manage their own affairs and to further their development”; while 174 (e) espouses “protecting and promoting the interests and rights of minorities and marginalized communities; and 174 (f) advocates for “promoting social and economic development and the provision of proximate, easily accessible services throughout Kenya”.

In sum, the provisions of Article 174 acknowledge the criticality of involving all citizens in national planning and development, so that all persons – irrespective of their social status, region of habitation, population size of their community or any other unique characteristic of a specific group – are included in the development continuum.

Why do I consider this perspective critical? First, the global 2030 Agenda for Sustainable Development, upon which the seventeen Sustainable Development Goals (SDGs) are anchored, is bed-rocked on various principles, one of them being “inclusivity” and which has been given a rather instructive tag “leaving no one behind”. I contend here that the tag is really self-explanatory. That the development foreseen in the SDGs, and particularly SDG number 1 which deals with poverty eradication should broadly focus on uplifting each and every citizen – so that income and poverty gaps are minimized. From the global spectrum, it is about reducing poverty within and among countries. However, herein lies the big development question – how do we actualise this given the ever-evolving world geo-politics, which to a large extent explain the perennially lukewarm support given to Least Developed Countries (LDCs), particularly those who have been in conflict situations for long periods with devastating effects on living standards and human rights.

Unfortunately, that development conundrum is not only complex at global level, but is equally challenging to individual countries. In Kenya, and in light of the Constitutional obligations highlighted above, both the National and County Governments have critical roles to play. And this needs to be seen in different contexts. First, the gap between the rich and the poor has been wide and needs to be addressed through short, medium and long-term interventions. Second, there are significant differences in socio-economic development levels of the forty seven counties of the Republic. Third, and rarely considered in development planning, is that there are significant differences in development in the localities or wards that form our counties. Fourth, are the inequalities in incomes and opportunities that exist between men and women. Fifth, are the inequalities of incomes and life support opportunities across various age clusters such as the youth, middle-aged and elderly populations. And the list of factors that cause some people to be left behind in development can go on and on.

According to the latest Kenyan National Demographic and Health Survey, nationally, about 45.2 percent of the population live below the poverty line, surviving on less than Ksh. 1,562 and Ksh. 2,913 per adult equivalent per month for rural and urban households respectively. The incidence of poverty is higher in the northern and coastal parts of the country but significantly lower in others.At county level, there are also significant inequalities in poverty. For instance, the proportion of individuals living  below the poverty line in Turkana (87.5 percent), Mandera (85.8 percent) and Wajir (84.2 percent) is four times that of Nairobi, which has the lowest poverty level at 21.8 percent, and almost double that of Laikipia (47.9 percent), the median county.

With regard to inequality as measured by Gini coefficient, the aforementioned Survey indicated that national ratio was around 0.445, reflecting a high level of inequality. The lower the Gini coefficient the better in terms of equality, so that a Gini coefficient of zero means best equitable situation and 1 highly inequitable. One of the contributing factors to Kenya’s high inequality is the income gaps between rural and urban areas. Why? – because the rural areas have perennially been left behind by policies and development blueprints that have continuously favoured urban areas. For example, household expenditure in Kenya averages about Ksh 3,440 per adult equivalent per month, but is Ksh. 2,270 in rural areas and Ksh. 6,010 in urban areas.

A peep at inequality within counties themselves demonstrates that the challenge of some people being left behind trickles down to the grassroot communities and villages. For example, Tana River, Kwale and Kilifi Counties have the highest income inequalities with Gini coefficients of 0.617, 0.597 and 0.565 respectively. Comparatively, the counties with lowest income inequality include Turkana, Narok, and West Pokot with Gini coefficients of 0.283, 0.315, and 0.318, respectively. Interestingly, this data shows that high poverty is not equivalent to high inequality, as the most equal counties, such as Turkana, are also among the poorest. The implication is that the people left behind in the very poor counties must be living in extremely dire situations.

Within the provisions of the Constitution, we have seen efforts by the National and County Governments to involve key stakeholders in policy making and budgeting processes. This is a welcome move, but the scope and effectiveness of such involvement is still not comprehensive. For example, the public hearings for the budget which are organised by the National Government take about four days and are mainly attended by organised non-state actors, who have some formal mechanisms of analysing the budget. However, the extent to which views of ordinary citizens from the expanse corners of the Republic remains restricted. Equally, we have seen County Governments organise public meetings at Ward level to gather inputs for their respective budgets. Again, there is the question of how many County residents are reached. Furthermore, what is the ability of Wanjiku in terms of understanding complex technical issues of budget making – yet all she wants is to have her local project incorporated in the budget?.

In common mwananchi parlance, inclusion of Wanjiku’s project in the budget is what would actualize the UN’s rosy principle of “leaving no one behind”. It is commendable that there are attempts towards the inclusivity path. However, the realization of the Agenda 2030 and the SDGs calls for greater strategic actions by both the National and County Governments. And this can only be realized if the respective Governments effectively engage key stakeholders working at the grassroots so that the views of all citizens, particularly the marginalized ones are taken on board in policy making, planning, budgeting and execution of development programs. In this regard, and taking into consideration that the voice of individual citizens need to be organized, the non-state actors (NSAs) operating in the country need to up their game to fill-in the gap. They should enhance their capacities to enable them comprehensively and effectively engage stakeholders right from the national level to the grassroots communities.

In conclusion, we need a paradigm shift in our theory of change from needs-based interventions to a more policy influencing (advocacy) approach in order to hold those in authority to account. But above all, Kenyans must be prepared to exploit the opportunities provided by the Constitution and the Agenda 2030, hence claim the right of not being left behind by the National and County Governments. Indeed, as the Constitution stipulates, participation as a national value and principle of governance is binding to all of us.

The Writer is a Management Consultant.

OPINION ARTICLE
BY ELIUD OWALO

Globally, there are today about 264 million children and youth not going to school. This is according to the Global Education Monitoring (GEM) Report of the Sustainable Development Goals (SDGs). One can imagine what amount of human resource is wasted if these children and youth fail to access education. We can also imagine the amount of resources and concerted efforts required to address this gap. According to the 2017 Economic Survey, Kenya’s net enrollment rate (NER) for primary schools was at 88.1% in 2012 and 2013, and improving to 88.2%, 88.4% and 89.2% in 2014, 2015 and 2016 respectively. Looking at primary-secondary transition rate, the country recorded 64.5%, 74.7%, 76.1%, 81.9% and 81.3% in the same period. Though our ratios can be said to be relatively high, we are part of the 264 million global statistics.

The implication is that like many other countries, we have to progressively put into place measures to address the many challenges facing our education sector. As a fact, education is a critical ingredient of national development as it is a key determinant of the quality and capacity of human resources necessary to drive a country’s development. In spite of this central role, countries across the world continue to face a myriad of challenges in their respective education sectors. In this regard, education remains a perennially important agenda which has attracted a lot of global attention and support over the years.

Tracing back to the “World Conference on Education for All” held in Jomtien, Thailand in March 1990, the meeting was historical as the “World Declaration on Education for All” adopted in the conference re-affirmed the notion of education as a fundamental human right in line with the Universal Declaration of Human Rights, adopted in 1948, which declared that “everyone has a right to education”.

At the beginning of this millennium, the global efforts towards education for all were further bolstered by the commitments made within the framework of goal number 2 of Millennium Development Goals (MDGs) on achieving universal primary education. The MDGs came in at time when our statistics had deteriorated through the years. For instance, the NER had reduced from 98% in 1978 to 75% by 1999 and about 70.7% in 2001.

We must therefore give credit to the positive efforts through which free primary education (FPE) was conceptualized and subsequently operationalized in January 2003. One of the key and most impactful results of the introduction of the FPE was an increase in enrollment from 5.9 million children in 2002 to 7.4 million in 2004, a dramatic increase by 1.5 million.

Since 2003, the country has witnessed various reforms in the education sector. However, the reforms have had their good and bad moments – thanks to our poor record of sustaining reforms. Thanks to the appointment of Fred Matiang’i as the Cabinet Secretary for Education in 2015, reforms in the sector were reinvigorated. Classic examples of some of the reforms he initiated and steered are: an overhaul of the curriculum, with the aim of addressing mismatches between the curriculum and the needs of the market; and radical improvement in the conduct of national examinations, a feat that was not easy after long periods of infiltration by exam leakage cartels.

Of course, the reforms have not come in cheap. The gross total expenditure of the education sector has risen from about Ksh. 260.1 billion in 2012/13 financial year to Ksh. 374.9 billion in 2017/18, an increment of 44 percent. To understand the kind of resources going into the sector, the 2017/18 allocation of Ksh. 374.9 billion represents 23% of the total national budget. The ratio is expected to increase to 25.4% and 25.2% in 2018/19 and 2019/20 financial years respectively. Comparatively, in 2017/18, the health sector was allocated 3.8% of the total budget and is expected to rise to 4.1% in both 2018/19 and 2019/20. Again, Energy, Infrastructure and ICT sectors combined took 25.5% percent of the budget in 2017/18, with a projected reduction to 24.1% and 23.8% respectively in 2019/20.

In sum, singularly, the education sector is taking a quarter of the national budgetary resources. Yet, the sector needs are even greater, what with the frequent strikes by teachers and university lecturers in agitation for higher salary perks. This notwithstanding, I opine that that the rationale for whatever amount of investment in the sector should be seen in the context of the past challenges coupled with the attendant strategic issues and the returns expected from the ongoing reforms; including but not limited to how the sector will meet the country’s current, medium and long-term human resource needs.

Certainly, the country’s development aspirations necessitate progressive improvement of our human resource capacity. Indeed, realizing the economic transformation envisioned in our development blue-prints requires that we improve the quality and relevance of the skills of our workforce, and in particular the youth, upon whom the country will depend on in the medium and long-term.

As such, the education sector must effectively deploy strategies that will align with the SDG number 4 that seeks to ensure inclusive and equitable quality education and promote life-long learning opportunities for all. Here, the thematic target areas are wide ranging from childhood education to technical, vocational, tertiary and adult education; and equity issues and facilities just to mention but a few. What this portends is that we must brace ourselves for and keep awake to a prolonged season of continued education reforms in Kenya.

There are many priorities to focus on, but in my opinion, key areas of attention should include: improvement of infrastructure in learning institutions to address existing gaps and ease of strain of the existing facilities; deepening curriculum and examination assessment reforms at all levels;  enhancement of grants to improve access to education particularly for the poor; integration of ICT at all levels; promotion of science, technology and innovation; provision of teaching and learning material, especially for the newly rolled-out curriculum; improving and expanding the Technical and Vocational Education and Training (TVET) Colleges with a clear focus on equipping the youth with relevant skills required to transform our labourforce; addressing equity issues; and improving governance to minimize misappropriation of funds in the sector institutions.

Kenyans are already enjoying some fruits from the reforms initiated since early 2000, and carry even greater expectations that coherent reforms will be sustained in all levels of education. This way, we can improve our NER, realize effective progression of learners from one level to another and churn out an appropriately skilled labourforce that can drive the ever elusive industrial transformation in this country. Furthermore, recognizing that education underpins all the 17 SDGs, the work of the Ministry of Education needs to be anchored on innovative and integrated planning. The positive thing is that there is some fair level of goodwill among Kenyans and other local and international stakeholders. Moreover, although the education largely remains the responsibility of the National Government, opportunities for collaboration with County Governments should be exploited towards a more effective and efficient education sector. Over to you Amb. Amina Mohamed.

The Writer is a Management Consultant