By Samuel Kabara

Countries are beginning to consider decriminalising and legalising cannabis, fuelled by its medicinal and industrial benefits.

In June 2016, the Malawian Parliament adopted a motion to legalise the non-psychoactive industrial hemp, but with emphasis on regulatory measures before the country could cultivate, process and export the hemp variety of cannabis. In its third year of trial cultivation, the crop has shown immense potential with no reported negative incidents.

RELIEVES PAIN

Last year, US President Donald Trump signed the “Farm Bill”, effectively exempting hemp from Schedule I drugs (drugs with high abuse potential with no medical use). American farmers can now produce industrial hemp legally and states can research hemp and set up cultivation programmes.

In April, the South African Health Products Regulatory Authority awarded the first batch of licences for cultivation of medicinal cannabis to local companies, allowing the country to compete globally.

Uganda recently licensed an Israeli company, Together Pharma, to set up a marijuana oil extraction plant in Kampala. It plans to initially invest $5 million (Sh500 million).

All human beings have an endocannabinoid system, which naturally produces cannabis-like compounds, the main ones being anandamide and 2-arachidonoylglycerol (2-AG) that bind to their receptors to produce beneficial effects.

Cannabis has been shown to be beneficial in managing diseases ranging from cancer to epileptic seizures. Hemp, the non-psychoactive breed of cannabis, is the most versatile crop known to humans with thousands of uses in industry. Cannabis oil relieves chronic pain in debilitating illnesses such as cancer in both children and adults. A careful balance of the two main components of cannabis — tetrahydrocannabinol (THC) and cannabidiol (CBD) — has been demonstrated to kill cancer cells in mice.

KILIMANJARO SATIVA

The plant has also been shown to be effective in managing conditions including tumour reduction, epilepsy, Dravet’s syndrome, arthritis, Alzheimer’s disease, glaucoma, multiple sclerosis and anxiety.

Despite foreign cannabis-based medicines in the local market, medical knowledge on cannabis in Kenya is scanty. But a group of Kenyan medical practitioners may undergo a fellowship programme on medicinal cannabis by a US-based medical association.

In 10 years, the global medical cannabis industry is expected to be worth $50 billion (Sh5 trillion). In Colorado, regulated medical cannabis sales topped $6 billion (Sh600 billion) since the 2014 legalisation.

Industrial hemp has had numerous uses — including production of medicines, food, paper products, textiles, body care products, construction materials, livestock feeds, fuel, nutritional supplements, essential oils and, recently, the biodegradable plastic critical in the fight against pollution.

A well-regulated medicinal and industrial cannabis industry can generate numerous opportunities. In his book, The Cannabis Story, lawyer John Ochola observes that 12 seeds of Kilimanjaro Sativa, a strain of cannabis, retail at 75 euros (Sh8,700). One plant can produce 100-1,000 seeds (Sh72,000) on the lowest yield.

MEDCINAL RESEARCH

The Narcotic Drugs and Psychotropic Substances (Control) Act of 1994, which binds Kenya to several international treaties, lists cannabis as a prohibited plant. Engagement with cannabis is only allowed to persons licensed by the board. However, in the 25 years of the Act, this board has never been constituted, hampering any medicinal or industrial research on cannabis.

Kenyan researcher Sammy Gwada Ogot’s recent attempt to have the Senate decriminalise cannabis failed. The MP for Kibra, Ken Okoth, has tabled a Marijuana Control Bill.

Kenyan cancer patients, who are undergoing stressful and expensive medical procedures, can hardly wait to be granted access to medical cannabis — and it is getting too late. Parliament must urgently review the law with regard to cannabis.

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Dr Kabara is a pharmacist, health economist, principal lecturer at Kenya Medical Training College (KMTC) and cannabis researcher. This email address is being protected from spambots. You need JavaScript enabled to view it.. This piece appeared in the Daily Nation on June 3rd, 2019.

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The Pharmaceutical Society of Kenya (PSK) is currently undertaking research on the proposed Marijuana Control Bill. You can read more here.

 

   

Posted On Tuesday, 18 June 2019 08:55

By Nickson Onyango 

It is a common feature to see signage of plots for sale along our highways and roads with a cache that there are only a few remaining. Almost all morning radio shows have dedicated some minutes to advertising the new kid on the block with good plot offerings.

HIGH PRICES

Not long ago, individuals were cheated into buying plots alleged to have installed greenhouses and promised high returns from growing tomatoes and capsicum. But why would these well-established companies with high financial capabilities not undertake such ventures on their own?

It should not escape the attention of agriculture sector stakeholders that this approach was well received by urbanites as much as the outcome was not good. Initially, the messaging was a preserve of major towns, but the proliferation has been extended to the smaller ones in well-known rural areas.

In some counties, cultural practices on inheritance have reduced land ownership to less than a quarter of an acre, which cannot be economically viable from an agricultural point of view. Consequently, the urge by every adult Kenyan to have a title deed has seen large family land subdivided into small parcels that are snapped up on a promise of value appreciation.

The right to own land in Kenya is constitutional and neither is it a crime to aspire to increase your portfolio as long as it is acquired by just means. Anecdotes abound of brokers who have become instant millionaires out of buying large parcels of land and subdividing them into plots for resale at exorbitantly high prices.

The legality of their trade is never in question because it’s dictated by forces of supply and demand. Save for a few rogue ones, the land sector is just operating on the realms and needs of the current generation.

It’s as if nothing can suppress the sheer will to own plots. For instance, Kiambu County’s landscape has been changing from coffee farms to apartments in recent years because of a burgeoning urban population that needs housing.

 

KITCHEN GARDENS

But there needs to be a rethink of how to embrace urbanisation with agriculture in mind. We should ask ourselves why a land owner is getting a high return on investment from real estate in comparison to farming. Why are our policies and approaches to farming failing, making our farmers abandon this sector in droves?

Most of our productive population is moving towards urban areas and we cannot keep on relying on our ageing parents in the rural countryside to produce 80 per cent of food that is consumed in towns.

In urban areas, most buildings are storeyed but, perhaps, we should be introspecting why they cannot be developed with subsistence household farming in mind. For instance, it will be prudent for landlords to design their units with spaces for a kitchen garden, which will allow tenants to grow vegetables in gunny bags and reduce expenditure on groceries.

Besides, with erosion of cultural inclinations, it’s high time we embraced clustered settlements in the wave of increasing population.

NET IMPORTER

By subdividing agricultural land into small pieces for food production, farmers cannot boast of a strong commercial motive because they remain uninfluenced by changes in market forces. In the long run, they have difficulties in using improved practices and technology, hence low marketable surplus as their production is only sufficient to meet domestic needs.

It’s worrying that seed firms in Kenya have started moving to Tanzania and South Africa because of entrenched land subdivision. The Seed Trade Association of Kenya has raised the alarm over the negative impact of this on production of planting materials, and, ultimately, food output.

Agriculture and land sector stakeholders should come up with initiatives to address this problem and avoid beautiful failure. We risk becoming a net food importer of produce that we could have grown with ease.

Based on prevailing realities, players in the sector should make small-scale farmers adapt good farming practices instead of focusing on relatively unaffected regions. After all, we have success stories of farmers who have established dairy farms with a herd of 100 cows on half an acre of land.

Mr Onyango is an agricultural economist. This email address is being protected from spambots. You need JavaScript enabled to view it.. This opinion piece appeared in the Daily Nation on 10th June 2019.

You can view advocacy issues around agriculture at the link here – agriculture advocacy issues.

Posted On Monday, 17 June 2019 11:56

By Sachen Gudka

The recent move by Central Bank to withdraw the Sh1,000 from circulation by October 1 has once again shone a spotlight on the grave subject of the illicit economy and the various avenues in which it thrives to support criminal activities.

Even as we debate the short-and long-term implications of this change, industry sees it as a disrupter that is likely to curtail the prevalence of the illicit economy by making it difficult for counterfeiters, producers of substandard goods, and those trading in uncustomed goods to circulate them in the local market.

Additionally, money hoarded and funnelled into funding illicit economic activities will likely be redirected into the formal banking and lending structures to finance the production of real goods and services.

In the wake of increased trading within the continent due to the African Continental Free Trade Area coming into effect, it is paramount that we take all the fundamental steps to ensure that we weaken existing illicit trade networks.

The Organisation for Economic Co-operation and Development estimates that EAC governments lose over $500 million (Sh50 billion) in tax revenue annually due to the counterfeited products and pirated goods.

Counterfeit is the most prevalent form of the illicit trade in Kenya. The other day, President Uhuru Kenyatta, during his inspection of the Inland Container Depot in Embakasi, remarked that indeed, the multi-agency task force had uncovered illicit trade schemes that have been plaguing the local markets by circulating uncustomed goods.

Illicit trade undermines national and regional security, destabilises economies, increases the cost of public health, sabotages tourism, stunts innovation, and offers a haven to organised crime and trafficking. As a matter of fact, transnational organised crime is anchored on illicit trade. This economic sabotage is felt at every level of society from start-ups to multinationals.

It is important to note that no single entity can effectively enforce anti-counterfeiting measures within and across national boundaries. It was, therefore, encouraging when the multi-agency force was set up in 2018 and since then, notable progress in this endeavour has been made.

As the umbrella organisation for manufacturers in Kenya, we are encouraged with recent amendments to the Anti-Counterfeit Act, 2008, the legislation being the bedrock on which law enforcement can launch their offensive, and aid in increasing the success rate of action taken by law enforcement authorities.

The amendments to the Act underscore the government’s commitment to fight illicit trade and promote bona fide manufacturers and intellectual property owners in line with the Big Four agenda.

In the alcohol beverage industry alone, we still have more than 50 per cent of the commodity consumed in Kenya described as illicit. Meaning that there is loss of revenue to the government in this sector in form of unpaid taxes.

These issues were discussed, and solutions suggested at the summit that KAM held where a paper on “The unintended effects of Kenya’s Alcohol Regulation Policies’ by the Institute of Economic Affairs” was unveiled.

In the long term, having the right adaptive policies in place and the collaboration of all parties in the fight against illicit goods will take the evident gains so far forward, we shall reap by having more tangible economic achievements and a healthier, and safer population.

I believe we are on the right track and it is incumbent upon us to address these challenges head-on if left to fester, illicit trade is a threat to our nationhood. 

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The writer is chairman, Kenya Association of Manufacturers This email address is being protected from spambots. You need JavaScript enabled to view it..

This piece feature in the People Daily on 12th June 2019.

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The Business Advocacy Fund has supported the Kenya Association of Manufacturers to undertake advocacy on illicit trade and counterfeits. You can view the description on the issue here. Combating illicit trade - Kenya Association of Manufacturers (KAM)

Posted On Thursday, 13 June 2019 08:52

By Rosemary Okello-Orlale

As Kenyans, through the Ministry of Finance, Planning and National Development, are preparing for the budget for the 2019-2020 Fiscal Year to be presented to the legislature for approval on 1st July 2019, the issue of heavy debt has captured the main narrative, clouding the importance of the budgeting strategy and process in Kenya.

During a recent Policy Breakfast by Strathmore University Business School and Business Advocacy Fund for Business and Finance Journalists on Public Finance and Revenue Performance in line with the 2019-2020 Fiscal Strategy, the issue on how the growth of tax revenue has fallen short of the ever-ambitious growth in public expenditure dominated the session.

Kenya’s revenue portfolio is significantly driven by tax revenue and the primary contributor to tax revenue is income tax. Elias Wakhisi, Manager, Public Policy, ICPAK, who was one of the key speakers at the Policy Breakfast noted that the current expenditure deficit is at Kshs 38 billion. Meanwhile, Kenya’s revenue portfolio is significantly driven by tax revenue and the primary contributor to tax revenue is income tax.

According to him, PAYE contributes a large proportion to overall tax revenue, with only 3 million Kenyans paying it.  This is even though around 12 million Kenyans are eligible to pay taxes.  Mr Wakhisi noted that “Direct taxes drive the tax revenue structure of a country and efforts should be made to diversify the sources of revenue and widen the tax base,”.

Currently, the external public debt stock comprises principally of loans from multilateral, bilateral and commercial creditors. These make up 25.6% of GDP and the domestic debt stock is made up of treasury bills and bonds, which constitute 24.7% of GDP. Other debts are made up of suppliers’ credit, which includes the CBK overdraft, performing guarantees and bank advance which make up 2.3% of GDP. This debt is excluded from the medium-term debt strategy (MTDS). 

For Kenya to address the challenges facing the revenue sector, the country needs a new income tax law. According to Wakhisi, the current law was enacted in 1975. “We have been doing a lot of patch work since then on the legislation."

He emphasized that modern tax law will bridge existing gaps and address ambiguities that limit revenue.

Dr Miriam Oiro Omolo, Executive Director at the African Policy Research Institute, reinforced the need of having a new tax law which can help the Country in using a multidisciplinary approach to solve economic problems. “Linking the National and County Fiscal Strategy 2019/20 is crucial especially including the financial outlook with respect to county government revenues, expenditures and borrowing”, she stated.

She added, since the County Financial strategy paper should be produced by February every year, this can help the national government to include the financial outlook with respect to county government revenues, expenditures and borrowing.

Unlike the previous budgets, the priorities for 2019/20 fall within the ‘Big Four agenda’. The national government is implementing policies and programmes in the following areas:  Universal health care, affordable housing, manufacturing and food security.  The ‘big four’ are also prioritized in the third medium term plan (MTP III) of Kenya Vision 2030.

Since the Budget is the most important economic policy tool for any government and reflects a government’s priorities on the economy, policy implementation and social development, Dr Omolo says that the  2019/20 financial expenditure can help Kenya achieve the expected outcome under the Big 4 agenda: Accelerated and sustained inclusive growth, increase of opportunities for productive jobs and reduction in poverty, and income inequality. 

However, for the impact of the outcomes to be achieved, there must be legal and institutional reforms across the big four sectors.  “Collaboration with the counties is key to achieving the Big Four agenda,” said Dr Omolo. She added, “Creating an enabling environment that can attract investments in the four priority sectors will be critical or else the ordinary person will continue to bear the burden of taxes.”

Attendees at the policy breakfast which attracted over 30 Business and Finance Journalists agreed that there is a lacuna when it comes to Kenya's taxation policies.  Therefore, there is a need for a stronger strategy to enhance revenue collection such as sealing tax loss loopholes and widening the tax base.

The country should adopt reduction in spending and support key sectors of the economy, especially the major income earners such as the services sector, agriculture, manufacturing and tourism among others. Further, there should be the implementation of budget monitoring reports. The Government should act on the Auditor General and Controller of Budget’s recommendations with respect to public debt by enhancing accountability in public and private sectors to free more resources to development.

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On 31st May 2019, Strathmore Business School’s Africa Media Hub in collaboration with the Business Advocacy Fund hosted a Media Policy Breakfast for Business and Finance journalists. The theme of the breakfast was “Public Finance and Revenue Performance in line with 2019-2020 Fiscal Strategy”. The speakers at the breakfast were Dr Miriam W. Oiro Omolo, Ph.D., Executive Director at the African Policy Research Institute (APRI) and Elias Wakhisi, Manager, Public Policy, Institute of Certified Public Accountants of Kenya (ICPAK).

You can download Dr Miriam W. Oiro Omolo’s presentation here.  

You can download Elias Wakhisi’s presentation here.

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Rosemary Okello-Orlale is the Director of the Africa Media Hub- Strathmore University Business School.

Posted On Monday, 10 June 2019 15:33

By John Recha (Ph.d)

The impact of climate change on crop, livestock and fisheries systems in Africa is evidently overwhelming, yet we must produce more food for the growing population.

Climate-smart agriculture (CSA) can help countries and communities adapt to the impacts of climate change, while sustainably increasing productivity, and delivering co-benefits of reducing/removing GHGs for environmental sustainability, nutrition and livelihoods.

Sustainable goals

The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) suggests ten CSA innovations that can help the sector step up to the challenges posed by climate change.

The innovations are useful in achieving the UN Sustainable Development Goal-2 of ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture.

The first innovation involves agroforestry to diversify farms and enhance resilience.

Agroforestry involves the integration and use of trees in crop fields, farms and across agricultural landscapes.

Trees buffer climate change impacts and variability and diversify land use and farming systems, providing additional livelihood and environmental benefits not delivered through land management without trees.

Secondly, the farming of fish and other aquatic products in an innovation that enhances nutrition and diversify incomes.

Fish farming can increase farmers’ adaptive capacity by providing an alternative supply of fish to depleted wild fisheries, as well as an additional nutrient rich and widely accepted animal food for homestead consumption and sales.

Fish ponds on smallholder farms help diversify income for farmers and thus enable them to increase resilience in the face of shocks.

The use of stress tolerant varieties to counter climate change is the third innovation.

Climate change affects the yield of crops through increased exposure to high temperature, water stress, flooding, diseases, pests and salinity.

Use of crop varieties that have increased tolerance to climatic stresses increase smallholder farmers resilience to climate change.

Stress tolerant varieties

These benefits come about by either increasing the physiological resilience to climatic extremes or the use of early-maturing varieties that allow cropping calendars to be adjusted to cope with seasonally unfavourable conditions.

The fourth innovation involves improving smallholder dairy production. The interventions could include improved feed and forage management, breeding for heat tolerance, and efforts to improve animal health.

Due to the high consumption of rice, the fifth innovation targets rice production through alternate wetting and drying.

The practice helps rice farmers become more resilient and reduces emissions.

It is suitable for irrigated rice systems and involves periodic drying of the field by suspending irrigation for several days.

Fields are irrigated again once the first small soil cracks are visible so that there will be enough water available for the rice plants.

Use of solar irrigation is the sixth innovation. Irrigation can help millions of smallholder farmers intensively cultivate their small parcels to improve income and better cope with climate induced uncertainties.

Solar irrigation is more affordable, useful for both groundwater and surface flooding without threatening resource sustainability and minimising its environmental footprint.

Digital agriculture

The seventh innovation is utilisation of digital agriculture.

This encompasses an array of technologies, channels, and analytic capabilities that are being applied to make farming more precise, productive, and profitable.

These technologies tend to be applied with the goal of increasing productivity per unit of land, and they can be a natural complement to climate services and other services e.g. credit offered through digital platforms.

The use of climate-informed advisories is the eighth innovation.

Climate services involve the generation, translation, communication and use of climate knowledge and information in climate-informed decision making, policy and planning.

By reducing uncertainty, climate information and advisories enable farmers to better anticipate and manage adverse climatic conditions, take advantage of favourable conditions, and adapt to change.

Use of weather index-based agricultural insurance is the ninth innovation.

Agricultural insurance normally relies on direct measurement of the damage that each farmer suffers. Index-based insurance, on the other hand, is a feasible alternative.

Pay-outs are triggered not by observed crop losses, but rather when an index – such as rainfall or average yield – falls above or below a prespecified threshold.

Insurers can automate pay-outs and make them quickly.

This lowers administrative costs and premiums compared with conventional crop insurance.

Individual farmers can purchase insurance or groups, can also purchase the insurance for farmers.

The tenth innovation is scaling up financing for climate change adaptation in agriculture.

The success of adaptation actions in agriculture rely not only on technological innovations, but supporting institutional, policy, and investment environments, which can help innovations reach scale rapidly.

New, fit-for-purpose business and financial models are an area for innovation to support scaling up of proven technological innovations.

There is need for stepping up the CSA campaign by national and county governments, research and development partners, the private sector and community groups.

At recent “Climate Resilient Agribusiness for Tomorrow” workshops organised by the SNV Netherlands Development Organisation, it was observed that time is ripe for CSA knowledge to be disseminated to small scale farmers for food and nutrition security.

Mr Recha (PhD) is a Research Scientist at The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) This email address is being protected from spambots. You need JavaScript enabled to view it. This opinion piece also appears in The Standard on 21st May 2019.

Posted On Tuesday, 21 May 2019 09:55

By Andrew Mwangura

Current government plans on shipping and blue economy calls for an immediate re-look at the Merchant Shipping Act 2009.

A clause in the Act blocks foreign shipping lines from engaging in other businesses and confines them to cargo haulage — and that has been the case for the past 10 years that the law has been in effect.

BARRING OUTSIDERS

There is a need to repeal or amend the draconian Act and come up with a Cabotage Law.

Cabotage by merchant ships is prohibited in most countries that have a coastline. The aim is to protect the domestic shipping industry from foreign competition, preserve domestically owned shipping infrastructure for national security purposes and ensure safety in congested territorial waters.

The purpose of Section 16 of the Merchant Shipping Act is to allow the “local talents/entrepreneurs” to venture into these jobs/businesses of providing services to ship owners — both local and foreign — while barring outsiders from setting camp in Kenya to provide services that can otherwise be offered by locals.

A change in the law, however, should take into consideration the realities and dynamics in the maritime world.

One is that shipowners nowadays do not necessarily operate their own vessels. They “outsource” many services — including technical management (such as superintendence), commercial management (shipbrokers and supercargoes), crew management (crewing agencies) and bunker supply.

A typical shipping line will have a very small office in, say, the UK, a technical management service office in Hong Kong, a crewing office in Manila, a commercial management office in New York and a bunker supply office in Singapore.

The shipowner will then concentrate on trading his own assets (the ships) or chartered assets on the lucrative trade routes. He will be dealing with bankers, shipbuilders, insurers and other stakeholders.

UNEMPLOYED YOUTH

The question of cabotage is a complicated one since the East African Community Customs Management Act 2004/2009/2011 (as amended) is interpreted differently by Kenya and Tanzania, leaving foreign ship owners baffled.

For instance, the Kenyan coast does not have safe and sheltered anchorages for transshipment, and that has to be carried out within the port limits. On the other hand, Tanzania and Mozambique allow their coast to be used for such operations.

But then, how many Kenyan- or Tanzanian-flagged coastal vessels can take part in these operations?

There is a need to support the blue economy implementation team in its bid to revitalise the Kenya National Shipping Line (KNSL) and, hence, create jobs for the seafarers and other unemployed youth, especially in the coastal region.

The President has a political and moral responsibility to effect plans for harnessing local national resources and ensure they are organised in a manner that advances the social and economic well-being of all citizens. Indeed, it is a constitutional duty.

This responsibility is more critical to the coast residents, who have for many years been marginalised, resulting in high poverty levels and massive unemployment. This has caused a social crisis in the form of violent extremism, drug abuse, radicalisation and hopelessness.

Mr Mwangura is the convener, Seafarers and Mombasa Youth Assembly. This email address is being protected from spambots. You need JavaScript enabled to view it.. This opinion piece appeared in the Daily Nation on May 14th, 2019.

Posted On Tuesday, 21 May 2019 09:14

By Kennedy Manyala

The signing of the Kigali Declaration on the African Continental Free Trade Area (AfCFTA), in March 2018, by African Heads of State and Government, marked a significant shift in expectations by Africa’s business community, for Africa’s future economic growth and development.

The Declaration introduced enhanced intra-African trade, achievable through AfCFTA as a sure way of achieving elusive sustainable economic development, employment creation all over member states, and most importantly, reversing the declining economic growth and development trend in the continent.

Over the past fifteen or so years, most countries in Africa experienced sustained economic growth, with the rates often exceeding 5% a year. Between 2000 and 2010, the continent achieved average real annual GDP growth of 5.4%, adding US$78 billion annually to GDP. This growth inspired optimism around and about the continent’s socio-economic prospects and in its ability to deliver better socio-economic welfare gains to the people.

However, this was not the case. Between the years 2010-2015, Africa’s economic growth slowed down. Growth dropped to an average of 3.4% per year thus sending shockwaves through the leadership of Africa and the entire business community. Despite this decline in the performance of mentioned economies, the rest of Africa’s economies were able to maintain stable growth rates in general. Nonetheless, African economies amid many internal and external shocks have been resilient. According to the World Bank Review (2018), growth in Sub-Saharan Africa is estimated at 2.3% for 2018, down from 2.5% in 2017. Economic growth remains below population growth for the fourth consecutive year. This trend created a shockwave among economic policy makers in Africa, the continents leadership, and the entire business community.

‘Africa cannot continue playing catch-up all the time’

Realizing that the time for economic growth and development ‘catch-up’ is over, and that spiritual, economic, and political history would judge them harshly, the African leadership moved swiftly and agreed to establish the Continental Free Trade Area (CFTA) by 2017. In so doing, they endorsed a road map and architecture for fast-tracking the establishment of the CFTA and the Action Plan for Boosting Intra-African Trade by: fast-tracking the EAC, COMESA and SADC (Tripartite FTA), overseeing the completion of Free Trade Agreements (FTAs) and, Consolidating the Tripartite and other regional FTAs into a CFTA initiative. It is believed that a more open Africa through the CFTA will grow intra-Africa trade from its current levels. Under the present policy environment and physical conditions, intra-African trade remains low. In the trading period 2017-18, intra-Africa exports accounted for 16% of Africa’s total exports. The share of intra-African exports as a percentage of total African exports increased from about 10 % in 1995 to around 17% in 2017 with some slight improvement expected in 2018, but it remains low compared to levels in Europe (69%), Asia (59%), and North America (31%).

But isn’t the initiative ambitious?

No doubt, the AfCFTA among other commitments Africa’s leadership has made in the past such as the Comprehensive Africa Agriculture Development Programme (CAADP) and the Programme for Infrastructure Development in Africa (PIDA), to name a few, is probably the most ambitious commitment we have ever seen in recent times.

Though it looks good on paper and in economic spirit, Africa’s economic development planning history shows us that the AfCFTA could be a public relations exercise. That is unless African governments through their respective Regional Economic Communities (RECs) act on trade barriers, physical infrastructure challenges and overall national competitiveness.

Africa must do the following:

Africa must make AfCFTA work. African governments through their respective RECs must have the courage to read and implement the Economic Textbook requirements. We understand that structure, nature and physical dynamics in Africa can be intimidating to intra-Africa trade and its CFTA policy component of free movement of goods. But Africa must have the courage to fix it.

First, Africa through the AfCFTA must try to remove trade barriers within and across all RECs and allow the free movement of goods, services, and people across Africa. The CFTA could help to increase combined consumer and business spending on the continent to $6.7 trillion by 2030. Second, Africa has poor road and rail network that has stood against intra-trade. Africa must put its road and rail infrastructure in place. All roads connecting countries and every RECs will be key in speeding up the movement of goods and reducing transport costs. For example, a road from Mombasa (Kenya) to Matadi via Kinshasa (DRC) or from Mombasa, Kampala to Kisangani and Bangui, would expose trade with the Central Africa Region. Third, Africa must engage, promote and participate in a massive private sector development agenda that would primarily start with national completeness programs that are cascaded down to the SMEs. Such a programme would make the AfCFTA work for the African consumer, as well as make African goods globally competitive.

Kennedy Manyala is an applied microeconomist with a deep understanding of issues worldwide ranging from the Americas, European Union, Asia, Middle East, and Africa to the East Africa Community (EAC) especially on strategic public and private investments in non-tourism sectors and tourism and socio-economic development issues 

Posted On Monday, 20 May 2019 12:03

By Ethel Makila

The World Health Organisation defines universal health coverage (UHC) as a healthcare system that ensures all people can use quality services that improve their health without putting them at risk of financial harm.

Countries cannot expect to achieve that without putting in place mechanisms that protect communities from disease and safeguard them from loss of income caused by epidemics such as HIV, TB and Ebola. Research and innovation for the development, deployment and affordability of critical medical treatments are indispensable in the quest for UHC.

DISEASE BURDEN

UHC conversations are largely centred around service delivery, access to drugs, diagnostics and provision of social health insurance. But under-researched or ‘neglected diseases’ continue to pose a disease burden and the constant presence of global health threats from disease outbreaks that transcend borders (such as Ebola, swine flu and avian influenza) remain.

The April 8-15 WHO weekly bulletin on outbreaks and other emergencies had an alert on an outbreak of the deadly dengue fever in Mombasa County.

According to WHO, dengue virus is a leading cause of illness and death in the tropics and subtropics with no vaccine or specific treatment. Exposure to such a disease puts affected communities beyond the universality of UHC.

The undertaking to achieve UHC should take a leaf from the global and national response to HIV. While progress in early diagnosis of HIV infection, advanced care and treatment for those infected, as well as strategies to reduce infection rates, are being celebrated, the miles to go in conquering the epidemic are still recognised as a basis to continue and even step up investment in research.

CLINICAL TRIALS

Millions of dollars continue to be invested in discovery research which aims to increase our understanding of HIV and ultimately lead to the development of a vaccine that will effectively, safely and affordably prevent new infections. Clinical trials of promising vaccine candidates are ongoing. They include two trials — one in South Africa and the other spanning five countries in southern African countries of South Africa, Zimbabwe, Mozambique, Malawi and Zambia — to evaluate the efficacy of the candidates in HIV prevention. Furthermore, numerous epidemiological studies and socio-behavioural research continues to inform policies and product design and development in the HIV response.

As this year’s Maisha HIV and Aids Conference, organised by the Kenya National Aids Control Council (NACC), seeks to learn lessons from the HIV response by public and private sector stakeholders, it would do well to take an in-depth look at the centrality of research and development in this response.

In the same way leaders in the HIV field have recognised that the current gains and available tools will not win the race against the epidemic, we would do well to realise that research to enhance disease surveillance, improve diagnostics and health systems, develop safer and more accessible prevention and treatment, and inform policy development will greatly contribute to accelerating the realisation of UHC in Kenya.

Ms Makila is the Associate Director - Advocacy Policy and Communications, International Aids Vaccine Initiative (IAVI). This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Friday, 17 May 2019 12:39

By Marie Shabaya

The government has food security as a pillar in its Big Four Agenda.

If it is that serious about food security, then its Big Four implementing agencies must consider partnerships with local agricultural and development organisations that have already deeply invested in our farming communities.

In his State of the Nation address earlier this month (May 2019), President Uhuru Kenyatta made a crucial recognition.

He emphasised that ongoing agricultural reforms, in service of the agenda, were ‘farmer-centric’ and sought to “reduce the cost of food, increase agricultural value-addition and offer incentives for farming”.

Indubitably, Kenya’s smallholder farmers are the key in delivering food security, at any measure. And governments, donor organisations and development institutions are all in agreement of this fact.

In “Feed Africa”, a seminal roadmap for agricultural transformation and food security, the African Development Bank (AfDB) advises governments to place small-scale farmers at the forefront of reforms.

It calls for them to not only include but also collaborate with various stakeholders in national agricultural systems — such as development partners, the private sector, community organisations, and civil society.

Partnering with grassroots organisations gives policymakers a direct connection to farmers. As major food producers in the country, smallholders need support and resources at their disposal to become more efficient. For example, inputs, such as seed and fertiliser, are notoriously bulky and too expensive for farmers to acquire.

If the government worked with agricultural organisations in the villages to supply or distribute inputs, it could guarantee that smallholders receive them, with the associated costs of production lowering overall food prices as the reforms intend.

CONSULTATIONS

The Agricultural Sector Growth and Transformation Strategy (ASGTS), which is under review, is how the government intends to operationalise the food security mandate.

The ASGTS is aimed at increasing smallholder incomes, boosting agricultural production and improving food resilience in the nation’s homes. Implementing the strategy will, undoubtedly, be a major logistical exercise.

About 75 per cent of Kenya’s working population are small-scale farmers dispersed across the 47 counties. Interventions, even at the county level, need a tailored approach to succeed.

Working with organisations that have similar objectives and established relationships with farming communities would allow government agencies to seamlessly plug into the sectoral ecosystem, at the grassroots, encouraging outcomes.

If implementers of the ASGTS were to collaborate with such organisations, they could make these long-established relationships and knowledge available to encourage reforms.

PRODUCTIVITY

National programmes can then be tailored to suit local conditions, ensuring efficacy in the long run, while monitoring, in partnership with these groups, can confirm that outcomes are met, even at the grassroots.

Initiatives such as those by the United Nations’ World Food Programme (WFP) in partnership with USAid in western Kenya prove that governments can get results when they join forces with local organisations.

The project trains groups of smallholders, who are members of 79 hyper-local organisations, on improved farming methods and minimising post-harvest losses.

They then guarantee a market for harvests with farmers combining their produce and selling on to the WFP and the National Cereals and Produce Board (NCPB) in bulk.

Working with similar models, the government can ensure that farmers reach new markets and, at the same time, sell produce at a higher price.

PARTNERSHIPS

However, to organise farmers, officials need to work with bodies that are based in, or have established trust with, farming communities.

Conversations on realising food security in Kenya, beyond policy mandates, have already aligned on the importance of the public-private partnership nexus.

In his opening remarks at last year’s Future of Food Conference in Nairobi, Agriculture and Irrigation Chief Administrative Secretary Andrew Tuimur noted that “farming is privately driven and the government’s role is only to facilitate it”.

In accelerating the transformation of the national agriculture sector and, consequently, ensure food security for all Kenyans, Dr Tuimur’s words need to be top of the mind.

Enabling growth in farming means working with the wider ecosystem and its stakeholders, in partnership, to deliver on promises made.

Ms Shabaya is an editor and the lead writer at One Acre Fund. This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Thursday, 16 May 2019 10:55

By Michael Arum

Public policy has the power to be transformative, which is why we invest in it. For the best of policies change economies, solving old and even persistent problems and creating new dawns: in frameworks constructed by some of our finest minds, political leaders, technocrats, and experts, all with the aim of changing our collective future.

This stands as an aim that is increasingly now enshrined into our law. For what we do not want for our policy-constructing tax spend are, for instance, new sugar regulations that deepen the decline of our sugar industry, increasing imports, driving away farmers, and felling sugar companies.

For which reason, in 2013, Kenya signed into law the Statutory Instruments Act, which obliged our law makers to carry out an analysis of the impact of any new statute.

Moving to regulatory impact assessments (RIAs) has required new skills, but it is now law, which makes it obligatory. Moreover, six years forwards from the SI Act, it is reasonable to hope that each ministry has developed the posts and modelling skills to deliver impact assessments with each new round of proposed statute.

Unfortunately, for us as sugar farmers, that has not been the case with the sugar regulations that the president’s office is now reviewing. The Ministry of Agriculture has never published a regulatory impact statement for its sugar industry proposals. The president ordered a task force, and the task force has also proceeded in examining the best possible policies for the future of our sugar industry without any impact statement.

We do not believe that either the ministry or the task force is meaning to disregard the law on the need for an impact assessment. Indeed, it is possible that the ministry of agriculture may have confused the need for a separate regulatory impact statement with the drawing up of the general explanatory memorandum, which is quite different, with different contents.

But the legal requirement of the regulatory impact statement is that it explains the effect of proposed regulation, and that has never been done for the sugar regulations.

Yet examining the effect of a regulation is extremely important, and even vital in creating a vibrant economy of the future.

That is why the Ministry is obliged by law to give an assessment of the costs and benefits of the proposed new rules, of any other means of achieving the same objectives, and of the reasons for not using those alternative means – all in the regulatory impact assessment.

However, with none of this information yet provided by the Ministry, the government’s moves to enhance public participation in legislation have also played out in allowing us to carry out our own regulatory impact assessment, which we have submitted to the Ministry.

Under the constitution, the public, communities and organisations affected by any policy decision must be involved in the decision-making process. The newly enacted Public Participation Act 2018 further enhances that public consultation.

In many ways, the need to reinvigorate our sugar industry has shown why these new laws on forming laws are so very important and where their value truly sits.

For at the heart of the currently proposed sugar regulations is a proposal that farmers be ‘zoned’. This would have meant they were obliged to sell their sugar cane to one, single designated buyer, in a policy that has proven so damaging elsewhere in the world that it has literally been abandoned and banned - in Australia, India, Pakistan, and elsewhere. It is not that these economies didn’t try zooming, they did, but found it so damaging as to subsequently outlaw it.

In our case, Kenya does not need further setbacks caused by a damaging policy. The effect of sugar cane zoning will be more mayhem and an accelerating exit by farmers from the growing of sugar.

Thus, the proposed regulations could have actually led to increasing sugar imports, - which may have been supported by prominent importers, but may not have been supported by the National Treasury in seeking to curb our nation’s ballooning trade deficit.

Indeed, the prospect of further driving downwards domestic sugar production, affecting thousands of farmers, and even seeking special waivers from our trading bloc COMESA to have such policies, really shows the value of assessing regulatory impact.

It is a must, and thus in the president’s office, we now trust in pursuing regulation designed to deliver more livelihoods from sugar growing, rather than fewer.

For where ministries do not observe the laws, it is only right and proper that our president’s office should demand compliance at this latter-day juncture, in order for everyone to be able to determine the best way forward in creating a future of better livelihoods and better economic growth.

Michael Arum is the  Coordinator of the Sugar Campaign for Kenyan farmers

Posted On Friday, 03 May 2019 12:28

By Kiprono Kittony

The push to boost intra-regional trade, cross-border investment and economic integration in Africa has reached a pivotal phase. This April, Gambia became the 22nd country in the continent (Kenya was among the first ones) to ratify the Africa Continental Free Trade Agreement, helping the historic trade deal gather the minimum required ratifications to come into full effect.

Signed last year in Kigali, the capital of Rwanda, the AfCFTA presents Africa with a golden opportunity to unleash the power of its industries, create jobs for the masses of unemployed youth and fast-track development.

Most rich industrialised countries started the regional integration journey in the 1960s, meaning that their industries have enjoyed access to larger markets outside national borders for close to six decades. This head start in cross-border trade and investment explains why industries in these countries enjoy crucial competitive advantages such as economies of scale and specialisation.

When firms produce at scale, which is possible if they have easy access to markets outside their national borders, they not only manage costs better and hence get more profitable, but also find it easier to specialise in one area. Firms become better at making any product they specialise in, allowing them to build comparative advantages, price their products more competitively and create well-paying quality jobs.

For African countries to enjoy these benefits, individual countries need to open up their markets to firms domiciled in other countries within the continent—something that the AfCFTA and other agreements signed within free trade areas such as Comesa and the EAC will greatly aid with.

However, for the process of integration in Africa to be successful, governments must let the private sector lead the charge but provide the right set of policy incentives and political support needed to get things done.

African firms must be allowed to freely develop supply chains across the continent. Moreover, there shouldn’t be unjustified fears over ‘foreign’ companies taking over local jobs, as cross-border trade and investment usually help foreign firms build symbiotic commercial relationships with local firms in different supply chains. These relationships ultimately build the capacity of local firms, allowing them to produce at scale and as a result create more jobs.

In Kenya, the private sector is ready to champion the regional integration agenda. This is the message I have gotten from my numerous interactions with business persons across the country. Businesses in both the corporate world and SME sector are keen to capitalise on the benefits of integration, but encounter difficulties doing so. One key difficulty is increased trade disputes.

Trade disputes within the EAC continue to put entire industries at risk. For example, since March 2018, Kenya no longer enjoys duty-free entry into Tanzania for confectionery products such as sweets, chocolate and chewing gum, despite EAC regulations allowing for this. In place of duty-free access, Dar has slapped a 25 per cent import duty on Kenyan confectionery products, rendering them uncompetitive in the Tanzanian market.

Tanzania’s adamancy to remove punitive import duties and reintroduce duty-free access for Kenyan confectionery is based on claims that Kenyan manufacturers rely on imported duty-free industrial sugar for production, hence gaining an unfair advantage over local Tanzanian business.

This, however, should not be an issue as other confectionery players across the region – and not just Kenya – also rely on importation of duty-free industrial sugar under the same remission scheme, since none of the EAC member states produces industrial sugar.

By introducing healthy competition, regional trade usually puts pressure on local industries to improve competitiveness. For example, the recent case of Ugandan eggs being cheaper than those produced in Kenya is a wake-up call to Kenya to address the competitiveness of its agroindustry.

We also need to identify the comparative advantages we enjoy as a region – such as a young labour force, recent investments in transport infrastructure and access to over 80 ports worldwide via Mombasa, among others – and leverage on these to develop joint import substitution plans.

There are a lot of products we import as a region that we can produce by ourselves at a lower cost, helping us build regional capacity, reduce trade deficits and strengthen macroeconomic indicators.

Importantly, much broader reforms are needed at a political level. This is because regional integration is generally more successful where there is minimal political and ideological difference among participating countries.

Tanzania and Kenya therefore need to work on their issues; but so, do Rwanda and Uganda, whose ongoing diplomatic stand-off has resulted in disruptions at their borders, impacting trade and investment.

Kiprono Kittony is the Chairman, Kenya National Chamber of Commerce and Industry This email address is being protected from spambots. You need JavaScript enabled to view it. This piece appeared in The Star on 29th April 2019.

Posted On Friday, 03 May 2019 09:40
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