By Chris Maclay

In Kenya, ‘Jua Kali’ has always been seen as informal, a sector where those who cannot be employed fall back to.  This has seen the populations in the informal settlements grow at a high rate.

Currently, in Africa, the informal sector accounts for 80% of the labour force, from plumbers, carpenters, gardeners, watchmen to housekeepers. Yet the vast majority of work is granted through ad hoc connections and this leads to low wages since the employers don’t know what they’re getting. The irregular work and few opportunities which they get has made it hard for them to build a proper career.

The trend is only widening because according to the Kenya National Bureau of Statistics (KNBS), Economic Survey 2018, of the 8,978,000 jobs created in Kenya in 2017, 88% were in the informal sector.

Despite the fact that 1.1 million casual jobs are delivered each month in Nairobi alone, the market for informal services is broken on both sides; service buyers constantly complain of low-quality work and unreliable professionals, and informal workers are plagued by uncertainty, low pay, and few opportunities for career growth.

According to the Institute for Economic Affairs, 2012, with of informal sector workers in Kenya aged between 18-35 years, the problems facing the sector are most acutely felt by the youth who are either entering or have recently entered the labour market.

In spite of these challenges, the scale of employment generation in the informal sector offers potentially the greatest opportunity to create new jobs for youth, as well as improve the quality of employment for young people operating within it.

Since this is sector is becoming a key area in the entrepreneurship sector which is now controlling almost 70% of the Kenyan economy, during a Media Policy Breakfast meeting, Lynk-Kenya an organisation established in 2015 explained how they have been able to harness the growth potential of this trend to create one of the largest gig-work platforms (an online resource to match people’s skills with needed work) on the continent.

Lynk has facilitated over 35,000 jobs to-date in Nairobi, and we look forward to working with the city’s artisans and fundis to drive the sector further forward.

As a technology platform for informal sector workers in Kenya, the organisation aims to provides the entrepreneurship infrastructure for these workers to be called ‘Pros’ and how they can succeed on a gig platform.

The goal is to bridge the broken market gap between informal workers (service providers) and clients (service buyers) utilizing technology. With little or no engagement with the digital economy, we’ve found that fundis and informal sector workers lack access to markets, customer service, and payment management skills, 

The foundations of Lynk were inspired by building digital career profiles akin to LinkedIn pages that showcased the credentials, credibility and proven track record of informal workers on our platform. But over time, we’ve learned that providing the technology to match people to jobs is not enough; too much can go wrong in such jobs, both for service buyers and service providers.

Lynk, therefore, does so much more to ensure that jobs go well, by building more and more elements of this ‘entrepreneurship infrastructure’ to enable Pros to thrive in the following areas: offering a suite of on-demand services from electrician, to beauticians - and businesses, offering facilities and project management services; identification of demand and market-driven pricing: ensure that there is a trusted interface between fundis and customers, so that someone can deal with problems that are faced, and that Pros are fairly paid and providing ‘starter packs’ for Pros, containing branded bags, clothing and protective equipment, high-quality tools, and materials.

We take on huge responsibility for the work of Pros, and for the training to get them to the right levels this is not easy for our hard-working customer service team. We also are unsure when we will need to stop building - how much ‘entrepreneurship infrastructure’ do we need to be able to build, in order to enable Pros to thrive on each job? This is a question that we will continue to answer in our mission. Regardless, we’re only getting started:

Chris Maclay is the chief operations officer at Lynk, an online platform that partners with Kenyan artisans to showcase and promote their products and services.

 

Posted On Thursday, 17 October 2019 12:20

By Joseph Wairiuko

On 20th June 2019, the Government launched the National Action Plan and Implementation Framework to Combat Illicit Trade in Kenya. This came at a time when illicit trade is becoming a National disaster as it impacts negatively to the wellbeing of the social-economic and political aspects of our People and Society.

Today, many in the population has become conscious of the things (illicit goods) that we are utilizing and consuming as a country amid rising cases of terminal diseases like cancer (health aspect) and road carnage (safety aspect) which is on the rise in the country.

When H.E. President Uhuru Kenyatta conceptualized the Big Four; food security, affordable housing, manufacturing and affordable healthcare for all, he did so in appreciation of the fact that for us to accelerate the achievement of our Vision 2030 aspiration, we would need to take a new approach to our medium-term planning, and focus to those issues that would have the greatest impact on the well-being of our people.

The Big Four Agenda is, therefore, the key driver to the implementation of the Third Medium Term (MTP3) in fulfilment of the Vision 2030. This MTP3 is being implemented on the foundations that have been put in place during the First and Second Medium Terms Plans. The Government is therefore focused on dedicating all her energy, time and resources in the implementation of the Big Four.

Kenya Vision 2030 was launched in 2008 as Kenya’s development blueprint covering the period 2008 to 2030. It was aimed at making Kenya a newly industrializing, “middle-income country providing a high-quality life for all its citizens by the year 2030”. The Vision was developed through an all-inclusive stakeholder consultative process, involving Kenyans from all parts of the country.

Over the last 10 years (i.e. up to 2018), significant progress has been made in fulfilling Vision 2030. This progress in the implementation of Vision 2030 through the First and Second Medium Term Plans has only been possible through the dedication and commitment from all Kenyans. The Government, the Private Sector and development partners have been instrumental in the progress made and will continue to play a critical role as we approach 2030.

It is on the above background that both the Government and the Private Sector unanimously agreed that the vice of illicit trade is the number one threat to the realization of the Big 4 Agenda and consequently the realization of the MTP3 and ultimately the Vision 2030 aspirations. During the May 2018 Presidential Round Table (PRT) with the Private Sector, it was realized that illicit trade is the immediate threat to a realization of a robust manufacturing sector in Kenya, which is the backbone for the creation of millions and millions of jobs opportunities for the Kenyan people and society.

Due to its nature, the manufacturing sector in one way or another is inter-linked with the other three Big Agenda of; food security, affordable housing and affordable healthcare for all through both forward and backward linkages as well as various job opportunities that it presents for the Kenyan population.

As a country, we need a collective action that will sustainably fight against illicit trade. During the PRT held on May 2018, H.E the President, in recognition and appreciation of this threat to the entire economy, appointed Mr Wanyama Musiambo to head and coordinate the enforcement against illicit trade in Kenya under a Multi-Agency set-up.  The Multi-Agency Team has made some positive impact in addressing this menace over the last one year through various sting and sporadic operations carried out across the country.

However, for sustainability purpose and according to best practice, this Action Plan has proposed a multi-agency framework to be anchored in the Executive Office of the President which will provide policy guidance, monitor the implementation of various sensitization programs against the various forms of illicit trade and report to the appointing authority on its achievements. This is a most welcomed move by the private sector as this assures all stakeholders that sustainability in the fight against illicit trade is guaranteed into the future as this war is not a one-off affair.

It must be noted that this Action Plan no matter how well it has been formulated, it will only be effective if all players and stakeholders do their part including the private sector, law enforcement agencies and our international partners. All stakeholders must, therefore, be committed to the full implementation of the Action Plan within the stipulated framework of 3 years from 2019 to 2022. The Private Sector and the international partners, in particular, must keep monitoring the implementation of the Action Plan and challenge the relevant Government enforcement institutions to play their respective roles in a timely manner.

The realization of the Big 4 Agenda and consequently the MTP3 is now in our hands. It is upon us to ensure that we utilize the remaining time effectively in the implementation of everything that is enshrined in the Action Plan. KAM remains committed to sustainably make the necessary monitoring and follow-ups with all parties in order to ensure that as a country, we fully implement the Action plan by the year 2022. Together, we stand strong to sustainably address the menace of illicit trade for the sake of the well-being of the entire Nation.

Mr. Joseph Wairiuko is the Anti-Counterfeits and Illicit Trade Officer at the Kenya Association of Manufacturers (KAM).

Posted On Thursday, 17 October 2019 11:34

Regulatory impact assessment is a tool to assess the potential or anticipated impact or a new or reformed regulation or legislation. A RIA should be undertaken prior to the introduction of new government regulation. RIAs are used in many countries, although their scope, content, role and influence on policymaking vary.

The role of a RIA is to provide a detailed and systematic appraisal of the potential impacts of new regulation in order to assess whether the regulation is likely to achieve the desired objectives. The need for a RIA arises from the fact that regulation commonly has numerous impacts and that these are often difficult to foresee without detailed study and consultation with affected parties.

Economic approaches to the issue of regulation also emphasize the high risk that regulatory costs may exceed benefits. From this perspective, the central purpose of RIA is to ensure that regulation will be welfare-enhancing from the societal viewpoint - that is, that benefits will exceed costs. RIA is generally conducted in a comparative context, with different means of achieving the objective sought being analyzed and the results compared.

We have compiled a few resources on regulatory impact assessments below:

RIAs have proved popular with governments trying (or trying to be seen) to improve the quality of their regulation. International studies, however, question whether a RIA process improves regulatory outcomes. This document assesses the Impact of RIAs in Australia.

Regulatory impact assessment systems bring evidence to bear on how to improve the quality of new or modified regulations. In the last 30 years, they have become increasingly common in OECD countries. Regulatory proposals put forward by government agencies are now required to have a firm evidence base that clearly supports the new or modified regulation. However, in all jurisdictions, actual practice has shown that the performance of the impact assessment systems has been very limited, with proposed regulation continuing to offer little in the way of a rigorous and convincing evidence base. This paper explores the reasons for the poor performance of evidence-based approaches.

This guide is designed to help policymakers carry out regulatory impact assessments of proposed new policies. It is designed with policy analysts and other government policymakers in mind. The principles and techniques outlined in this guide can also be applied when reviewing existing regulations and policies to see whether these continue to meet the Government's goals in an efficient and effective manner.

OECD analysis shows that conducting RIA within an appropriate systematic framework can underpin the capacity of governments to ensure that regulations are efficient and effective in a changing and complex world. Some form of RIA has now been adopted by all OECD members, but they have all nevertheless found the successful implementation of RIA administratively and technically challenging.

The above link is to research undertaken by the OECD on methodological issues and country experiences with the implementation of RIA and includes guidance material to improve the performance of RIA, its early integration with policymaking and the promotion of more coherent regulatory policy across government.

RIAs are widely used within the member countries of the Organisation for Economic Co-operation and Development (OECD), and an increasing number of developing countries are implementing new RIA procedures in their regulatory governance systems. This case study analyzes global unique data on RIA implementation worldwide, highlighting best practices and identifying areas for improvement.

This is the first draft of an introductory handbook for policy analysts undertaking regulatory impact analysis (RIA). It was prepared through the combined efforts of the OECD and FIAS/World Bank Group as part of a project to develop a collaborative publication on the application of RIA.

These Guidelines for RIA were prepared for the U.S. Department of Health and Human Services (HHS) Analytics Team. This guidance represents the current thinking of the Department of Health and Human Services (HHS) on the conduct of regulatory impact analysis.

These Guidelines are intended to aid individuals conducting RIAs and build on a range of other supports, including the RIA Network, training courses and presentations, and the RIA Helpdesk operated by the Better Regulation Unit in the Department of the Taoiseach.  For further information on RIA supports, please see www.betterregulation.ie. 

This Guide seeks to explain the process of law-making in Kenya. It is among the Kenya Law Reform Commission’s (KLRC’s) key contributions to the process of proper legislation at both levels of government. It aims at achieving the extensive goal of guiding the legislative process and facilitating law reform that is conducive to the social, economic and political development of Kenya.

Posted On Wednesday, 09 October 2019 11:05

By Dr Percy Opio

Unlike before when banking halls in Kenya would be synonymous with masses of people every end of the month, nowadays there are fewer people and most of the times they are empty. This is a clear indication that the banking sector has gone through a transformation.

This was made clear to me recently when my niece having known of my career in the banking sector told me that she has never visited her branch for the last one year and that she has been using virtual banking for all hr transactions.

For the past five years, a lot of efforts have been put by key leaders in the banking sector to drive the “virtual bank” agenda. In simple terms, a virtual bank is a bank that is not defined by the constraints of brick-and-motor – it exists anywhere, and services are accessible anytime.

When I published a book on “The Future of Banking in Kenya” four years ago, I identified possible development scenarios that might change the banking sector. The key driver of these scenarios is the customer experience.

And the three developments scenarios in regards to the current banking environment are:

From Alternative Channels to Omni-channels

The omnichannel model seeks to ensure that the customer has a unified and seamless experience to services they need regardless of the channel. The channel could be the mobile device, an internet portal, agent or even the branch where necessary. While achieving 100% unified experience may not be possible, there have been developments towards unifying the experience between internet banking and mobile banking. While this has not been widely adopted, some key banks have ensured that mobile banking and internet banking experiences are seamless as they drive the shift from the banking hall to the digital platforms. It’s now possible to open accounts, buy insurance, make any kind of payments, speak to a bank agent, apply for standing orders, pay utility bills, and many more. Fortunately, today, the need to visit a bank branch is reducing at a remarkable speed.

The Dual Personality Bank

This concept implies that while the bank continues to meet regulatory expectations from CBK, the bank redefines itself to the customer. The “dual personality” concept is for log-term gain and should be used to attract the critical youth mass who are the customers of the future. This perspective has more to do with adopting disruptive models through emerging technologies that make the bank attractive to the younger generation. While there have not been many developments towards this end, we are beginning to see banks adding non-financial services in their digital platforms. For example, it is now possible to hail a cab from one of the mobile apps of a leading bank.

Open Banking

Open banking is similar to what is now commonly referred to as platform banking or bank- as-a-service. This allows other fintechs to connect to their banking platforms through Application Programming Interfaces (APIs) to offer financial solutions to a wide range of the population. This has taken traction in the Kenyan market as we see banks partnering with tech companies to offer revenue management solutions to county governments. Banks are also partnering with tech companies to offer school management solutions, digital payment solutions and supply chain management solutions.

While these applications offer core business functionality to the customers (schools, counties, suppliers, etc.) payments services are integrated with the banking system and automated. This model has proved to be an effective way of mobilizing deposits. It is now normal for banks to partner with Mobile Network Operators (MNO) to offer financial services that can scale rapidly through the MNO’s mobile platform. For example, Fuliza - a partnership between Safaricom on one side, and KCB and CBA (now NCBA) on the other – is a classic example of banks scaling through API integrations. This is arguably the “headline of today” in financial services, and maybe a space to watch as the product has the potential for much more in an environment where there is a credit crunch. 

Has Virtual Banking had an Impact in the banking sector?

Virtual banking which is as a result of digitalization has made it easier and more convenient to access financial services. Digitalization has induced efficiency, effectiveness and transparency into the financial services value chain – public sector, education, supply chain, amongst others – as payments processes have been automated. It is with no doubt that customer experience has improved. It is possible to not to visit a bank for even a year – banking is something we do.

However, there is still a long way to go for banks to be able to scale on their own. While Kenya Bankers’ Association introduced an inter-bank app – Pesalink, this has not scaled to the masses and seems more inclined to bankers. The effect of some fintechs setup as bank subsidiaries have not yet been felt in the masses, and headlines of growth through brick-and-motor acquisitions and mergers continue to scale the banking environment.

Scaling through partnerships like M-Shwari and Fuliza have only focused on credit facilities, while this is a core aspect of banking, banks have more to offer than just credit. What may seem certain is that the future of virtual banking may lie in open banking – banks will need to partner with fintechs and other players to open up their services to both niche and mass markets. This gives them the agility needed and the opportunity to apply “dual personality”.

Dr Percy Opio is the author of: “The Future of Banking in Kenya.” He has over 20 years’ experience in the ICT field, 10 of which were spent at Equity Bank at management and senior management levels.

Posted On Thursday, 03 October 2019 09:45

On the 8th and 9th of October 2019, the Business Advocacy Fund will hold a workshop on preparing policy position papers.  The workshop will involve taking an actual issue, with research evidence and pulling together an early draft of a policy position paper.

Along with the handbook - Preparing policy positions - participants will review the following policy position papers and are urged to download them.

Policy position papers

Advancing health through safe and sustainable blood transfusion Regional Society for Blood Transfusion Kenya (RSBTK)          

Saving lives through improved emergency medical care  Kenya Council of Emergency Medical Technicians (KCEMT)

Managing solid waste safely Kenya Alliance of Resident Associations (KARA) and Kenya Association of Manufacturers (KAM)

Government imposition on co-operative governance Kenya Union of Savings & Credit Co-operatives (KUSCCO)

Research report

We will then take a research paper prepared for the Law Society of Kenya looking at regulatory impact assessments, The Statutory Instruments Act, 2013, prepare a critique and then use the research paper as the basis for a policy position.

Posted On Friday, 27 September 2019 17:33

By Ibrahim Alubala

The ongoing debate around the division of revenue between the national and county governments is an eye-opener and a stark reminder to the counties that they should begin to think about generating their own revenue as anticipated by Article 209(3) of the Constitution.

ESTABLISH BOARDS

While the Constitution anticipates that at least 15 per cent of the most-recently audited accounts of government revenue should go to counties to support their operations, many devolved units are still in financial limbo, unable to pay workers and run their affairs.

But what can counties do when most rely on national government remittance to support their operations? It is noteworthy that own-source revenue for most counties averages less than 10 per cent of their overall budget.

The National Treasury, in its budget policy statement last year, observed that administrative inefficiencies and gaps in policy and legislation contributed significantly to the low levels of own-source revenue in the counties.

President Uhuru Kenyatta recently urged counties to reap where they sow, saying there is no more money to allocate to their increasing needs. How do counties begin to look internally to collect their own revenue?

Secondly, they should develop policies and legislation to assist in revenue collection. A number of counties are yet to legally institutionalise revenue collection mechanisms within their jurisdictions, for example by developing revenue administration legislations to establish boards or even directorates to streamline the collection of revenue.

MINIMISE LEAKAGES

We have witnessed cases where counties collect licence fees, cess and other forms of levies without requisite legislations. Any spirited taxpayer within the county can legitimately challenge that.

Thirdly, it is imperative to enhance public participation on matters of revenue allocation. Bungoma County, for instance, involved local boda boda riders in their Finance Act 2018. The riders, who initially found it problematic to pay daily operation fees of Sh30 to the county government, opted for a Sh500 annual fee. This year, Bungoma has experienced an increase in compliance from the riders, who now say they enjoy paying for the licence and anticipating services from the county. Public participation is a national value as stipulated by Article 10 of the Constitution.

Fourthly, counties should automate revenue collection to minimise ‘leakages’ caused when people handle money. When I recently visited Uasin Gishu, I was able to pay my parking fee through a paybill.

Lastly, they need to step up enforcement against tax and rate defaulters. The process can be incentivised through waivers for a limited period to allow the affected to comply.

Own-revenue will allow counties to sustain their operations and ultimately inch towards greater development.

Mr Alubala is an advocacy and child rights governance technical specialist at Save the Children. This email address is being protected from spambots. You need JavaScript enabled to view it. @ialubala

Posted On Tuesday, 17 September 2019 14:18

By Robert Shaw

The setting up of the earlier sugar factories such as Nzioa, Muhoroni, Sony and Mumias in the 1960s was driven by two main objectives: To help make the country more self-sufficient in sugar, and to create job opportunities in large swathes of Nyanza and Western provinces, where unemployment was high.

SEAS OF POVERTY

Today, more than 50 years later, neither objective has been achieved. Kenya still imports around a third of its needs, while vast areas, especially around the factories, are seas of poverty. It is estimated that over 5 million people are dependent, in one way or another, on the sugar industry, and many of them live in deprivation.

The main reason for the failure was that they were government-driven and controlled. In turn, they literally became victims of assorted political machinations, including patronage, nepotism and corruption.

Like many parastatals, they were pillaged and sucked dry of their productive qualities and were kept alive with government bailouts.

Nevertheless, these entities remain decrepit and function way below capacity.

Even outdated productivity yardsticks were used. For example, cane was paid for by weight rather than by sucrose content. This meant that the same amount was paid for old cane as the younger, much sweeter cane.

Bad habits like zoning crept in, meaning, certain areas planted with cane became the preserve of certain factories, equating to modern-day serfdom.

MERITOCRACY

Over the years, there have been various stabs at reviving the mixed fortunes of these operations, to little avail. The time has come for the government to seriously address this shameful blot on our economic and social landscape that consigns so many people to poverty and deprivation.

A coherent plan of action needs to be implemented, and must involve several key guidelines.

First, the privatisation of these sugar factories should focus on getting the best for them and those working for, or with them. That means successful bidders, both international and local, should satisfy the fundamental criteria of adequate financial means, commercial capability, the ability to develop nuclear estates, and of course, sustain and support farmers. The latter should be focused on buying the cane at the optimum time and paying farmers on time.

If the last two are fully adhered to, cane shortages and zoning would be things of the past.

To put it more bluntly, the exercise must be based on meritocracy rather than on quick-fix solutions and machinations often agreed upon in opaque circumstances.

POLICY FRAMEWORK

This means harmonising the activities of the Privatisation Commission with the Sugar Task Force Report so they speak and act in unison. At the moment, the sad irony is that they are almost in competition.

County governments must also live up to their responsibilities in maintaining the relevant sugar-belt roads. Financial support for this could come from the reinstatement of the Sugar Development Levy.

It goes without saying that this operation must adhere to strict accountability rules to ensure that money collected goes directly to road maintenance and is not diverted to other areas.

But a line in the sand must be drawn between this and the actual running of the factories. Under no circumstance should the county governments be involved in the day-to-day operations.

Ditto goes for national government. The role of the central government is to provide the right policy framework and an enabling environment for these revamped operations to function and grow, not to be involved in their commercial operations.

Conversely, the running of these milling operations should not involve other non-core activities such as importing sugar or being allocated sugar importation quotas. Imports should be handled by such bodies as the Kenya National Trading Corporation and must be separate from manufacturing.

Particular emphasis should be placed on both price and comparative standards. When subsidies and bailouts are factored, the cost of production for some Kenyan sugar is among the highest in the world.

The above proposals should, and must, massively bring down production costs to become comparable to those in, say Mauritius and Kenana in Sudan.

In conclusion, it is clear that a competitive and transparent privatisation process must be conducted to transfer these limping operations from the clutches of government to commercially competent owners and managers. Last, but as important, national and county governments must be completely delinked from involvement in their operations.

If the above is carried out, there is a very good chance these moribund operations can be restored and in turn make a significant contribution to filling the gap between demand and supply.

Mr Shaw is a public policy and economic analyst: This email address is being protected from spambots. You need JavaScript enabled to view it.

This piece appeared in the Daily Nation on August 30th 2019

Posted On Thursday, 12 September 2019 15:41

By Michael Arum

The sugar sector employs over 250,000 Kenyans and supports six million livelihoods. Yet it has become one of the country’s loss-making ventures. Not because the industry is not viable and that farmers do not have the experience and skills, but because government policies are overriding a free and fair market system, breaching the Competition Act, 2010.

The Act advocates market forces, promoting effective competition and preventing unfair and misleading market conduct, and specifically prohibiting dominant undertakings and restrictive trade.

Yet the proposed Sugar Regulations, 2019, have no element that upholds these requirements, instead creating a buyers’ market – known as a monopsony - that will lead to the final death of Kenya’s sugar sector.

At the heart of ‘fixing’ the sugar industry is zoning, renamed cane catchment areas. This forces sugar farmers to register and then assigned one mill to sell to. The results will be irreparably damaging to Kenya.

By giving all the sugarcane buying power in a region to a single miller, the government is indirectly granting them absolute control over prices and farmers’ income too. Indeed, millers can treat their supplying farmers however they like, pay slowly, pay late, shift prices, demand off-sets, they can do anything, because there will be nowhere else any farmer can go that won’t be illegal. All competition has been ended.

It’s a policy-based redistribution of power that raises questions about why the Kenyan government passed the Competition Act in the first place. If the ideal way to rescue an ailing uncompetitive industry was to override all market forces, why was a competition policy commitment put onto the nation’s statute?

In the current climate of asserted determination to end corruption, its new regulations, furthermore, appear filled with opportunities for rent seeking, across requirements for letters of comfort as confirmation of commitment by investors to install a factory, special approvals, permission-based registrations and extra licences.

All of these are put in without justification, but all of them grant government employees power over industry players. Numerous extra barriers to market entry have been added too. No Kenyan can produce sugar seeds, grown sugar, process sugar, transport it, distribute or wholesale it with any normal business licence, but must now go through complex bureaucratic registration processes that include exorbitant licensing fees.

In the end, for sugarcane farmers and their dependents, the sum is set to be grave for it will be very expensive or near impossible to transition into alternative crops. This will open up a bigger trade deficit as Kenya imports even more sugar. Additionally, centralising sugar processing operations to millers will lead to further operational inefficiencies such as arbitrary deductions during ploughing, delayed services such as seed cane provision to farmers, harvesting and cane transportation.

If the country were to allow the forces of demand and supply to prevail – as the Competition Act specifies – with minimal government control, we would achieve far better results.

The writer is co-ordinator, Sugar Campaign for Change.

Posted On Thursday, 12 September 2019 14:44

By Manass Nyainda

Devolution, in its form and substance, was robustly canvassed in the making of the 2010 Constitution.

It was proudly received by Kenyans who had borne the brunt of concentrated executive power, as the ultimate antidote to the skewed distribution of national resources that mainly depended on patronage, cronyism and tribal affiliations to the man in power.

PEOPLE-CENTRED

However, the spirit was immediately dimmed after county governments effectively came into operation. This is because they were riddled with unbridled corruption, nepotism, ineptitude and arbitrary and unilateral decision making.

This unilateral decision making on behalf of the people has been one of the most fundamental springs of the failure of the county governments to effectively and efficiently provide public services.

It therefore goes without saying that public policy is at the nerve centre of running any nation. It cuts across all spheres of governance; economically, socially and politically.

Climate change, environmental conservation, healthcare, security, education, and agriculture, among others, are important global policy issues.

However, touted as the most economically and socially flourishing devolved unit, Makueni County is an outstanding testimony of what people-centred, need-based, practical and innovative public policy decision and implementation can do in transforming the lives of the people.

From the ultra-modern Mother and Child Hospital with 200 bed capacity in Wote, the state-of-the-art Kalamba Fruit Processing Plant to other magnificent infrastructural milestones, Makueni County has redefined service delivery.

This is because it has adhered to the conventional but basic tenets underpinning progressive public policy development. That is, bottom-up public participation approach, empirical evidence informing the process, and responsiveness to the needs of gender equality.

LEGAL REGIME

Article 10 (2) (a) of the Constitution and the Fourth Schedule Part 2 (14), stipulate public participation as a function of county governments. Further, Section 87 and 115 of the County Government Act, 2012 outline the principles and framework of public participation.

Even though there is an existence of a legal regime to put public participation into operation, most county governments have stopped at nothing but tremendous failure in fulfilling this solemn mandate.

It is important that bureaucrats who make public policies on behalf of the wananchi pose and ponder the magnitude of the effects that those policies have on the people.

It would be imperative then that those whom the policy is going to affect are involved in every possible stage of the policy development and implementation for their input extensively enriches policy decisions.

This will not only inspire a sense of belonging, it will also be the basis for project prioritisation in accordance with the needs of the locals, building of consensus and coming up with people-centred innovative solutions. Makueni has designed a participation framework tailor-made to suit the respective groups of people and their demographics within the county and its outcome has been amazing.

As an enquiry into the nature of the problem that public policy seeks to address, policy research for acquisition of data is a critical element in policy development.

Every policy must be informed by data to establish the viability of the solutions proposed, consistency of the outlined interventions, evaluation of alternatives at hand, and prediction of possible outcomes.

EQUALITY GAP

While we struggle with the ramifications of gender inequality, it is increasingly becoming clear that most public policies in place are insensitive to the women gender. And yet, we cannot achieve sustainable socioeconomic development when almost half of the population is still lagging behind in almost all spheres of life.

In order to mainstream our women in governance, public policy decisions must seek to bridge the existing gender equality gap. Hence, breaking the structural hindrances erected by gender insensitive policies is key in promoting women’s growth socio-economically.

Either intentionally designed to fail or occasioned by inevitable circumstances, the systemic blunders and missteps in policy formulation and implementation can be extremely detrimental. Hence, every single step must be handled with the interest of the public at heart.

We must stand up for policies that promote humanity. Any single public policy decision made today fundamentally determines the course of life tomorrow. County governments must take the lead in revolutionising public policies for the betterment of the people.

Mr Nyainda writes on topical issues. This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Thursday, 12 September 2019 14:07

By Edward Sigei

In the last few weeks there has been a raging debate about the entire system of royalty management since the music collecting societies - Kenya Association of Music Producers (KAMP), Performers Rights Society Kenya (PRISK) and Music Copyright Society of Kenya (MCSK) - distributed their royalties.

Some artistes accused the collecting societies, otherwise also referred to as collective management organisations (CMOs), of inefficiency while others alleged that they were corrupt.

Some members of the public wondered if they should exist at all, questioning the basis of their existence in law.

Some users accused the organisations of harassment and application of outdated methods of collection. Others doubted if they paid their members or rendered accounts.

The reason for the existence of collecting societies is that whereas majority of the rights available under copyright are managed by individual or corporate rights holders, there are some rights that cannot be managed individually for practical reasons.

EFFICIENCY

Those rights must, therefore, be managed jointly or collectively, hence the name collecting societies or collective management organisations.

They are managed by members who authorise them to manage their works in return for a share of the payment of royalties collected.

To enable efficient management of rights and offer easy access to artists’ work, the copyright laws of Kenya provide for their establishment.

Currently, we have collecting societies for music authors (MCSK), producers (KAMP) and performers (PRISK).

Actors are also represented by PRISK while publishing or reprography is represented by Reproduction Rights Society of Kenya (KOPIKEN).

Collecting societies are private entities registered as companies limited by guarantee.

TRANSPARENCY

They are licensed annually and regulated by the Kenya Copyright Board (Kecobo). Having been licensed, their tariffs are published after a fairly rigorous process with public participation.

As far as the recent distribution is concerned, the societies collected Sh118 million and distributed Sh80 million, representing 68 per cent of the collections.

As such, they performed extremely well with the distribution nearly matching the obligatory 70 per cent compared to 54 per cent; 24 per cent; 13 per cent for PRISK, KAMP and MCSK respectively for last year.

This performance follows measures put in place by the regulator to ensure transparency in collection including the joint invoicing and deposit in a common supervised account.

The measures have partially sealed some loopholes that led to revenue leakages and cut unnecessary costs.

PAYMENT COLLECTION

The anticipated passage of the Copyright Amendment Bill, 2017 will assist Kecobo to further stamp its authority on the management of these societies.

As far as collection methodologies are concerned, these are similar to those of other collecting societies globally.

Tariffs are set and collected by amongst others, taking measurement of the premises, counting seating capacity and considering number of items that play music.

The societies’ staff visit to collect payments. The process of assessment of premises is perilous to the staff of the societies and is considered a nuisance by some users.

As a result, compliance by users is very poor in all sectors. This partly explains the amount distributed by MCSK and other societies.

COMPLIANCE

Users have complained about the tariffs stating they are quite high and proposing their own procedures for determination of tariffs.

The suggestions have not received traction with collecting societies as they are afraid of losing royalty income. The impasse often leads to unnecessary litigation.

The historically poor compliance places a heavy burden on the few that the collecting societies can reach to make up for the rest who fall through the net.

This thereby creates an endless cycle. Sadly, those who have not complied were the loudest critics about the poor pay to artists.

The poor compliance represents a big threat to artists’ rights as it puts into question the future of these organisations.

The societies must adapt to local and technological realities.

The payment of copyright dues is clearly a new concept to many business owners who use copyright works. It is hard for them to understand and comply.

TECHNOLOGY

Technology has the potential of providing the collecting societies with new tools and approaches to collection of royalties.

Kecobo has been toying with methods of collections that do not involve direct contact with the users and the use of police in enforcement.

These include imposing a music levy on food and hotel establishments to be collected in the same manner as catering levy; music levy on alcoholic beverages; a subscription model for media houses that pays for every song played and a flat royalty at NTSA license desk.

Universities can collect a nominal fee for the photocopies done in the campuses in favour of book authors’ royalty. Any shortfall can be made up from flat rate collections.

Subject to an impact study and the setting of appropriate fees on those platforms, the implementation can be as soon as next year.

Of course, the realisation will depend on other government agencies and ministries, especially the Treasury approving.

If this is implemented, there is reason to believe that the amount of royalties payable to artists can consistently grow while businesses can run smoothly. This system will finally deliver for artists an important campaign promise.

Mr Sigei is the executive director, Kenya Copyright Board. This piece appeared in the Daily Nation on 27th August 2019.

    

Posted On Thursday, 12 September 2019 11:24

By Robert Komu

The world marked the International Day of Cooperatives on the 6th of July this year. In Kenya, the day was not marked with any fanfare or celebration in the sector unlike other parts of the world. This is a sad state of affairs bearing in mind the integral role cooperatives play in the economy. The day was set to remind the public that cooperatives across the world continue to help preserve employment and promote decent work in all sectors of the economy.

Cooperatives have been around for now 200 years, since the proposed "villages of co-operation" in the United Kingdom as a response to the economic crisis in 1815. The idea spread was adapted, and went global, with around 1 billion members of cooperatives worldwide today. In Kenya, the first cooperative Society was established in 1908 with the government formally getting involved in 1931. Since then there has been several developments and legislations in the sector which have led to exponential growth, a lot more still needs to be done.

Kenya is estimated to have over 14 million people in cooperatives; with about three-quarters of the population which nears 30 million depending on the activities of cooperatives and Saccos either directly or indirectly for a living. The cooperative sector has played a key role in directly employing over 500,000 people. Sacco’s today account for 80% of the total accumulated savings while Kenya’s sub-sector is the largest in Africa.

In recent decades, co-operatives have made tremendous contributions to millennium development goals, through the generation of income for their members and also offering a range of benefits which has led to their inclusion in the development conversation. Their role was recognised within the development community when the UN declared 2012 as the International Year of Co-operatives. Consequently, this has had far-reaching effects; a good example of this is the UN's Food and Agricultural Organisation noting that cooperatives have been and are key to feeding the world.

Cooperatives worldwide offer a dynamic and flexible business model that bridges market values and human values. Due to this, they have a very integral role to play in the frameworks for inclusive growth; however, they are faced with a myriad of challenges that prevents them to thrive and offer better value. For instance, in the 1960 and 70’s due to high expectations and being seen as integral and major players to development, there was a lot of government interference which led many to fail and were, as a result, written off by most development agencies. Government interference is still rife in the sector.

This interference by government today is through over-control and regulation. Cooperatives are often subject to burdensome regulations with high cost and time burdens associated with setting up a cooperative. A robust legal environment with prudential regulation needs to protect democratic member control, autonomy and independence, and voluntary membership.

At the same instance, many agencies working with cooperatives do not recognise or understand their specific governance and legislations, thus the challenge of fighting back laws that do not support the growth of cooperatives. In 2018, Kenyan co-operatives lobby groups opposed the proposed changes to the Co-operative and Sacco Act, which intended to give members with enormous resources powers to moot and control investment plans and returns from their investments; this would have been detrimental to the principle of one man, one vote and equitable distribution of returns in Sacco’s and co-operative societies.

The Industry, Investment and Trade ministry also opposed the proposals contained in the Statute Law (Miscellaneous Amendments) Bill 2018 saying they risked creating a parallel class of investors within Kenya’s co-operative movement.

This said the delays in concluding the cooperative policy-making process are now impeding the growth and management of cooperatives in the country. This kind of confusion prevents the growth of a sector that has a great experience in building sustainable and resilient societies, For example, agricultural cooperatives have been at the heart of ensuring the longevity of the land where they grow crops through sustainable farming practices. Consumer cooperatives increasingly support sustainable sourcing for their products and educate consumers about responsible consumption. Housing cooperatives help ensure safe and affordable dwellings, while Worker and social cooperatives across diverse sectors i.e. health, communications, tourism, aim to provide goods and services in an efficient way while creating long-term, sustainable jobs.

It is therefore important to give the utmost support to the  cooperatives sector, the core principles and values of voluntary and open membership, democratic member control, economic participation by members, autonomy and independence, education, training and concern for the community that guide the sector is pivotal to member and economic development of the country .

The writer is a communication consultant and a supporter of the cooperatives movement.

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Posted On Wednesday, 31 July 2019 14:47
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