Cooperation with the Private Sector in Kenya

Transcription

1 Published by Cooperation with the Private Sector in Kenya Country Report 2013 Highlights A DPP with the tyre and cement industry has resulted in new Waste Tyre Management Regulation to be tabled before Parliament shortly The Code of Ethics for Business was successfully introduced in Kenya. Private sector organizations in Uganda and Tanzania expressed an interest for introduction in their respective countries. A new DPP with Strathmore University facilitates the establishment of the East African Competence Centre for Renewable Energy and Energy Efficiency in Kenya. It will include the first case for a standard Power Purchasing Agreement (PPA) with Kenya Power. Kenya has maintained economic growth regardless of fiscal pressures, a new decentralised system of governance and rising security costs associated with operations in Somalia. According to the projections by the World Bank and the International Monetary Fund (IMF), the economy is expected to grow at about 6% this year, more than the 4.6% growth rate recorded in Inflation increased to 8.3% in September, from 4.5% in February, after the government imposed value added tax on a wide range of goods that were previously tax free. The first election under the new 2010 constitution has taken place in March 2013 and brought an improvement in political stability. The Supreme Court s endorsement of the election results, the opposition s acceptance of the judge s ruling and the institutional strengthening provided by the new constitution reinforce the perception that instability will diminish. As a result increased investor and business confidence is expected. Collaboration with the private sector featured in Kenya since many years and picked up speed with the economic liberalization. A stronger, more involved and responsible private sector is emerging. The Vision 2030, which is Kenya s long term national planning strategy, sees the private sector as the key actor for the development of the country s economy. With the new vision has come a serious appetite for Public-Private-Partnerships (PPP). Still, the question remains whether Kenya s public sector can be trusted to BMZ focal areas in Kenya 2013 Health, with a focus on reproductive health and financing Private sector development in agriculture Water sector development deliver on its commitments. The PPP-Bill is a milestone to integrate the private sector for development. However, according to the new constitution, the counties will have more responsibility in the implementation of this bill. It will be important to bring the Development Partnership (DPP) agenda at the county government level with practice oriented show cases in order to promote the concept. GIZ is fully aware of the potential for cooperation with the private sector in East Africa. An attempt has been started in July 2013 with a workshop in Nairobi to define innovative cooperations by identifying industries that bear a significant market potential for cooperation with the private sector. Promising sectors in terms of growth and cooperation potential between private and public partners are energy as well as agriculture. In order to better assess the potential of these industries and to sketch first ideas for cooperation projects, GIZ has formed joint working groups for each of the sectors. The Africa Facility s (AF, see box) work with the private sector has continued successfully in The partnership with the Kenya Association of Manufacturers (KAM), Kenya Private Sector Alliance (KEPSA) and Ethics and Anti-Corruption Commission (EACC) had resulted in the joint Code of Ethics for Business in Kenya, which was launched in Following its successful introduction in Kenya, requests have been made from Uganda and Tanzania to learn from Kenyan experience and duplicate and adapt the code in these countries. The code aims to promote ethical behaviour in business relations on a voluntary basis and is hosted by KAM which also hosts the United Nations Global Compact Network Kenya (GCNK). Photos: GIZ

2 Engaging in development partnerships with the private sector Development partnerships with the private sector (DPPs) are projects jointly planned, financed and implemented by businesses, GIZ, on behalf of BMZ, and other partners, such as state and civil society actors. A DPP combines business interests with development objectives for the benefit of all partners. The project partners share the costs and risks equally. GIZ partners with companies that respect key social and environmental values and in order to ensure the viability of DPPs have sufficient financial and operational strength to be able to deal with difficult situations in a fragile environment. There are several possibilities to cooperate with GIZ in a DPP: The Africa Facility is specifically designed for enterprises which are based in Africa. It currently operates in 9 target countries: Cameroon, Ghana, Kenya, Mozambique, South Africa, Tanzania, Tunisia, Uganda and Zambia. The BMZ programme developpp.de is designed for German or European companies and covers partnerships in Africa, Asia and Latin America. Additionally, GIZ technical cooperation projects worldwide engage in integrated development partnerships (idpp). Project sizes are individually agreed and the DPP must address an issue of interest for the respective GIZ programme. For more information please contact dpp-africa@giz.de The BMZ commissioned study Inclusive Business Policies How governments can engage companies in meeting development goals has been presented to the G20 Inclusive Business Workshop Africa that has taken place end of October 2013 in Nairobi. This was the last event of the G20 Inclusive Business Workshop series, where businesses, investors, representatives of development agencies and governments meet with the winners of the G20 Challenge on Inclusive Business Innovation. The aim is to foster the spread of inclusive businesses through showcasing successful examples, developing solutions to their growth challenges, and encouraging new business relationships. GIZ s Competence Centre Cooperation with the Private Sector Kenya has supported the organization of this forum. Concrete and immediate impact results from the DPP with Kenya s tyre and cement industry and the relevant public sector authorities (National Environmental Management Authority, Kenya Revenue Authority, Kenya Bureau of Standards) on management of waste tyres. A viable business model and related regulation have been developed and consulted intensively. The model is inclusive of the informal waste collectors and will result in much reduced health hazards and environmental harm resulting from open burning of tyres. Regulation will be tabled before Parliament early A new partnership was launched between GIZ and Strathmore University beginning of July The aim is to establish an East African Competence Centre for Renewable Energy and Energy Efficiency. Key activities will include development and institutionalization of advanced solar PV training courses and training for energy auditors, promotion of energy efficiency and conservation in the industry; awareness creation on grid-connected solar PV systems; policy advocacy to grid-connected RE systems and improvement of solar PV quality standards. In addition a 600 KW grid connected rooftop solar PV will be constructed at Strathmore University. This is strongly supported by the Ministry of Energy and will be a first show case for a standard Power Purchasing Agreement (PPA) with Kenya Power. Focal area 1: Health The majority of Kenyans are excluded from good health care. Less than 25% of the population has health insurance and only 10% of Kenyans have access to adequate reproductive health services. Life expectancy of the poor population is falling. Since 2004, the Kenyan Government drives a reform process aiming mainly at a socially equitable financing system and higher service quality. Cooperation with the private sector forms an integral part of the implementation strategy, including service provision, infrastructure financing and operation, health insurance funding or workplace programmes. The GIZ Health Sector Programme (HSP) focuses on health financing by supporting the move towards universal health coverage. In particular, the programme supports the reform process, institutional framework as well as the building up of a sustainable and harmonized health financing system while addressing financial access barriers for the informal sector and the poor. The devolution process in Kenya brings a decentralised governance structure also for the health sector, which will impact on the HSP s support to the PPP Unit in the Ministry of Health. GIZ and the Swiss Tropical and Public Health Institute have adapted a tool that projects the costs and benefits of employee wellbeing programs to Kenyan conditions. Originally developed by GIZ Ghana, the Cost-Benefit Projection (CBP) tool assists employers to calculate the loss of productivity in terms of costs associated with workdays lost. It provides information about productivity losses (workdays lost) per disease and computes the cost implications, it facilitates risk analysis of different health developments and it provides management an opportunity to test the cost-benefit ratio of different intervention options. The CBP can also be applied to monitor the cost and efficiency of concrete workplace interventions. It is applied on a pilot basis in 3 workplaces in Kenya, including the private sector and the public sector. 2

3 Focal area 2: Agriculture With 70 % of the workforce most of it informally occupied in agriculture, the sector is by far the most important employer in the country. Growth in agriculture could be much higher but the existing potential for rural development and poverty alleviation is not fully utilized. Additionally, the potential of the private sector in production and capacitation is not yet fully exploited. The regulatory environment for private sector participation is cumbersome and its institutions are weak, except for export oriented industries. The GIZ programme Private Sector Development in Agriculture (PSDA) has supported the development of the Public Private Partnership strategy for the agricultural sector, which is organized through the Agricultural Sector Coordination Unit (ASCU) under the participation of different stakeholders. The strategy helps to enhance cooperation and create common understanding on how to work together to develop the agricultural sector in Kenya into the innovative, commercially oriented and internationally competitive agricultural sector as envisaged by the Vision With support of PSDA, the initiative Innovation Transfer into Agriculture strives to link research with business. GIZ is an important partner to the new project implementation unit hosted by the International Centre of Insect Physiology and Ecology. The main objective is to bring research results into practice and foster collaboration between research and the private sector. Until mid-2014, the program screens existing research and evaluates the research needs of different agriculture sector stakeholders to come up with recommendations for future projects for linking research with practice. In addition, the Agriculture Programme is involved in the German Food Partnership (GFP), a group of leading German businesses and associations with the objective to promote sustainable growth in the agricultural production and the food sector. In cooperation with GIZ, the GFP has started the Potato Initiative Africa (PIA). This project will develop a comprehensive and scalable approach to establish competitive potato value chains. PIA will improve productivity and postharvest management through suitable, modern technologies and especially benefit smallholders through inclusive business models. The GIZ Agriculture Programme will be a key implementing partner and play an important role in facilitating this multi-stakeholder initiative. Focal area 3: Water East African Renewable Energy and Energy Efficiency Competence Centre Collaboration with Strathmore University provides unique opportunity to advance renewable energy in Kenya The East African region faces substantial energy scarcity, fuelled by growing population and economies, high reliance on large-scale hydropower with the associated vulnerability to droughts, and insufficient investment in power generation. Frequent power rationing leads to high economic and social costs. Yet, the region is endowed with abundant renewable energy (RE) resources, in particular solar energy and a large potential of energy efficiency and conservation (EE&C) measures. Inadequate policy and regulatory frameworks, capacity gaps in the field of RE and EE&C in terms of project design, development and maintenance, shortage of energy auditors or insufficient awareness by the public and private sectors need inhibit progress. Strathmore University, a leading private university in Kenya established in 1961, aims to establish a Regional Competence Centre on Renewable Energy and Energy Efficiency Technologies in East Africa. The university will build a 600KW solar photo-voltaic (PV) power plant on its campus, to be used as a sample case for the negotiation of standards and guidelines for grid-connected PV-systems with Kenya Power and the Ministry of Energy (e.g. feed-in-tariffs, net-metering, electricity banking, industry licensing and certification). Practical training of students and post-graduates as well as awareness creation for commercial investors and government policy makers in the East African Region will be provided. The Competence Centre will also embed the current German Solar Academy (GSA), a partnership between GIZ and German companies Energiebau and SMA in Kenya, to train local companies on design, installation operation and maintenance of PV systems. A first Power Purchase Agreement with Kenya Power is expected to be entered into, outlining standards for PV system components, PV installation, grid connection and operation and maintenance. At least 200 engineers from the East African region will be qualified in the installation, operation and maintenance of advanced solar PV systems and a qualification for Certified Energy Managers will be introduced. It is estimated that 200 industry energy managers from East Africa will be trained and certified. Compared to other sectors, private sector participation in the water sector is relatively far advanced, especially in respect of service delivery. The 2002 Water Act observes internationally 3

4 Contact Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Aregash Asfaw E aregash.asfaw@giz.de recognized principles, such as the separation of policy and regulation from ownership and operation. With additional funding from the International Water Stewardship Programme (IWaSP), a partnership was set up between the GIZ Water Sector Reform Program (WSRP), Imarisha and the Water Resource Management Authority (WRMA). The Imarisha Naivasha Water Stewardship Project 2013 supports the restoration of the Lake Naivasha Basin with soil and water conservation measures, improves access to water for local communities, decrease conflicts amongst water users and enhances the hydrological monitoring in the basin. In collaboration with 12 local Water Resources User Associations (WRUAs) and the Naivasha Basin Sustainability Initiative, projects have been identified that improve the water balance in the Basin and reduce conflicts amongst the water users. UK retailers contribute 25% of the initiatives budget. The Nairobi Water Roundtable Working together for sustainable water in Nairobi took place from 10 th to 11 th September This public-private initiative, spearheaded by GIZ WSRP and Kenya Breweries Ltd. (KBL), gathered high ranking representatives from the private sector, civil society and government to discuss the water situation in Nairobi. The participants, especially representatives from highly water dependent companies such as KBL, Coca-Cola Sabco, BASF and TetraPak, acknowledged the importance of Corporate Water Stewardship and committed to start a process, which is expected to lead to first results in The sanitation component of the WSRP is developing and expanding its collaborating with the private sector for the construction and up-scaling of the on-plot sanitation blocks. This activity is funded by the Bill & Melinda Gates Foundation and aims to provide 80,000 on-plot sanitation facilities to people in low income areas. Plot owners are required to provide a financial and cooperation with local banks to provide loans is explored. Challenges and way forward The March 2013 election has been successful and a peaceful transfer of power was achieved. The devolution of powers process will change the landscape of public governance, bringing investment decisions and planning and project responsibilities to lower levels of Government, and hence closer to the people. Both issues may reflect on the activities of the AF and the other GIZ structures involved in the promotion of development partnerships with the Private Sector. Coherent and coordinated responses are necessary. Emphasis will, for example, be given to DPPs in and around local communities, including locally active civil society organisations. The GIZ-internal agreements reached in the Nairobi conference include a stronger coordination role for the AF s East Africa Hub in Kenya and first lessons will be shared in a follow-up meeting early GIZ will continue to promote the DPP concept, for example during the ongoing consultations on the new PPP bill or in broader collaborations with Kenya s organised business. The East African Business Council (EABC) is interested to up-scale the Code of Ethics for Business in Kenya as an East African Community Code and support will be provided in that regard. Concrete DPPs will serve as best practice cases to exemplify opportunities and advantages arising from development partnerships. The collaboration with Strathmore University on East African Renewable Energies and Energy Efficiency Competence Center shall create useful synergies with the new GIZ energy programme. It is hoped that there will be similar national developments as the waste tyre management DPP was able to stimulate. Published by As at January 2014 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Competence Center Cooperation with the Private Sector, Africa Department Registered offices Bonn and Eschborn Dag-Hammarskjöld-Weg Eschborn, Germany T F dpp-africa@giz.de GIZ is responsible for the content of this publication. Implemented by On behalf of Federal Ministry for Economic Cooperation and Development (BMZ) Adresses of the BMZ Bonn BMZ Berlin BMZ offices Dahlmannstraße 4 Stresemannstraße Bonn Germany Berlin Germany Tel (0) Tel (0) Fax + 49 (0) Fax + 49 (0) poststelle@bmz.bund.de

5 Development Partnerships with the Private Sector. Facts & Figures Kenya All recent and ongoing DPPs in Kenya Title Partner Start End Public Private by 3 rd partners Total Sector Africa Facility Empowerment of housekeepers in primary health issues to safeguard the staff children Implementing a Comprehensive workplace wellness programme while involving communities via Cellular Technology Waste Tyre Management Kenya National Corruption Prevention Pact Access to Solar energy under a bottom of the pyramid approach East African Renewable Energy and Energy Efficiency Competence Centre The Solar Street Lighting Project Kenya Mainstreaming health promotion Improved water and wastewater management by hotels to support sustainable growth of tourism at Kenya s coast line Promotion of public health prevention and safety leading to healthier communities and lower health care costs in Kenya Increasing tea producers ability to positively adapt to climate change Sustainable ICT solutions for standardized processes in health care management of Kenyan hospitals Advisory services to central banks in East Africa* Integrated Approach to Comprehensive Wellbeing at the Workplace including Financial Wellness * Kenya Airways (KQ) Pride Center 11/10 10/13 174, , ,500 Health Safaricom 11/10 08/13 200, , ,000 Health Bamburi Cement Ltd. Kenya Association of Manufacturers 12/10 10/14 415, , ,000 Environment 03/11 02/14 162, , ,631 Good Governance TOTAL S.A. 12/11 04/14 179, , ,368 Energy Strathmore University Laptrust Administration Services Ltd. Bamburi Cement Ltd. Severin Touristik GmbH B. Braun Melsungen AG Ethical Tea Partnership Biomedpark Medien GmbH Allianz Global Investors Europa GmbH Aga Khan Foundation 07/13 06/16 200,000-90, ,000 Energy 12/13 12/15 195, , ,000 Energy developpp.de 10/10 01/13 200, , ,500 Health 10/10 01/15 200, ,000 30, ,000 Water 11/10 12/13 200, , ,141 Health 11/10 10/13 190, , ,000 Environment 12/10 05/13 198, , , ,800 Health 12/13 09/15 87, , ,529 Sust. Economic Developmen 12/11 01/15 200, , ,283 Health

6 Development Partnerships with the Private Sector. Facts & Figures Kenya All recent and ongoing DPPs in Kenya Title Partner Start End Public Safe and Effective use of agro chemicals by small farmers through promotion of GAP and implementation of standards * Quality Solar PV as Sustainable Source of Energy * Affordable Nutritious Foods for Women (ANF4W) * Bayer CropScience AG Private by 3 rd partners Total Sector Strategic Alliances 12/09 01/13 245, , ,000 Agriculture Energiebau Solarstromsysteme GmbH 08/10 07/13 582, ,414-1,164,828 Energy BASF SE 07/13 05/15 280, , , ,738 Health Water 6% Energy 13% Sustainable Economic Development 9% Good Governance 2% Environment 6% Health 36% Agriculture 28% DPPs (all, 1999-today) according to sector 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - All DPP-s (1999-today) Africa Facility developpp.de* Strategic Alliances* Integrated 3 rd Partner Private Public Overview DPP (all ) number of projects. s Type of DPP No. of DPPs Public Private 3 rd Partner Total In In % In In % In In % In Africa Facility 11 1,920, ,717, , ,736,810 developpp.de * 19 3,259, ,961, , ,892,485 Stategic Alliances * 3 1,108, ,183, , ,554,566 Integrated , , ,069,843 Total 46 6,653, ,586, ,013, * if project implemented in more than one country, s split by respective number of countries