A
GLOBAL COUNTRY STUDY AND REPORT
On
“KENYA”
Submitted
To
Gujarat Technological University
(Marwadi Education Foundation’s Group of Institutions)
In
Partial fulfilment of the
Requirement of the award for the degree of Master of Business Administration
Batch: 2011-13
MBA SEMESTER III-IV
( DIV: C)
Marwadi Education Foundation’s Group of Institutions
MBA PROGRAMME
Affiliated to GUJARAT TECHNOLOGICAL UNIVERSITY AHEMADABAD
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LIST OF THE STUDENTS WITH ENROLMENT NUMBER:
Enrollment No Student Name
117340592012 CHINTAN RAJENDRABHAI MAKHECHA 117340592052 HARDIK PRABHUDAS NATHAVANI 117340592053 NIRAV JITENDRABHAI KARELIA 117340592055 AFSIN MANSURALI GILANI 117340592061 HIRAL BHARATBHAI MODHA 117340592065 TARUN GOKUL RATHOR 117340592068 NIKUNJ KISHORBHAI BHALODI 117340592069 RAVINDRA PRAFULBHAI AGOLA 117340592071 POOJA ASHOKBHAI DOMADIYA 117340592075 DHARA JYOTINDRAKUMAR MALAVIYA 117340592076 JAY VITTHALBHAI SANGANI 117340592078 YOGENDRASINH ASHOKSINH JADEJA 117340592081 JATIN RAJESHBHAI VYAS 117340592084 JAYDEEP ASHVINKUMAR PAREKH 117340592088 KRUPALI NALINKANT DAVADA 117340592089 PRADIP PRAVINBHAI BORICHA 117340592091 SHRENIK TARUNKUMAR MEHTA 117340592096 SUDHIR MADHUSUDANBHAI LOLARIYA 117340592098 VINAY MAHESHBHAI JOGADIA 117340592102 HARDIK KANIYALAL JOSHI 117340592104 MUSHTANSHIR LAKSHMIDHAR 117340592105 NOORUDIN ABDULLAH BOHRA 117340592106 MANISH KISHORBHAI GOHEL 117340592108 ANKITA DIPAK MALKAN 117340592109 PRATIK VIRENDRABHAI RAGHANI 117340592110 VIVEK PANKAJKUMAR DAVE 117340592115 NEMISH PANKAJBHAI SHAH 117340592116 SWATI DAYALAL DHOKIYA 117340592117 ASHISH NARENDRABHAI ADROJA 117340592119 GANPAT JIVRAJBHAI CHAUHAN 117340592121 MANSI BHUPENDRABHAI NANDANI 117340592123 GAURAV SURESHBHAI KATHRANI 117340592124 JAY NITESHBHAI MEHTA 117340592125 MAUNIK MAHESHBHAI RANPARA 117340592126 NEHA RAJENDRAKUMAR SONI 117340592128 HIREN MAGANBHAI BAVISA 117340592131 ALIAKBAR ALIHUSEN BHARMAL
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117340592132 SWATI LALITKUMAR MODI 117340592133 VASHAV HASMUKH MAKHECHA 117340592135 DINESH RAMJIBHAI KOTHIYA
117340592136 JALPA RAJESHKUMAR PARMAR 117340592139 CHARULA BAVANJIBHAI MAKADIA 117340592140 MOHSIN HUEESNBHAI MADAM 117340592144 PRIYANKA MUKESHBHAI RADADIYA 117340592145 HARESH PRAVINBHAI DHANANI 117340592152 HARDIK JYESHBHAI CHAVDA 117340592155 DIPTI PREMJIBHAI GOHEL 117340592157 MAHIPAL BHARATSINH GOHIL 117340592158 BHOOMITA CHANDUBHAI DUDHATRA 117340592166 MEHULKUMAR MOHANLAL JOGADIYA 117340592167 YOGESH KHIMAJIBHAI AHIR 117340592169 ANJALI RAJENDRABHAI JADIYA 117340592170 ROHITKUMAR JAYNATHBHAI JAYESH 117340592172 YASH JAYANTKUMAR RAVAL 117340592173 SOYABMAHAMAD ABDULGAFAR MANASIYA 117340592175 HINABEN CHANABHAI RANPARIYA 117340592176 SAGAR SHARADBHAI CHOTAI
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PREFACE
The Global Country Study and Report on “KENYA” is an attempt to study various aspects of this selected country and Industrial scenario existing in the country. This report is a part of comprehensive study done by MBA students to explore Export-import opportunities with respect to various industries selected by them.
Due to increased integration and globalization of world economies, business activities across the globe have increased. Students have been able to acquire the knowledge of the Global / Country Markets, which would help them do business or manage investments successfully across national boundaries.
This report also serves a purpose of knowledge resource on one country and helps many researchers, academicians, industry persons to draw conclusion on global trade and commerce.
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Table of Contents
SR.NO TOPIC Page No. Part-I 1 Introduction to Kenya 5 2 Political overview of Kenya 8 3 Economic overview of Kenya 25 4 Social overview of Kenya 33 5 Technological overview of Kenya 48 6 Ecology of Kenya 63 7. Legal System of Kenya 73 8 Financial Market of Kenya 88 9 Major Industries of Kenya 101 10 Major Trade Partners of Kenya 118 11 WTO & other Trade Organization and Its relation with 136 Kenya 12 Tax Policy of Kenya 140 Part –II 13 Agriculture Sector 160 14 Mining Sector 172 15 Financial Service Sector 186 16 Energy Sector 191 17 Tourism Sector 211 18 Education Sector 220 19 Textile Sector 230 20 Fishery 244 21 Automobile Sector 256 22 Pharmaceuticals Sector 270 23 Telecom Sector 292
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INTODUCTION:
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Facts of Kenya:
1 Area 580,370 sq km (224,081 sq miles) 2 Capital Nairobi Kikuyu 22%, Luhya 15%, Luo 12%, Kalenjin 3 People (approx) 12%, Kamba 11%, Kisii 6%, Meru 6%, Other African 10%, Other (Asian, Arab, European) 1% English, Kiswahili, various indigenous 4 Language(s) languages Protestant 45%, Roman Catholic 33%, Muslim 5 Religion(s) 12%, indigenous beliefs 10%, 6 Currency Kenyan Shilling (KSH) Emilio Mwai Kibaki (sworn in 30th December 7 President December 2007) Vice President (and 8 Stephen Kalonzo Musyoka Minister for Home Affairs) 9 Prime Minister Raila Odinga (sworn-in 17 April 2008) 10 Foreign Minister Sam Ongeri (appointed 26 March 2012) Parties at the last election included the Party of National Unity (PNU) and Orange Democratic 11 Major Political parties Movement (ODM), and the smaller Orange Democratic Movement-Kenya (ODM-K). UN, Commonwealth, African Union, WTO, East Membership of African Community (EAC), Inter-Governmental 12 international Authority on Development (IGAD), Common groupings/organizations Market for Eastern and Southern Africa (COMESA). US$32.19 bn (2010 Economist Intelligence 13 GDP Unit);
14 GDP per capita US$1,646 (PPP) 8 15 Annual growth: 5.6 % (estimate 2010) 16 Inflation 14 % (2011 estimate) 17 Exchange Rate KSh 131 = £1 sterling (February 2012)
Small scale consumer goods, agricultural 18 Major Industries products, processing, and tourism. Africa (46.2%) mainly Uganda and Tanzania, European Union (28.5%), UK the leading 19 Major trading partners partner, the Far East tops the EU for imports.
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EXECUTIVE SUMMARY ON POLITICAL OVERVIEW OF KENYA:
Enrolment No Name of the Students Faculty Guide 117340592136 JALPA RAJESHKUMAR PARMAR 117340592139 CHARULA BAVANJIBHAI MAKADIA Prof. Priyanka Mehta 117340592140 MOHSIN HUEESNBHAI MADAM 117340592144 PRIYANKA MUKESHBHAI RADADIYA 117340592145 HARESH PRAVINBHAI DHANANI 117340592152 HARDIK JYESHBHAI CHAVDA
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OVERVIEW OF POLITICAL ENVIOURMRNT :
Kenya is experiencing significant changes in its institutional and political configuration. After 20 years of political bargaining, the government agreed on a new constitution, which was adopted by the electorate in a free and fair referendum in August 2010. The new constitution encompasses issues such as greater independence for the judiciary, political decentralization, a new land law and greater legislative control over the executive, and provides for the creation of a Supreme Court within a year after the constitution‘s promulgation (i.e., August 2011). While these reforms constitute significant progress, major questions remain as to how they will be implemented in fact. The fragile power sharing arrangement between President Mwai Kibaki and Prime Minister Raila Odinga, formed in the violent aftermath of the 2007 election, has muddled through despite personal and ethnic antagonisms between the major actors involved. However, it risks falling apart from a functional perspective in the run up to the 2012 elections, even if it remains officially and formally intact. The endurance of the grand coalition thus far has mitigated the threat of a return of civil unrest.In December 2010, the chief prosecutor of the International Criminal Court (ICC) took a major step toward dealing with the perpetrators of post-election violence in Kenya, publishing the names of six prominent figures alleged to be the key instigators. The list included two key members of the government, the head of the civil service and the former head of police. The ICC investigation could fundamentally alter the political landscape. In a separate incident unrelated to the publication of the list, several leading cabinet ministers were forced to resign following the revelation of their roles in large-scale corruption affairs. The appointment of the well-respected Patrick Lumumba as head of the Kenya Anti-Corruption Commission in 2010 has led to genuine improvements in the fight against the abuse of public office. Indeed, for the first time the reseems to be a real chance that the fight against corruption will be taken seriously . Economic growth has recovered, yet remained under the pre-2007 level throughout the review period, and is not strong enough to reduce poverty. Despite the global economic downturn, the government was able to keep the budget deficit at lower levels than many had predicted, and was not forced to raise the tax rate. Recently, the government initiated a new privatization drive designed to boost private investment in infrastructure and transport. 11
The volume of foreign direct investment (FDI) remained low in comparison to the size of the population and the volume of FDI inflows into neighboring East African Community (EAC) countries. There has been disinvestment from Kenya in recent years on the part of consumer goods manufacturers, partly because of competition from counterfeit and substandard goods. Over the last few years, the international community has on various occasions expressed disappointment over the misuse of donor money, and has at times threatened to stop dispersing aid. Political behavior has remained driven by individual and ethnic interests, a situation exacerbated by the fact that the 2012 elections are rapidly approaching. The recovery of the infrastructure is underway,while the process of reintegrating thousands of internally displaced people has stagnated, being executed in a way favoring a single affected group, the Kikuyu.History and Characteristics of TransformationThe political transformation of Kenya remains shaped by its colonial legacy (1896 – 1963). Questions of land allocation, which are ultimately linked to questions of wealth and inter-ethnic group relations, have never been handled appropriately. Both during the initial period of de facto and later of de jure one-party rule (1967 – 1991) under the Kenya African National Union (KANU, as well as during the period of multiparty competition (1991 to the present), politics has been characterized by strong ethnic undercurrents. Under the country‘s first president, Jomo Kenyatta (1964 – 1978), most prominent cabinet positions and economic privileges were given to his Kikuyu community, the country‘s largest ethnic group (the population share of which, however, has continuously decreased from 20.12% in the first census in1969 to 17.15% in the 2009 census). In the fertile Rift Valley, both Kikuyu and Kalenjin have aspired to claim land previously under colonial occupation. Competing demands for land were never resolved, and thus became a latent source of conflict between the two communities. The political instrumentalization of the uneven distribution of land has led to widespread ethnic violence, which has flared up several times in the wider context of elections after the return to multiparty democracy in late 1991. In 1964, the Kenyatta government altered the independence constitution by abolishing the federal institutional system (―majimbo constitution‖).
The debate over ―majimboism‖ (Swahili for federalism) has since returned to the political agenda. In addition to tensions between the Kikuyu and the Kalenjin, political antagonism 12 developed between the Kikuyu and the Luo. The dismissal of Kenyatta‘s Luo Vice President Oginga Odinga (the father of current Prime MinisterRaila Odinga) and the mysterious assassination of the other senior Luo politician Tom Mboya –a potential contender for the presidency – produced a sense of betrayal among the Luo. These long- held resentments between Luo and Kikuyu resurfaced vividly prior to the 2007 elections.
Under Kenyatta‘s successor, Daniel arap Moi (1978 – 2002), the allocation of public resources shifted in favor of his Kalenjin group and several pastoral communities. As a result, the Kikuyu were gradually pushed to the political margins over a period of 10 years. After a failed coup d‘état against his government in 1982, Moi grew increasingly authoritarian and implemented a system of control, terror and torture. During the Cold War, Moi secured Western support withhis strict anticommunist stance. After the end of the Cold War, the regime initially remained authoritarian. Faced with a temporarily united opposition of civil society, churches, academia, NGOs, and former KANU politicians, and against the background of a changing international environment, the Moi government was eventually forced to concede ground and institute a multiparty system. Running against an ethnically fragmented opposition, Moi benefited from the country‘s first-past-the-post polling system, winning the 1992 and 1997 elections despite attracting considerably less than 50% of the vote. In the 1997 elections, KANU ensured its parliamentary majority by rigging the results in several constituencies.
I. Political Transformation
1 | Stateness The state‘s monopoly on the use of force is established nationwide in principle, but it is not realized thoroughly or at all times throughout the territory. Political interference and the lack of proper police oversight and supervision mechanisms, as well as technical and organizational deficiencies within the police force, are the main reasons for these gaps. Violent crime remains a serious problem in Nairobi. In several of the capitol‘s slum areas, an effective monopoly of force is held by street gangs, not the government. In rural areas, armed banditry continues to increase.Kenya does not face threats to its territorial integrity. However, it remains affected by state crises in its immediate neighborhood. Kenya currently 13 provides shelter for thousands of refugees from Somalia. According to new estimates, there are roughly 100,000 asylum seekers in Kenya, while the refugee camps in Dadaab (close to the Somali border) and Kakuma (close to the South Sudanese border) respectively host roughly 400,000 and 100,000 refugees. In both camps, clashes between refugees and the police have occurred on several occasions. The Dadaab camp also serves as a hideout for members of the al-Shabab terror group and related militia groups.
The UNHCR has asked the Kenyan government to increase its security measures around these camps, but control of the borders along Somalia, Sudan and Ethiopia remains difficult. Monopoly on the use of force 6 All major groups in society respect the Kenyan state as legitimate. However, the centralized governance system has led to complaints by various ethnic, religious and nomadic groups regarding their perceived political and economic marginalization.
The Kenyan state does not recognize the so-called Kenyan Nubians as citizens. Many Nubians have lived in Kenya for generations, but are unable to claim Kenyan passports. The majority of them are descendants of Sudanese ex- servicemen from the British army.Since independence, religious dogma has not interfered with the state‘s legitimacy. The referendum campaign over the proposed constitution ushered in a new dynamic, however. The Christian churches, including the mainstream (Catholic and Anglican) and evangelical churches, rejected the new constitution on the grounds of an abortion clause that was allegedly too liberal, and the anchoring of the Khadi courts (Muslim law courts dealing with limited personal status issues) in the new constitution. Church leaders strongly campaigned for a―No‖ on the referendum, and pressed their congregations to follow suit by grossly distorting the contents of the proposed constitution. Both abortions and the constitutionality of Khadi courts have long been a reality in Kenya. The Khadi courts‘ jurisdiction is confined to matters concerning personal status law, such as marriages, divorces and inheritances for Muslims. They have far less power than do Kenya‘s high courts, and both parties to any court case have to consent in order to use the Khadi courts. Some fringe representatives of the Muslim community have used the debate over federalism (majimboism) as a platform to advocate the implementation of Shari‘ah law. The Christian churches must be seen as responsible for considerably impairing 14 relations between the Christian and Muslim communities. No interference of religious dogmas 8 The state‘s administrative functionality remains hampered. Administrative structures exist throughout the country, yet reforms to the civil service are urgently required. The state machinery‘s level of functioning is low. According to Afrobarometer, the vast majority of Kenyans feel that the administration is unwilling to deal with their requests. A perceived preference for the Kikuyu dominated region has been an issue since independence. The feeling has increased in strength since Kibaki‘s election in 2002, and has hardened since his contested 2007 re-election.
According to the recently passed constitution, Kenya‘s basic administration will soon be subjected to a complete overhaul. The implementation of a federal structure that gives counties with their own assemblies aims to bring state services closer to the people. However, previous experience with constituency development funds showed that local structures can be as corrupt and as underperforming as the central government.Basic administration.
2 | Political Participation :
Kenya has conducted regular elections every five years since independence. With the return to a multiparty system in 1991, the presidency began to be contested by multiple parties. The 2002 elections resulted in the country‘s first peaceful and democratic handover of power. that democratic trend in many ways. The contest between incumbent Mwai Kibaki (PNU) and Raila Odinga (ODM) was largely an ethno-political struggle for the presidency. While the elections themselves were peaceful, and Kenyans voters showed great commitment to participating in the democratic contest, both the governing PNU and the opposition ODM rigged the election results in their respective strongholds. The tallying irregularities by the Electoral Commission of Kenya (ECK) in Nairobi undermined the body‘s credibility, and fostered the impression that the electoral authorities had manipulated results in favor of Kibaki. It further gave credibility to the insistent accusations by ODM that the presidential results had been rigged in several constituencies. The slim parliamentary majority won by ODM (and its allies) over PNU (and its allied partners) gave 15 further credence to these allegations. Post-election violence on an unprecedented scale, with heavy ethnic undertones, left thousands of people dead and many more homeless. The chaotic electoral aftermath demonstrated that democratic norms have not yet been internalized by the major political players. With the backing of the international community, the African Union‘s Panel of Eminent Personalities, led by Kofi Annan, facilitated the construction of a grand coalition between the ODM and the PNU, which despite severe challenges and heavy infighting, remained formally intact through the review period.Following the findings of an independent review commission led by South African Justice Johan Kriegler on the causes of the electoral chaos in 2007, the Electoral Commission of Kenya was disbanded. All commissioners, including Chairman Samuel Kivuitu, and all permanent staff were made to resign.
Since then, a wide range of electoral reforms has begun to be implemented, but the effort has not yet been concluded. As part of this process, an Independent Interim Electoral Commission (IIEC) has been set up as a transitional body under the National Accord (the power-sharing agreement that created the grand coalition), with a complete new secretariat and new coordinators for the 210 constituencies. The IIEC carried out a wholly fresh voter registration effort, which was necessitated by the fact that the old register was no longer accurate, as it continued to hold a large number of deceased persons. With 12,656,451 individuals, the new register is 89% the size of the inflated 2007 register, and thus appears more realistic. In a pilot project in 18 selected constituencies (with a total of 1.8 million registrants), voter registration was conducted electronically, allowing for easy identification of multiple registrations and other deficiencies. The IIEC conducted the August 2010 referendum and a number of parliamentary and civic by-elections in a professional, nonpartisan manner, thus gaining credibility. In the August 2010 referendum, 67% of the electorate endorsed the new constitution, while 31% rejected it. The so-called No campaigners, led by Rift Valley political leader William Ruto and strongly supported by the Christian churches, accepted defeat. While these developments certainly helped the electorate, stakeholders and international community to regain trust in the electoral process, it is premature to draw any conclusions for the 2012general elections, as the stakes will be much higher and the 16 political climate potentially more polarized. Meanwhile, the Interim Independent Boundaries Commission (IIBC) presented its report, suggesting – along the lines of the new constitution – the creation of an additional 80 constituencies and the adjustment of existing constituency boundaries. A high court injunction, however, stopped its official public adoption; the resulting deadlock needs to be resolved quickly if it is not to impact negatively on the implementation of the new constitution and the preparations for the 2012 elections. With an initial life span of two years, the IIEC was supposed to be merged with the IIBC by December 2010, to form the new Independent Electoral and Boundaries Commission (IEBC). Delays in the implementation of the new constitution have hampered this process, and the IIEC‘s mandate has been prolonged. The new constitution retains the first-past-the- post system, but adds 47 seats (one per county) in order to meet the requirement that at least one-third of elected seats be held by women. A newly created Senate serves as a second chamber of the National Assembly, and consists of 47 elected senators plus representatives of special interest groups.
The president now needs an overall majority (―more than 50%‖) and – after the dissolution of the provinces as administrative units – at least 25% in the majority of the counties to ensure a minimum of national legitimacy (previously 25% in five of the eight provinces).There are no classical veto powers operating, but the effectiveness of governance has been substantially hampered by frictions, tensions and infighting within the grand coalition. The ICC‘s publication of the list of the six persons the court seeks to prosecute has led to a breakdown in government unity. It appears unlikely that ethno-regional leaders and their political patrons will use ethnic militia to veto central government decisions they are uncomfortable with. In contrast to most other African nations, a takeover of power by the army does not appear to be a possibility.Effective power to govern 6 There are no legal constraints on the right of any group to assemble or associate freely. However, in the aftermath of the 2007 elections, the police systematically interfered with these rights. As the immediate crisis was resolved and large-scale demonstrations subsided, the police acted with more restraint; however, the police forces today still deny human rights activists‘ requests for meetings or disperse those 17 meetings.Association / assembly rightsPress freedom exists in Kenya on paper as well as in principle. There is a substantial diversity of published opinions. In contrast to the previous constitution, the constitution passed in 2010 explicitly refers to the freedom of expression. In January 2009, President Kibaki signed the Kenya Communications Bill, a stepwidely criticized by journalists at home and abroad. The law originally provided forheavy fines and prison sentences. It gave the government authority over the issuance of broadcast licenses and the production of new programs. It further allowed the government to raid media offices, tap phones and control broadcast content for purposes of national security. In May 2009, President Kibaki ordered theattorney general to revise the law in collaboration with all stakeholders, including the Kenya Union of Journalists and civil society organizations who advocate freedom of expression. Subsequently, the most contentious parts of the law were withdrawn; the government is now no longer allowed to raid broadcasting stations or to control the content on TV and radio. These amendments were widely welcomed by all Kenyan media practitioners .Kenya‘s position on the worldwide press freedom index has improved from position 96 in 2009 (out of 167 countries) to position 70 in 2010. Several positive legal reforms such as the freedom of information policy bill (2007) have yet to be implemented. Although extrajudicial killings of journalists remain uncommon by regional standards, a number of journalists have been harassed, beaten, arrested or at times even killed by the security apparatus. In July 2009, the antiterrorism police unit illegally interrogated editors about sources for an article that claimed the police unit had lost crucial files relating to al-Qaeda members. The media has also become a target when police corruption and professional neglect have entered the headlines. There are known and reported cases where security forces have harassed and beat up journalists. Self-censorship is practiced, though to a much lesser extent than during the period of the one-party state.
3 | Rule of Law :
The executive has long dominated Kenyan politics, throughout the authoritarian Kenyatta and Moi eras, but also during the Kibaki presidency. The 20-year struggle for a new 18 constitution was to a significant degree driven by a quest for a clear separation of powers. Since the work of the Kenya Constitution Review Commission under Yash Pal Ghai (2000 – 2002), the debate over reducing the presidency‘s vast powers has been connected to the introduction of parliamentary system features, particularly the creation of the position of prime minister as a second center of power. While in opposition the National Rainbow Coalition (NARC) favored a second center of power, but once in power the Kibaki wing of government viewed the concentration of power in the hands of the president far more positively, and during its first term in office (2002 – 2007) sabotaged all attempts to pass a constitution that would have curtailed those powers. The political power impasse after the 2007 elections could only be overcome by adding the position of prime minister to the old constitution to pave the way for the grand coalition. However, the prime minister position was not added to the old constitution in an efficient way, thus creating overlapping and conflictingresponsibilities, particularly with the office of the vice president.
This fueled considerable tension between the two coalition partners. The grand coalition integrated the three major political parties, all of which contested the 2007 elections with their own presidential candidates (Mwai Kibaki for the PNU, Kalonzo Musyoka for ODM- Kenya, and Raila Odinga for the ODM). This left only an ensemble of fragmented fringe parties incapable of exerting strong legislative power, as a check and challenge to the executive. The appointment of more than 90 members of parliament (out of a total of 222) as ministers or Assistant Ministers – an effect of the grand coalition‘s creation –robbed parliament of some of its most experienced members. The new constitution states that ministers must beselected from outside parliament. The new constitution came into force, promulgated by President Kibaki, on 27 August 2010. However, it requires the enactment of at least 48 new laws, all listed in the constitution‘s fifth schedule, with a defined time span for their enactment. The implementation of the constitution is therefore a staggered process, to take place over a period of five years. During this time, parts of the old constitution will remain in place, as will the provisions (until the next general election) of the National Accord and Reconciliation Act (NARA) that facilitated the grand coalition‘s creation. This sometimes creates confusion as to which provisions ofwhich law apply. More than half of this new legislation has to be drafted and passedby parliament before the next elections, which according to the constitution are 19 scheduled for August 2012. This created a heavy workload for parliament in a short period of time. The impact of the ICC proceedings as well as the positioning and political realignments for Kibaki‘s succession caused delays in the implementation process. The Commission for Implementation of the Constitution (CIC) and the Commission for Revenue Collection (CRA) were initially set up belatedly, and then the appointment of the chief justice, attorney general and chief prosecutor created a severe coalition – and almost a constitutional – crisis. According to the NARA, decisions must be made on the basis of close consultation between the president and the prime minister, providing a transitional check on presidential powers. For major policy decisions and key appointments, President Kibaki has several times shown that he continues to discharge his office in the spirit of the imperial presidency. However, during the period under review, parliament twice performed its role as constitutional check, supported by the public, civil society and the international community, and rejected unilateral appointments by the president; initially with the renewal of the contract for the head of the Kenya Anti-Corruption Commission in 2009, and again with regard to the nomination of the chief justice and three other senior public officers in January 2011. While parliament was heavily divided between the Kibaki and the Odinga wings, particularly in the latter case, the speaker upheld the independence of the legislative branch against threats and intimidation attempts by the Kibaki faction. Generally,compared to the previous institutional configuration, the powers of parliament have been strengthened and the powers of the president curtailed. The president is required to seek parliamentary approval for his cabinet secretaries (formerly ministers). Parliament can dismiss a minister, which previously was the exclusive prerogative of the president. The judiciary is institutionally differentiated, but its functions are severely restricted. The old constitution did not guarantee the independence of the judiciary. National and international agencies have for several years called for in-depth judicial reform, as a way to root out corruption and diminish executive interference in judicial affairs. The reforms of 2010 and early 2011 point in the right direction, as the independence of the judiciary has been guaranteed and strengthened by the new constitution and the related body of new legislation. However, attempts by the executive to interfere with judicial independence have been persistent under the old as well as under the new configuration of power. In April 2009, former Minister for Justice and Constitutional Affairs Marta Karutha 20 resigned following President Kibaki‘s appointment of a number of judges without consulting her. In January 2011, the president unilaterally tried to appoint a new chief justice, attorney general, public prosecutor and controller of budget. The legal basis for these appointments was not entirely clear, as provisions from the National Accord and Reconciliation Act coexist with those in the new constitution. However, the unilateral attempt to appoint these four key civil servants went clearly against the spirit of both documents, and was therefore rightly rejected by Speaker of Parliament Kenneth Marende. The appointment and recruitment process thus had to be reopened. The failure to try those responsible for the violence after the 2007 elections is attributable to both the legislature and the judiciary.
Parliament failed to assent to abill to set up a local tribunal. In both parliamentary and the judicial circles, the delay is partly attributable to fears that any local tribunal acceptable to the international community, particularly to Kofi Annan‘s Panel of Eminent African Personalities, would have to meet international standards that would not include immunity for the president. In contrast, under the Kenyan political tradition, the president has always been seen to stand de facto above the law. The president‘s unilateral attempts to appoint the chief justice and the attorney general were part of a wider government strategy to achieve an international deferral of the post-election violence cases, which are now being handled by the ICC. For both positions, Kibaki named persons not considered to be independent (the chief justice candidate still has a legal case pending against him, and the initially designated attorney general was one of Kibaki‘s key advisors for the ICC Based on a broad national debate and two reports in 2010 (one by the government‘s Task Force on Judicial Reform and another by the International Legal Consortium and the International Bar Association) the Judicial Service Commission, key in the appointment process of judges, was reconstituted in October 2010. It was allocated a greater administrative support base and its mandate generally broadened. The new constitution mandates the independence of the judiciary, and calls for a vetting procedure of all sitting judges and the replacement of several senior figures in the judicial system.The fight against corruption was a major theme in Kibaki‘s 2002 election campaign, and was one of the main reasons for his success. In 2003 and 2004, the governmentenacted several laws designed to curb corruption. These included the AntiCorruption and Economic Crimes Act, the Public Officer Ethics Act, and the Public 21
Procurement and Disposal of Assets Act. The new legal framework led to the restoration of the Kenya Anti-Corruption Commission (KACC), and required legislators and civil servants to provide evidence of their source of income. These were bold steps in comparison to the Moi period. However, these new initiatives were never translated into concrete actions. The KACC is legally unable to prosecute corruption incidents that occurred before 2003. The KACC operates under the control of the executive. As in the past, high-ranking government ministers have been involved in large-scale corruption affairs. The 2009 maize scandal – in which maize unfit for human consumption was imported by local businessmen, with the knowledge of senior government members – involved at least three ministries.
Reports in January 2010 that $1 million was missing from the country‘s primary school system caused the United States to temporarily suspend its education fund program. In March 2010, 20 EU mission heads announced that the European Union would no longer market the country to potential investors, due to the government‘s ongoing abuse of public funds. The European Union urged Kenya to formulate an effective anti-corruption policy and to enact vital anti-graft legislation on issues such as freedom of information, witness and whistle-blower protection, and mutual legal assistance. Michela Wrong‘s book ―Our Turn to Eat,‖ which is based on original documents collected by the former permanent secretary for ethics in the Office of the President, John Githongo, provides an in-depth illustration of the lack of political will to end public abuse by the country‘s political class.In recent months there have been positive developments. Former KACC directorand long- term Kibaki ally Aaaron Ringera stepped down in late September 2010 after the rejection of Kibaki‘s attempt to unilaterally renew his contract. Successor Patrick Lumumba has reopened Kenya‘s largest corruption scandals, the Goldenberg affair (dating back to the 1990s) and the Anglo Leasing affair (dating back to Kibaki‘s first term). In addition, several high-ranking politicians including Foreign Minister Moses Wetangula, Nairobi Mayor Godfrey Majiwa,.
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4 | Stability of Democratic Institutions :
Democratic institutions are underperforming but stable. In the past, parliament has been unable to control government effectively. This was partly due to the vast constitutional powers allocated to the presidency, and partly due to the frequent realignment of political blocs as a result of changing political preferences and priorities. Since 2008, parliament has been unable to scrutinize the government due to the size of the governmental majority and the size of the government itself (many members of which were recruited from parliament). The internal fragmentation of the grand coalition over the issue of the ICC and the nomination of key public officers has made parliament the forum for a power struggle between a group consisting of President Kibaki‘s PNU faction and suspended cabinet minister Performance of democratic institutions6 BTI 2012 | Kenya 15William Ruto‘s breakaway ODM wing on one side, and Raila Odinga‘s ODM on the other. With the ICC‘s late 2010 publication of its list of those likely to be indicted for masterminding the post-electoral violence, the government has effectively ceased to function as a cohesive body. Kibaki‘s allies have translated this collapse to the parliament, stalling any issue- oriented politics and effectively delaying the implementation of the new constitution.The failure of the Electoral Commission of Kenya to ensure free and fair elections in 2007 eroded trust in democratic institutions. The unsatisfactory performance of state institutions has been illustrated by poor results in the fight against corruption, the government‘s failure to establish a local tribunal able to bring the perpetrators of the 2008 ethnic violence to account, judicial malaise that has been addressed but not yet resolved, and the very slow and ethnically biased (in favor of the Kikuyu) reintegration of internally displaced persons (IDPs). However, the grand coalition was able to draft a new constitution, remaining united on that cause despite extensive internal bickering and personal animosities. This prevented Kenya from falling apart as a nation state. Results from the latest Afrobarometer surveys (conducted in 2008) indicated that a majority of Kenyans had trust in the presidency and the office of the prime minister. However, only a third had trust in 23 parliament. Generally, the country is in a transition phase, undergoing a staggered implementation of the new constitution and related legislation. In this process, the old, often undemocratic institutions are being substantially reformed and redefined. The old institutions suffered from executive interference and political instrumentalization, but the new ones are not yet in place. The serious infighting within the grand coalition, though it may not lead all the way to disintegration of the government, endangers the new constitution‘s implementation. All actors accept the value of democratic institutions and rules in principle. The KANU party‘s acceptance of defeat in 2002 indicated significant progress in terms of the internalization of democratic norms. Yet the behaviour of all major political players in the aftermath of the 2007 elections indicates that commitment to democracy is linked to the question of whether or not all major ethnic groups are involved in the victorious party. That condition existed in 2002 but not in 2007. In terms of the legislative framework, the judiciary and the civil service can operate freely (despite corruption), yet once the government comes under political pressure, their freedom is compromised to a significant degree. Commitment to democratic institutions
5 | Political and Social Integration :
Parties are not differentiated by platforms or principles; instead, they are built around ethnic loyalties and patronage, and serve the interest of strongmen. Accordingly, party politics has long been characterized by a high degree of polarization and volatility. The legalization of party politics in December 1991 led to various cycles of party formation, party splits, party mergers and the establishment of new parties. Consequently, no stable party system has emerged. Kenyan members of parliament receive the highest legislative salaries in the world, and politics is consequently seen as lucrative business. Parties are not rooted in society, and relationships with interest groups are limited and ad-hoc at best. The ability of Kenyan parties to integrate large segments of the population and to aggregate their interests is limited to nonexistent, with the exception of the leaders of ethnic communities. Just prior to the 2007 elections, Kenya had 300 registered parties. The new party law that came into effect in January 2009 provides for public funding, and regulates the funding of parties by private individuals. In order to register, parties have to
24 comply with rules that are designed to stop individual members‘ defections, particularly among those who have lost their party‘s nomination in an upcoming election.
Party leadership structures have to include representatives from all provinces. Parties cannot be founded on the basis of ethnicity or religion. By March 2010, Kenya had 47 registered parties. The new constitution gives the Independent Electoral and Boundaries Commission the responsibility to regulate the nomination process for elections, something that in all previous multiparty elections had been beyond the reach of proper legal supervision. The new party law will now have to be adjusted to the new constitution, and much of its success will depend on two factors: the establishment of clear sanctions capable of acting as deterrents for violating its provisions, and secondly the political determination to enforce the law.As social interests are not articulated along society‘s economic divide, but along ethno- regional lines, social groups do not appeal to or absorb certain social strata or professional groups. Organizations with potentially significant political leverage due to their sheer membership numbers, such as the Central Organization of Trade Unions (COTU) and the Kenya National Federation of Agricultural Producers (KENFAP), the successor of the Kenya Farmers Union, continue to be hampered by corruption and weak leadership. They therefore fail to address any social issues even for their members, let alone on a national scale. However, there is a plethora of professional and interest groups covering a variety of fields, including human rights, gender equality, business interests, fair trade and environmental protection, among others. These are mostly confined to the urban centres, thus fail to represent the interests of rural populations such as farmers. Their impact varies. Some, such as the Kenya Human Rights Commission (NGO), the Kenya National Commission on Human Rights (governmental, but constructively critical), the Law Society of Kenya and other professional associations, have taken up genuine and constructive engagement with the government. This was particularly visible during the protracted constitutional drafting process, when a wide variety of organizations submitted proposals to the Kenya Constitutional Review Commission (2000 – Interest groups6 BTI 2012 | Kenya 172002), the constitutional conferences at the Bomas of Kenya (2003 – 25
2004) and the Committee of Experts, the body in charge of leading and coordinating the constitutional reform process following the 2007 elections.
However, interest groups and civil society organizations have also been susceptible to the ethno political divide, which can limit their impact on national debates and events. Despite the post-election violence and the persistence of corruption, support for democratic forms of government remains high. According to the latest Afro barometer findings, 78% of Kenyans prefer democracy to any form of authoritarianism. These data were collected in 2008, thus after the electoral violence. In 2005, 75% preferred democracy to any form of authoritarianism. Taken together, the survey results indicate that support for democratic values remains unshakably high. Two-thirds expressed trust in the president and the prime minister, even though these high rates of approval differ across time. Only one-third of the Kenyan population expressed trust in parliament, however. The passage of a new constitution has increased trust in democratic norms. Approval of democracy. Kenya has a long history of community-organized self-help fundraisers (harambee). Invitations to these events are normally spread by word of mouth, or by newspapers in the case of larger fundraisers. Local members of parliament and dignitaries are expected to contribute to these events. Since independence, ―harambee‖ fundraisershave become an integral part of social life in Kenya, and have contributed to fostering a sense of unity at the local village level. A significant number of social and self-help organizations exist, although these organizations lack an effective division of labour. Outside the capital, the building of networks is limited due to financial and infrastructural constraints. Social trust remains limited to family, clan or ethnic networks. Thus, trust within the population is high on the local level when compared to the national level.
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EXECUTIVE SUMMaRY ON ECONOMIC OVERVIEW OF KENYA:
Enrolment no Name of the Students Faculty Guide 117340592119 GANPAT JIVRAJBHAI CHAUHAN 117340592121 MANSI BHUPENDRABHAI NANDANI Prof. Priyanka Mehta 117340592123 GAURAV SURESHBHAI KATHRANI 117340592124 JAY NITESHBHAI MEHTA 117340592125 MAUNIK MAHESHBHAI RANPARA 117340592126 NEHA RAJENDRAKUMAR SONI
27
ECONOMICAL OVERVIEW
―Kenya is heading into an election year with a transformative new constitution but historically, the economy slows down during election periods,‖ says Johannes Zutt, World Bank Country Director for Kenya. ―A peaceful political transition and export-led growth will provide a window of opportunity for the economy to achieve higher growth and create more jobs for the large number of people entering the workforce.‖
In 2012, Kenya’s economy has been on a tightrope. Policy makers have had to walk a fine line between stabilizing the economy and maintaining the growth momentum. While inflation has declined, the exchange rate stabilized, and the fiscal position improved, fundamental economic imbalances continue to make Kenya vulnerable to shocks. In the absence of economic and social turbulence, Kenya should grow at 5 percent in 2012 and 2013, which would still be substantially below its neighbors. Kenya has been benefitting from the integration and growth momentum in the East African Community (EAC), which has become one of the most vibrant economic regions in the world. However, despite impressive increases in trade between the five EAC partners in recent years, there is still a large untapped potential. EAC trade could increase several-fold if unnecessary restrictions in the trade of goods and services –particularly nontariff barriers- were removed Kenya’s Economy: Stable But Vulnerable Kenya’s economy is stabilizing gradually. After sailing through rough waters in 2011, the economy is back on track to achieve 5 percent growth in 2012. Three main factors underpinned stabilization. First, the Government’s determined action to increase interest rates during the third quarter of 2011 and prudent fiscal policies sent important signals to the markets and this also helped to stabilize the exchange rate. Second, inflation has started to decline sharply, thanks to lower international food and energy prices. Third, Kenya’s service sector continued to expand strongly, with very good results in tourism.
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The return of macroeconomic stability gives hope for 2012 and 2013. While inflation was close to 20 percent at the beginning of 2012, it is expected to remain below 10 percent during the second half of 2012 — a mirror image of 2011. With lower inflation, interest rates may fall, which will allow the exchange rate to return to more competitive levels and overall spur economic activity. However, Kenya’s growth remains below the African average and substantially below that of its EAC partners. Sub-Saharan Africa is expected to grow at 5.3 percent in 2012 and 5.6 percent in 2013, and the EAC continues to outperform the region, with average growth likely exceeding 6 percent in both years, making it one of the best performing regions in the world. Such strong performance is to the benefit of all countries in the region. Even with growth at 5 percent, Kenya’s per-capita income is now exceeding US$800 for the first time, and the country is firmly on the path to Middle Income status.
Debt levels have returned to below 45 percent of GDP: if Kenya were part of the European Union, it would be one of its least-indebted members. With relatively low levels of debt, a stable exchange rate and declining inflation, Kenya again has the space to run slightly higher fiscal deficits to maintain public investment programs, especially in infrastructure. In the medium- term, Kenya will also need additional fiscal resources to manage the transition to a system of devolved government.
Kenya has avoided a severe economic downturn, but structural weaknesses remain and they make the country vulnerable to renewed instability. Kenya’s economy is out of balance and the external position has become even more vulnerable as the country’s current account deficit has skyrocketed and could reach 15 percent of GDP in 2012. This is among the worst external balances in the world and poses a significant risk to Kenya’s economic stability. An additional external shock, especially a sharp rise in oil prices, would trigger severe economic stress, especially if accompanied by capital outflows.
Over the last decade, Kenya’s imports have grown faster than its exports. Since mid-2011, Kenya’s earnings from its top four exports have not been sufficient to pay
for its oil imports. While earnings from traditional exports have grown (especially tea and coffee) thanks to higher global prices, the import bill has in recent years has grown even faster, on account of high oil prices. In 2011 alone, the import bill rose by 23 percent. This has widened the current account deficit, threatening macroeconomic stability.
According to the report, young Kenyans face considerable hardship, discrimination and inequality of opportunity in accessing good quality jobs, even though the ratio of Kenyans engaged in family farms has declined, from two-thirds to less than half of the workforce, in the past two decades due to Kenya’s rapid urbanization.
The Kenya Economic Update launched today projects a growth rate of 4.3 percent in 2012, slightly lower than the 4.4 percent of Gross Domestic Product (GDP) realized in 2011, but is optimistic that the economy has stabilized after a rocky start earlier in the year. The December 2012 issue also underlines the need for Kenya to create more jobs for its burgeoning, educated youth population.
―Economic instability, weaknesses in infrastructure and pervasive corruption limit business growth and job creation,‖ says Gabriel Demombynes, the Bank’s Senior Poverty Economist for Kenya and one of the lead authors of the report. ―A job creation strategy is needed to move more Kenyans into better wage jobs, and policy makers, especially at local levels, should embrace informal household enterprises as legitimate parts of the Kenyan economy to enable them contribute to increasing productivity.‖
The report urges the government to adopt tax and expenditure policies that will create incentives for savings and investment for the economy to continue expanding and create quality jobs. It recommends specific actions for creating high-productivity wage jobs, including investing in transport and electricity, upgrading skills and eliminating job-smothering corruption.
It also underlines the need for Kenya to expand its exports and diversify its markets to mitigate the impact of the recession in the Euro zone, which is Kenya’s largest trading partner and also its key source for the tourism industry. This will be critical for Kenya to reverse its current account deficit, which remains above 10 percent of GDP despite lower oil prices.
―The current account deficit could undermine Kenya’s long term stability and growth prospects,‖ says John Randa, the Bank’s Economist for Kenya, the other lead author of the report. ―Kenya will need to undertake structural reforms to correct external imbalances and also build a stronger foundation for growth.‖
Strong recovery to the end of the year, supported by declining inflation and interest rates, will enable the Central Bank to loosen monetary policy to stimulate growth, says the report. But Kenya’s prospects in the longer term will be determined by its capacity to manage political, economic and weather-related shocks, which have become the norm rather than the exception in the past five years. Political violence following the 2007 elections followed by severe drought in the Horn of Africa and a global financial crisis undermined growth prospects during this period.
The Kenya Economic Update is produced by the Bank in collaboration with Economic Round Table members, including the Office of the Prime Minister, the Ministry of Finance, the Ministry of Planning and National Development, the Kenya National Bureau of Statistics, the Kenya Revenue Authority and the National Economic and Social Council and the International Monetary Fund.
COMPONENTS OF ECONOMIC ENVIRONMENT
Income and wealth: Income in an economy is measured by GDP, GNP and per capita income. High values of these factors show a progressive economic environment. Employment levels: High employment represents a positive picture of the economy.However, there are many forms of unemployment, including partial employment and disguised unemployment. Productivity: This is the output generated from a given amount of inputs. High levels of productivity support the economic environment. Classifications of the Economic Environment
Microeconomic environment: It includes the economic environment of a particular industry, firm or household and is primarily concerned with price determination of individual factors. The main consideration from a microeconomic
perspective is the efficient allocation of resources. This is necessary to maximize total output. Macroeconomic environment: It includes all the economic factors in totality. The main consideration here is the determination of the levels of income and employment in the economy. Over the course of the twentieth century, the focus has shifted from cities and countries to the global economy being the chief economic unit.
Factors Affecting the Economic Environment
Inflation and deflation: Inflationary and deflationary pressures alter the purchasing power of money. This has a direct impact on consumer spending, business investment, employment rates, government programs and tax policies. Interest rates: Interest rates determine the cost of borrowing and the flow of money towards businesses. Exchange rates: This impacts the price of imports, the profits made by exporters and investors and employment levels (also through the impact on the tourism industry). Monetary and fiscal policy: This helps in attaining full employment, price stability and economic growth. The economic environment is also influenced by various political, social and technological factors. These include a change in government and the development of new technology and business tools. Micro Environment:- Micro Environment can followed area are coverd:- Firms There are three Firms generate economy are as follow
1.1 Agriculture:-
Agricultural production grew by 4.7% annually during the same period, stimulated by redistributing estates, diffusing new crop strains, and opening new areas to cultivation. After experiencing moderately high growth rates during the 1960s and 1970s, Kenya's economic performance during the last two decades has been far below its potential. The economy grew by an annual average of only 1.5% between 1997 and 2002, which was below the population growth estimated at 2.5% per annum, leading to a decline in per capita incomes. The decline in economic performance in the last two decades was largely due to inappropriate agricultural policies, inadequate credit, and poor international terms of trade contributing to the decline in agriculture.
1.2 INDUSTRY SECTOR
Kenya’s industry sectors consist of mining, horticulture, tourism, manufacturing, electricity and information technology. Agriculture is the mainstay of the Kenyan economy. It engages more than 75% of the population and contributes almost 21% to the country's GDP. However, industrial output accounts for only 16% of the national production.
1.3 SERVICES
Accounting for approximately 56 percent of GDP, the service, or tertiary sector, is the most valuable area of economic activity in the domestic economy. The service sector consists mainly of 2 major areas: tourism and financial activities. Retail , which includes a significant number of restaurants in the urban centers, is dominated by small-scale street vendors, many of whom form part of the informal sector . In total, 144,300 Kenyans were involved in retail in 1996, not counting those that were engaged in the informal sector. The informal sector itself, known in Kenya as "jua kali," employs approximately 64 percent of all Kenyan urban workers.
It is also the most dynamic sector in the economy in terms of job creation, accounting for about 90 percent of new jobs outside the smallholder farm sector. Informal sector activities, such as carpentry, motor vehicle repair, tailoring, hawking , and selling various fruits, vegetables, and other commodities, are largely service- based. Though the government recognizes the value of the informal sector, the U.S. Department of State Country Commercial Guide 2000 argues that it could do more to develop needed infrastructure.
GDP= GROSS DOMESTIC PRODUCT
each year after more than a decade of contraction.
10per cent annually by 2012, as stipulated in the Government plan Vision 2030. ic inequalities between classes and ethnic groups, the regional economic imbalances and the growing youth unemployment, as well as the post-election instability in 2007, will almost certainly lead to a downward revision of these projections. 10 per cent fall in the number of people living below the poverty line. services produced in a given time period. previous quarter.
the population.
GNP=GROSS NATIONAL PRODUCT
Gross national product is also a calculator of economic activity.
When calculating GNP the value of what foreign countries earn in the given country is subtracted from the value. Ex: if a us business had a manufacturing plant located in India, any profit made by the plant would not be calculated in GDP, but would be accounted for in the GNP.
Consequently , those both GDP and GNP are measured of economic activities.
The two values can be extremely different.
GDP concern is border.
EMPLOYMENT
Unemployment rate in Kenya increased in 2011 40% from 12.70% in 2006.
Unemployment rate in Kenya is reported by the Kenya national bureau of statistics.
In Kenya, the unemployment rate measures the number of people actively looking for a job as a percentage of labour force. Derivation of genuine investment as % of GDP:-
Economic Rates Kenya India
Domestic Ner Investment 10.0 11.74
Education 1.29 3.29
Energy 1.91 2.89
Companies Net Investment 1.35 1.17
Minral 0.35 0.46
Forest 2.69 1.05
Genuine Investment 8.57 9.47
Genuine investment corrected for total factor productivity growth and population growth
Rate Factor Wise Kenya India Genuine Investment 8.57 9.47 Growth Of Genuine 1.49 1.42
Wealth(GW) Population Growth 1.78 1.99
Growth of GW Per Capita 0.88 -0.57 TFP Growth 0.78 0.64 Final Growth genuine 0.46 0.54
Wealth Per Capita Growth GDP Capita 1.98 2.96
EXECUTIVE SUMMARY ON SOCIAL OVERVIEW OF KENYA:
Enrolment no. Name of the Students Faculty Guide 117340592108 ANKITA DIPAK MALKAN 117340592109 PRATIK VIRENDRABHAI RAGHANI
117340592110 VIVEK PANKAJKUMAR DAVE Prof. Meeta Mandaviya 117340592115 NEMISH PANKAJBHAI SHAH 117340592116 SWATI DAYALAL DHOKIYA 117340592117 ASHISH NARENDRABHAI ADROJA
Social Overview
Kenya faces tremendous development challenges in nearly all sectors: Poverty is endemic, deforestation is continuing, and infant mortality remains high. Still, most development efforts— whether by government or nongovernmental organizations— focus resources and expertise on one particular area, such as reforestation or improving maternal and child health, rather than integrating interrelated concerns into a holistic approach. While a number of policies and programs linking population, health, and environment concerns have been tried in Kenya, an assessment of the overall “state of integration” had not been undertaken until recently (see Box 1). The lessons from this assessment, undertaken by the National Coordinating Agency for Population and Development and the University of Nairobi, suggest that integrated programs require greater efforts in planning, coordination, and communication, but they can yield substantial rewards for communities and the environment, including reduced dependence on forest resources, greater food security, cleaner drinking water, and increased access to health services. Kenya’s development history has been unsteady since the country gained its independence from Great Britain in 1963 (see Box 2). There has been some progress in recent years, however. Education reforms, such as free and compulsory education in primary schools, have translated into more children in school with a good balance between girls and boys.2 HIV prevalence fell from 6.8 percent to 6.1 percent between 2003 and 2005.3 And since 2003, Kenya has seen positive economic gains, with the gross domestic product (GDP) growth rate reaching 5.8 percent in 2005. Millennium Development Goals In September 2000, Kenya pledged to achieve the UN Millennium Development Goals (MDGs) by the target date of 2015. A national MDGs task force—consisting of the Ministry of Planning and National Development, the UN system, nongovernmental organizations (NGOs), and the private sector—was created to spearhead the efforts to achieve the goals laid out by the declaration.4 So far, Kenya has made noteworthy progress toward meeting two of the eight MDGs: achieving universal primary education (Goal 2), with 90 percent of girls and 95 percent of boys now enrolled in primary school; and combating HIV/AIDS, malaria, and other diseases (Goal 6) Since 2005, Kenya has worked to develop a long-term national development strategy called “Kenya Vision 2030.” The Kenya Vision 2030 envisions a globally competitive and prosperous nation with a high quality of life by 2030. The vision is anchored on three key pillars:
percent per annum over the next 25 years. equitable social development in a clean and secure environment. -based, people-oriented, results- oriented, and accountable democratic political system. The Kenya PHE assessment showed that existing national policies have embraced the spirit of cross- sectoral collaboration. However, the country lacks clear legal frameworks and institutional capacity to carry out policy mandates and recommendations. A review of all the relevant regulatory and structural frameworks is necessary to develop an implementation strategy that will ensure that working across sectors becomes the norm within the various government agencies. Some of the key contentious areas to be considered are institutional guidelines on leadership, coordination, and control of PHE programs and projects; and sharing of institutional budget allocations to finance PHE programs and projects.New initiatives in Kenya are attempting to strengthen cross-sectorial collaboration and coordination, reflected especially in the Kenya Vision 2030 and its economic, social, and political pillars. In addition, the Kenya Poverty Environment Initiative (PEI) was established as a partnership between the Ministry of Planning and National Development and United Nations Development Program in 2007. The purpose of PEI is to include environment concerns in the development policy, planning, and budgeting process by improving understanding of environment-poverty linkages, strengthening the government’s capacity to implement environmental policy that benefits the poor, developing tools for the integration of environment into development plans and budget processes, and increasing effective participation of stakeholders in environment and development policymaking and planning processes Challenges Remain but Integration Is Worthwhile
Some PHE interventions, such as those promoting household hygiene, child immunization, and reforestation, take more time to achieve results and, therefore, require continuous awareness-raising in the targeted communities to keep stakeholders engaged. Interventions that are relatively simple and cheap are more readily adopted than interventions that require heavier investments, thereby limiting their popularity and sustainability. And interventions to improve livelihoods can be ad¬versely affected by market circumstances outside the projects’ control.
Lack of consistent data across sectors, particularly at the local level, makes evaluation of PHEprograms extremely difficult. Furthermore, cross-sectorial research is still very limited and without standard methodologies, variables, and indicators. This hinders scientific contributions to the discussion on the benefits and challenges of integration and exacerbates the research-to-policy gap.
The Kenya PHE assessment concluded that integrated approaches—at both project and policy levels—are more complicated and time-consuming in the preliminary planning phases, requiring greater communication and coordination than single-sector efforts. Yet once strategies are in place to implement integrated policies and programs, the results—in terms of program outcomes and bureaucratic efficiencies—surpass those of single-sector programs.
What does Kenya need to do to continue these efforts? The assessment showed that existing policies have embraced the spirit of cross-sectoral collaboration, but that Kenya lacks the clear legal frameworks and institutional guidelines necessary to make integrated projects a reality and help the nation realize the Kenya Vision 2030. Enhancing integration among sectors will require:
Establishing a strong institutional framework that links existing policies and creates incen-tives for pursuing integrated approaches; Building institutional capacity to link activities among sectors effectively and to manage multi- faceted programs;
nd networking among organizations in different sectors;
awareness and win policymakers’ support for cross-sectorial collaboration; and
ation, which is a key ingredient for PHE integration.
Strengthening human and institutional capacity will make it possible to fully reap the benefits of integration in Kenya’s development efforts in the long term. The result
will be an improved quality of life for the Kenyan people and a healthier environment for their children to inherit.
HUMAN DEVELOPED INDEX
Kenya is ranked 143 out of 187 countries surveyed in the 2011 Human Development Index (HDI), Australia and the Netherlands lead the world, while the Democratic Republic of the Congo, Niger and Burundi are at the bottom of the Human Development Report’s annual rankings of national achievement in health, education and income, released today by the United Nations Development Programme (UNDP). In 1990, the United Nations Development Program (UNDP) transformed the landscape of development theory, measurement, and policy with the publication of its first annual Human Development Report (HDR) and the introduction of the Human Development Index.
The Human Development Index, or HDI, embodies AmartyaSen’s “capabilities” approach to understanding human well-being, which emphasizes the importance of ends (like a decent standard of living) over means (like income per capita) (Sen 1985). Key capabilities are instrumentalized in HDI by the inclusion of proxies for three important ends of development: access to health, education, and goods. Empowered by these, and other, capabilities, individuals can achieve their desired state of being.
Human development, which is about expanding people’s choices, builds on shared natural resources. Promoting human development requires addressing sustainability—locally, nationally and globally— and this can and should be done in ways that are equitable and empowering.
Despite high economic and administrative potential associated with its traditional political stability and comparatively highly educated workforce, Kenya remains one of the poorest countries in the world. It ranks 147th worldwide on the Human Development Index (HDI), and its human development has been stagnating for years despite increased rates of economic growth since 2002.
HDI has been the centerpiece of the HDRs for 17 years, and the latest edition, HDR 2006, includes HDI rankings for 177 countries. In HDI, component indices for life expectancy, literacy, school enrollment, and income are combined together into a single index that can be used to compare the level of human well-being among countries or to monitor one country’s progress over time. HDI provides an alternative to the still common practice of evaluating a country’s progress in development based on per capita national income.
The United States and Israel drop in the Report’s Inequality-adjusted HDI (IHDI) mainly because of income inequality, though health care is also a factor in the US ranking change, while wide education gaps between generations detract from the Republic of Korea’s IHDI performance.
“The Inequality-adjusted Human Development Index helps us assess better the levels of development for all segments of society, rather than for just the mythical ‘average’ person,” said MiloradKovacevic, chief statistician for the Human Development Report. “We consider health and education distribution to be just as important in this equation as income, and the data show great inequities in many countries.”
Since HDI’s first introduction in 1990, many scholars have offered critiques of its underlying data and its method of calculation. In many cases, the UNDP has responded by improving HDI based on these critiques.
The human development approach has enduring relevance in making sense of our world and addressing challenges now and in the future. Last year’s 20th anniversary Human Development Report (HDR) celebrated the concept ofhuman development, emphasizing how equity, empowerment and sustainability expand people’s choices.
We have to value sustainability because future generations should have at least the same possibilities as people today. Similarly, all inequitable processes are unjust: people’s chances at better lives should not be constrained by factors outside theircontrol. Inequalities are especially unjust when particular groups, whether because of gender, race or birthplace, are systematically disadvantaged. Human development is the expansion of people’s freedoms and capabilities to lead lives that they value and have reason to value. It is about expanding choices. Freedoms and capabilities are a more expansive notion than basic needs.Many ends are necessary for a “good life,” ends that can be intrinsically as well as instrumentally valuable— we may value biodiversity, for example, or natural beauty, independently of its contribution to our living standards. “Sustainable human development is the expansion of the substantive freedoms of people today while making reasonable efforts to avoid seriously compromising
those of future generations.”AmartyaSen and Martha Nussbaum are together credited with the origination of the “capabilities” approach to human well-being based on Rawlsian philosophy (Pattanaik 1994). Like Aristotle, Sen and Nussbaum focused attention on what human beings can do, instead of on what they have. Moving the discussion away from utility and towards “capabilities” allowed Sen and Nussbaum to distinguish means (like money) from ends (like well-being or freedom) (Crocker 1992, 1995).
Capabilities are the abilities to do certain things or to achieve desired states of being. They are empowerment, the power to obtain what you desire, utilize what you obtain in the way that you desire, and be who you want to be. Goods, on the other hand, are merely things that you possess. Capabilities allow you to use goods in ways that are meaningful to you. Sen uses a further term, “functionings,” to refer to the capabilities that a person actually uses or participates in. Capabilities, then, are the full set of functionings that are feasible for a given person. For example, with one capabilities set, fasting may be the only choice; with another set, fasting may be one of many choices. In addition, capabilities can have intrinsic value by adding worthwhile options or positive freedoms to one’s life capabilities: (1) life; (2) bodily health; (3) bodily integrity; (4) senses, imagination, and thought; (5) emotions; (6) practical reason; (7) affiliation; (8) other species; (9) play; and (10) control over one’s environment.
After World War II and note that from its beginnings this field had “an overarching preoccupation with the growth of real income per capita.” The most common measure of aggregate human well-being is now – as it has been for over 50 years – national income, usually expressed as per capita gross national product (GNP) or per capita gross domestic product (GDP).
GNP is the sum of all consumption, investment, and government spending by a country’s nationals, whether within the national territory or not. In 1953, the United Nations published “A System of Statistical Tables” that gives clear, precise instructions for constructing national income accounts; these tables, with some modifications, are still the standard for national income accounts today. The human development process is one of enlarging people’s choices. It focuses on three essential components: a long and healthy life, knowledge, and “access to resources needed for a decent standard of living” because, “If these essential choices are not available, many other opportunities remain inaccessible.”
Increasing evidence points to widespread environmental degradation around the world and potential future deterioration. Because the extent of future changes is uncertain, we explore a range of predictions and consider the insights for human development.
In 1990, the HDI is the heart of the HDRs. HDI is a measure of human development that combines proxies for three important human capabilities: health, education, and a decent standard of living. Health (H) is represented by life expectancy (LE), education by literacy (LIT) and school enrollment (ENR) (the literacy and school enrollment indices are combined in weighted average as the education (E) index), and standard of living by GDP per capita (Y). The value for each these components is transformed into an index using a normalization formula in which the actual value is compared to a stylized range of values across all countries:
Comparison In Kenya comparing with India: Be 22.3 times more likely to have HIV/AIDS The number of adults living with HIV/AIDS in Kenya is 6.70% while in India it is 0.30% Have 3.7 times more chance of being unemployed Kenya has an unemployment rate of 40.00% while India has 10.70% Use 74.92% less electricity The per capita consumption of electricity in Kenya is 121kWh while in India it is 484kWh Have 64.67% more babies The annual number of births per 1,000 people in Kenya is 35.14 while in India it is 21.34 Make 48.39% less money The GDP per capita in Kenya is $1,600 while in India it is $3,100 Die 7.64 years sooner The life expectancy at birth in Kenya is 58.82 while in India it is 66.46
Consume 17.71% less oil Kenya consumes 0.0787 gallons of oil per day per capita while India consumes 0.095 Experience 15.49% more of a class divide The GINI index measures the degree of inequality in the distribution of family income. In Kenya is 42.50 while in India it is 36.80 Spend 22.09% less money on health care Per capita public and private health expenditures combined in Kenya are $67 USD while India spends $86 USD
Have 8.87% more chance of dying in infancy The number of deaths of infants under one year old in a given year per 1,000 live births in Kenya is 53.49 while in India it is 49.13
EXECUTIVE SUMMERY ON TECHNOLOGY OF KENYA:
Enrolment No Name of the Student Faculty Guide 117340592166 MEHULKUMAR MOHANLAL JOGADIYA Prof. Ritesh Khatwani 117340592167 YOGESH KHIMAJIBHAI AHIR 117340592169 ANJALI RAJENDRABHAI JADIYA 117340592170 ROHITKUMAR JAYNATHBHAI JAYESH 117340592171 DHANRAJ BHAGWANBHAI BALCHANDANI 117340592172 YASH JAYANTKUMAR RAVAL
OVERVIEW OF TECHNOLOGY IN KENYA
Technology is rapidly changing globally. The adoption of new technology as innovators, pragmatics, early majority, late majority or laggards will determine the speed of a country development. Technology will impact on areas of generic competition for Kenya namely cost reduction, niche focus and in different sectors of development. As observed in the proceeding paragraphs:
Aviation Industry
The Kenya aviation industry has also leveraged on ST&I. Kenya Airways has used technology to market it services after bench marking with other airlines. It has computerized baggage handling system, online booking, online checking-in system, reduction in training costs by use of flight simulators and modernizing the equipment including fuel efficient aircraft. The aviation sector supports 46,000 jobs in Kenya and contributes KES 24.8 billion (1.1%) to Kenyan GDP. In addition, the connections created between cities and markets represent an important infrastructure asset that generates benefits through enabling foreign direct investment, business clusters, specialization and other spill-over that impacts on economic productive capacity.11 Additionally, the aviation sector pays over KES 3.2 billion in taxes including income tax receipts from employees, social security contributions and corporation tax levied on profits, with a further KES 1.4 billion of revenue coming from passenger departure taxes, including VAT. It is estimated that an additional KES 1.5 billion of government revenue is raised via the aviation sector’s supply chain and another KES 1.4 billion through taxation of the activities supported by the spending of employees of both the aviation sector and its supply chain. The introduction of integrated radar air traffic control system has improved expeditious air traffic flow and safety in the Kenyan airspace.
The above shows that Kenya in line with the technocratic progress theory, has applied ST&I in several aspects of its aviation sector which has yielded significant growth and contribution to the Kenyan economy.
Agriculture and Rural Development
Technology has transformed the agricultural sector by replacing the traditional farming methods with contemporary practices. For example, the floriculture industry in Kenya is an African example of what is possible with access to technologies, investment funds and enabling policies12. Another example is in banana farming which has also improved with the introduction of Tissue Culture (TC) techniques. The basis of the technology is the ability of many plant species to regenerate a whole plant from a shoot tip13. In economic terms this improves the productivity of every citizen which overall leads to growth in GDP.
Defense and Security Sector
The Kenya Defense Forces (KDF) has leverage on science and technology in several aspects of its operational activities. Notably, the surveillance of the international boundary using Unmanned Aerial Vehicles (UAV) which is a force multiplier making surveillance Much easier and cost effective. The “Ngano Project” is another application of ST& Where bullets for small arms are being manufactured.
Kenya Defense Forces has also applied ST to its human resource development, logistics planning which has enhanced its operational and administrative effectiveness. It is to be noted that the Integrated Payroll and Personnel Database (IPPD) programme used as payroll management tool in civil service was an innovation of the Ministry of State for Defense. In order to develop into a regional force capable of coordinating national as well as sub regional security there is need to develop its capacity by way of developing its Defense industrial complex. Technology has enabled KDF to integrate it surveillance into one command and control centre.
The ongoing installation of Close Circuit Television (CCTV) cameras in strategic areas is enhancing security in Nairobi. This would drastically mitigate the lack of manpower to patrol every area of the country as it is a force multiplier. The government could collaborate with the private sector for effective and efficient utilization of available resource.
Trade and Industry
Growth in trade has been improved using e-commerce in areas such as business transactions, M-PESA, on line shopping etc. Technology has also enhanced labour productivity, stimulation of research and development activities, and promotion of modern and appropriate technology in all sectors of Trade and Industry.14Kenya has adopted on line clearance of goods at the border posts reducing delays and cost of doing business.
Physical Infrastructure
Modern technology has facilitated faster construction/improvement of infrastructure countrywide. Some of the examples include Thika Super-highway and urban railway network. This has eased traffic congestion especially within Nairobi and the government needs to extend the same to other parts of the country. Traffic congestion is expensive to the country in economic terms.
Energy
ST & I has enabled Kenya to exploit other sources of renewable energy such as solar energy, wind power, Biomass energy, electricity from crop residue ,biogas among others and at the same time providing low power consumption appliances such as energy saving bulbs, energy “jikos’ among others.
Tourism sector
Technology has positively impacted on Tourism sector in Kenya as marketing has become a desk operation. Entry in the Game Parks is by use of safari cards and reduction of cycle times improving customer satisfaction services. Use of electronic tracking devices and use of helicopters has made management of parks easier and effective.
Environment Sector
Modern technology has produced many benefits for the world, in industry and in everyday life. With more and more technological breakthroughs, there have been many positive ecological impacts. Technology is enabling the management of endangered species and the habitats. By use of collars the endangered species movement and spatial distribution is monitored for security and management decision from a desk. Forest ecosystems are monitored by use of satellite imagery. Technology is also used in habitat mapping for management decisions. Despite the great advantage of using technology, the impact on Kenya’s development level is relatively low. This can be attributed to several factors ranging from policy gaps to poor implementation.
There are considerable negative impacts as well. Technology produces wastes that finally find its way to the environment. Each wave of technology creates a set of waste previously unknown to humans; toxic waste, radioactive waste, electronic waste. One of the main problems is the lack of effective ways to remove these pollutants on a large scale expediently.
One of the largest contributors to gases in the atmosphere are the gases produced by the combustion process used to produce energy. In the United States alone, 83% of this energy comes from a combustion process. The combustion process is an effective way to produce energy for a wide range sources. The negative aspect of the combustion process However, is the amount of harmful gases that it produces. These gases can have a devastating impact on the ozone layer and contribute to what is known as the "Greenhouse Effect".
In Kenya the effects of this climate change have been felt with severe droughts and floods estimated to cause an annualized reduction in GDP of 2.4 per cent (approximately Kshs. 16 billion).17 Between 1999 and 2010 Kenya spent an average of USD 173.2 million each year on food and non-food emergency operations.
The 1999-2001 droughts led to a loss of livestock worth US$77 million.Water resources in Kenya are increasingly becoming polluted from both point and non- point sources due to technological advances in agriculture, urbanisation, and industry which contribute to organic, inorganic and aesthetic pollution of water. Ground-water is threatened by intrusion of saline water in the coastal region, leachates from solid waste dumps, and infiltration of fertilizer and pesticide residues.
The five principal sources of water pollution in Kenya include:
Agricultural activities which produce sediments and agro-chemical residues (biocides and fertilizers).
Industrial processing of agricultural and forestry products which produce liquid effluents, gaseous emissions and solid wastes.
Industrial manufacturing waste such as heavy metals, acids, dyes, oils.
Domestic/municipal effluents such as sewage and garbage. Sedimentation, soil erosion and mining which produces tailings and effluents.
The enactment of the Science and Technology Act, Cap 250 of the Laws of Kenya in 1977.20 Lead to the establishment of Advisory Research Committees (ARCs) and the National Council for Science and Technology (NCST) to serve as advisory institutions to the Government on matters of science and technology. The following are some of the achievements:
Agricultural Sector
Application of ST& I in Agriculture, has lead to increased productivity through use of modern farming technologies. The Genetically Modified Organisms (GMOs) maize is another achievement in agriculture. Kenya is the fourth country in Africa to have GMO-ready Laws. Other countries include South Africa, Burkina Faso and Egypt. GMO technology is one of the solutions to Kenya’s food in-security.
Health
There has been good progress towards developing the Kenyan health system to international standards through Science and Technology in quality service and standards improvement. Others include research in multi-sectoral health issues including infectious diseases, HIV/Aids, TB, Malaria and emerging infections, traditional knowledge and resources, and commercial production of traditional plants for medical use. The country has adopted ST&I technology in the medical field including cancer, renal and heart ailments detection and treatment.
Human Resource Development
An evaluation on the status of Technical, Industrial, Vocational and Entrepreneurship Training institutions (TIVET) was carried out in 2003. This provided baseline data for the ongoing reforms while the audit of equipment, infrastructure, staff, students’ enrolment and training programme at National polytechnics and Technical training institutions carried out in 2004/2005; provided data for upgrading of polytechnics as centers of excellence. On the other hand, skills inventory, training needs assessment and development of curriculum structures was undertaken in 2005 as part of developing National Training Strategy. The development of Sessional paper No. 1 of 2005 on policy framework for education, Training and Research resulted into reforms in this sector. Production Unit policy for public training institutions directorate was established in 2006 and this enabled the harmonisation and production activities. The measures combined with government sponsorship saw an increase of students from 26,259 in 1999 to 44,215 in 2004. The High Education Science, Technology and Innovations (HESTI) continue to make progress toward achieving the millennium development goals (MDGs) and Vision 2030. The Ministry finalized drafting the ST&I Bill, University Education Bill and Technical Vocational and Entrepreneurial Training (TIVET) Bill21, enabling environment and institutional reforms necessary for achieving sector objectives.
Specific key achievements include:
technical institutes are being upgraded to national polytechnic status.
technical institutes are being developed gradually to become centers of excellence and construction of 13 new technical institutes is underway.
Enrolment in public TIVET institutions rose from 34,453 in 2000 to 59,835 in 2010.
The amount of money allocated to the National Research Fund rose from Ksh. 70 million in 2005/6 to Kshs 263 million in 2009/10.
Introduction of computer lessons in secondary schools with government donated computers is ongoing. Further ICT, e-learning and Multimedia Training is being undertaken in Tertiary and Universities.
All the above is aimed at the creation of a critical mass of a human resource to support S&T development and sustainability.
Information Communication Technology (ICT)
The government and other stakeholders have made efforts in strengthening and promoting the ICT sector in the country. This includes capacity building, facilitation/development and growth of a robust ICT and infrastructure to stimulate and support local ICT industry growth. Others include establishment of e- government, V-SAT communication, and Global System Mobile network (GSM), integration and popularization of the use of ICT in learning institutions, workplaces and rural communities.
In Telecommunication, the laying of fibre optic cables across the country has been a revolutionary and innovations such as M-PESA have gone a long way to transform businesses.
Major achievements in ICT:
E-Government is a reality and has been for more than five years now. The website www.e-government.go.ke, for instance, reveals some of the services on offer and what the Government envisages to achieve by going digital. The simulcast period when period of broadcasting in both analogue and digital formats is on-going. By 2012, the country plans to completely switch over to the digital platform ahead of the global deadline of June 2015 spearheaded by the ITU. The ITU’s Regional Radio Communications Conference (RRC 06) set 2015 as the global deadline.
The Government has spent Sh1 billion to purchase 5,000 acres of land where it intends to put up an ICT park to house BPOs and other ICT businesses. Kenya’s bandwidth capacity, regional economic and transportation hub to eastern and southern Africa also makes Kenya stand out as a preferred destination for many investors. Kenya has developed national capacity in geological and geo-information systems coordination of the seismology. Two stations for detecting earth disturbances have been set up in Kenya, one at Karura forest and the other at Kilimambogo linking Kenya to Global verification Regime for early detection of nuclear tests and explosions in collaboration with the Comprehensive Test Ban Treaty Organization (CTBTO) and the International Atomic Energy Agency (IAEA). The development of Biotechnology Policy and the Bio safety Coordination Framework as well as the Bio safety Law.
Energy Production
Kenya has made efforts in developing energy sources in a bid to become self- reliant. A reliable and uninterrupted power is essential for development. So far some good progress has been made to improve the power supply and connectivity across the country. Kenya has diversified from hydro and now uses Geothermal and other renewable energy sources. The output has risen from 960MW to 1600MW installed capacity in the last 10 year.
EXISTING POLICIES ON TECHNOLOGY IN KENYA
Policies
In 1977 the Government of Kenya (GoK) enacted Science and Technology Act 250 of the laws of Kenya. The Act established National Council for Science and Technology (NCST)22 as statutory institution of the GoK. NCST purpose is to provide machinery for making available to the Government advice upon all matters relating to the scientific and technological activities and for coordination of research and experimental development together with matters incidental and connected with ST&I The Act also gave birth to Kenya Agricultural Research Institute (KARI), Kenya Medical Research Institute (KEMRI), Kenya Industrial Estates (KIE), Kenya Industrial Property Institute (KIPI), among many others. The ST&I linkages to economy are illustrated below:
The following diagram is adapted from Ministry of Science & Technology Presentation to the Global Forum on Building Science, Technology and Innovation Capacity for Sustainable Growth and Poverty Reduction Washington, D.C. 12-15 February 2007. From the diagram it is clear that there is lack of central institution for ST&I coordination, inadequate M&E, duplication of efforts, scattered sectoral policies, good practices are not shared/poor dissemination of R&D.
In 2008 May, a presidential circular provided for a comprehensive and all-inclusive Science, and Technology and Innovative policy to guide and promote the development, application, integration and innovation into the national development process. Sectoral Policies on ST&I include:
Ministry of Industrialization
National Industrialization Policy 2011-2015 and beyond underpins national industrialization process in Kenya over five years 2011-2015 and beyond. The policy is conceptualized as a revitalization document that underscores building solid foundation of various efforts the GoK in past to craft policy interventions to propel the country forward in the ongoing quest for industrial growth and development. Key among these policy documents includes the Kenya Vision 2030, with its premium on average annual growth rate of 10 percent and objective to drive Kenya into newly industrialized nation with higher quality of life. Institutions to actualize ST&I include KIRDI , Kenya Bureau of Standards (KEBS) , Kenya Industrial Estates, Kenya Industrial Property Institute (KIPI), Numerical Machines Complex (NMC) among others.
Ministry of Information and Communications
The Ministry’s policies are informed by International Telecommunications Union (ITU) guidelines, rules and regulations governing the use of electromagnetic spectrum. Kenya has witnessed significant growth in the ICT sector as demonstrated by the number of telephone lines, Internet Service Providers (ISPs), the number of Internet users, broadcasting stations, and market share of each one of them. The Government liberalised the mobile cellular market and currently, there are four mobile cellular operators (Orange Telkom, Safaricom, Airtel, and YU). The Policy and Regulatory Framework, in 1997, the Government released the Telecommunications and Postal Sector Policy Guidelines that created an environment for competition in several market segments and paved way to the enactment of the Kenya Communications Act of 199823 , Act established: Communication Commission of Kenya, National Communications Secretariat, Communications Appeals Tribunal, Telkom Kenya Limited, Postal Corporation of Kenya.
Ministry of Agriculture
Strategic Plan 2008-2012 sets the vision and mission and key objectives that are to be realized in the five years24. It is an undertaking by the Ministry to improve service delivery in line with national aspirations as articulated in the Vision 2030 strategy and First Medium Plan (MTP 2008-2012). The Strategic Plan aims to principally accelerate the transformation of agriculture into a competitive oriented enterprise.
This Strategic Plan stresses the importance of a formal Monitoring & Evaluation (M&E) Framework as a key platform to measure the implementation status. Key institutions on food security include the Kenya Seed Company, Agriculture Development Corporation (ADC), KEPHIS, and KARI. The ministry has managed production through research on tissue culture technology, development of livestock breeding (AI), recombinant vaccines and Diagnostic tests.
Ministry of Energy Policies
The Ministry is a key enabler for development in terms of cheap and accessible power supply to actualize ST& I. The policies are:
National Energy Policy (Sessional Paper No. 4 of 2004) -Ministry of Energy, 2004.
Energy Act, 2006 - Government of Kenya, 200625. – (Establishes ERC).
Feed-in-Tariffs (FiTs) for REs (2008) – (wind, biomass & SHP)
Draft policy on strategy for the development of Bio-diesel industry in Kenya (2008- 2012).
Draft Bioethanol Strategy 2009-2012.
Energy Regulatory Commission (ERC) – Body under the Monitoring and Evaluation (M&E) responsible for energy regulation, licensing, permits, protection of investors and customers.
Kenya Electricity Generating Company (KENGEN) – Responsible for electricity generation together with IPPs.
Geothermal Development Company (GDC) – Responsible for the development of the geothermal energy sector.
Kenya Electricity Transmission Company (KETRACO) – Responsible for the development of the grid electricity distribution system.
Kenya Electricity and Lighting Company (KPLC) – Responsible for electricity connection to customers throughout the country.
Rural Electrification Authority (REA) – Responsible for the improvement of access to electricity in rural areas. Ministry of Livestock
The Ministry has linkages with research associations and by specialist institutions such as ILRI and KARI as well as the ministry of agriculture, areas of policy and legal reforms are: National Livestock Development Policy, Dairy Development Policy, Apiculture Rules and Regulations, Animal Breeding Policy, ASAL Land Use Policy, Animal Feeds Policy among others.
Other policies made to address ST&I initiatives in the country:
Seasonal Paper NO.5 of 1982 on Science and Technology for Development.
Seasonal Paper NO.2 1992 on small enterprise and Jua Kali Development in Kenya.
Seasonal Paper No: 1 of 2005 on a Policy Framework for Education Training and Research.
Kenya faces the following challenges in the utilization of ST& I:
Lack of emphasis in sciences in the Education System: In Kenya most of the technical institutions were upgraded to universities in the last two decades resulting to a serious shortage of the critical mass on ST &I at the tactical level.
Inadequate funding towards Science, Technology and Innovation (ST&I):
Kenya spends less than 0.3% of its Gross Domestic Product (GDP) in R&D in comparison with the BRICS (Brazil, Russia, India, China and Singapore) countries where 10% of GDP is devoted to R&D.
Weak application of the R&D: Kenya has insufficient focus towards R & D that would enable sustainable industrial development. Kenya’s R&D findings are not tried in the industrial sector and have low impact on development.
Policy Level Commitment: In Kenya, ST&I has been divorced from the mainstream of national economic activities due to huge gap between policy formulation, implementation and consequently lack of good will and its support at the policy level. The link between ST&I policy and macro-economic policies has not been fully integrated and stakeholders at national level should be involved in the formulation and implementation of ST&I policies.
Ineffective enforcement mechanism on monitoring and evaluation on implementation of ST & I policies and initiatives.
Cost of living between India and Kenya:
Index difference:
• Consumer Prices in Kenya are 93.10% higher than in India
• Consumer Prices Including Rent in Kenya are 103.31% higher than in India
• Rent Prices in Kenya are 149.68% higher than in India
• Restaurant Prices in Kenya are 98.28% higher than in India
• Groceries Prices in Kenya are 97.48% higher than in India
• Local Purchasing Power in Kenya is 37.46% lower than in India.
3 EXECUTIVE SUMMERY ON ENVIRONMENT OVERVIEW OF KENYA
Enrolment no Name of the Students Faculty Guide 117340592128 HIREN MAGANBHAI BAVISA 117340592131 ALIAKBAR ALIHUSEN BHARMAL
117340592132 SWATI LALITKUMAR MODI Prof. Priya Unadkat 117340592133 VASHAV HASMUKH MAKHECHA 117340592135 DINESH RAMJIBHAI KOTHIYA
4 ECOLOGY ENVIRONMENT OVERVIEW OF KENYA
Climate
The climate of Kenya varies by location; from mostly cool every day, to always warm/hot. The climate along the coast is tropical. This means rainfall and temperatures are higher throughout the year. At the coastal city Mombasa, the air changes from cool to hot, almost every day. The further inside Kenya, the more arid the climate becomes. An arid climate is nearly devoid of rainfall, and temperature swings widely according to the general time of the day/night. For many areas of Kenya, the daytime temperature rises about 12 C (corresponding to a rise of about 22F), almost every day.
Wildlife
Water in Kenya is critically important partly because it is a limited resource but also because some of Kenya’s water systems are recognized internationally for their importance to species diversity and bird migration. Water issues directly affect wildlife, since availability of drinking water is a necessary for survival. Wildlife is also indirectly affected by the human population’s use of water to support livestock and agriculture, which compete with wildlife for limited water resources. Kenya is known for its species diversity and richness; it is in the top 50 countries of species richness. It also has one of the highest percentages of threatened mammal species.
Water Crisis
The Kenya water crisis is the current struggle that Kenya faces to supply clean water to its population. The human population depends heavily on water resources, not only as a drinking water but also for crops, agriculture and livestock and fishing. For example, wetland grasses are used to feed and keep livestock. Human populations throughout Kenya have been affected by a lack of clean drinking water due in large part to the overuse of land and increases in community settlements.
5 Agriculture
Seventy-five per cent regarding functioning Kenyans produced their particular existing around the terrain. Agriculture will be the next greatest contributor to be able to Kenya’s GDP as soon as the services industry. The key funds plants are usually tea and coffee. Huge probability of culture according to rain fall as well as the remarkable variations in the rates regarding farm goods.
Forestry
Less than three percent of Kenya’s total land area today is gazette forest. The term “forest” also includes glade areas and plantations, so the actual area of indigenous forest is very small. In 1997, the whole of Mount Kenya and its surrounding natural forest was decal a World Heritage Site.
Mining and Minerals
Kenya has no significant mineral endowment. Kenya’s mineral production in 2010 reached more than 1 million tons. One of Kenya’s largest foreign-investment projects in recent years is the planned expansion of Magadi Soda.
Tourism
Kenya’s services sector, which contributes about 63 percent of GDP, is dominated by tourism. The tourism sector has exhibited steady growth in most years since independence and by the late 1980s had become the country’s principal source of foreign exchange. Tourism is now Kenya's largest foreign exchange earning sector, followed by flowers, tea, and coffee. In 2006 tourism generated US$803 million, up from US$699 million the previous year.
6 Energy
The most important talk about involving Kenya’s electric power offer derives from hydroelectric programs with ravage down the uppr Covo Sea, plus the Turkwel Mountainous Dam in the west. Kenya possesses still to get hydrocarbon stored about their location, in spite of numerous generations involving spotty query. Environment Stats
FACTS STATS RANK
Areas Under Protection 68 63rd of 146
Carbon Efficiency 0.85 CO2 emissions/$ GDP 91st of 141
CO2 Emissions 10,191 87th of 178 Water pollution from urban and industrial wastes; degradation of water quality Current Issues from increased use of pesticides and fertilizers.
Ecological Footprint 1.15 102nd of 141
Forest Area > % of land area 6.19 % of land area 164th of 195
Known Mammal Species 359 9th of 145
Known Threatened Species 107 16th of 158
Pollution > Carbon Dioxide 1999 2412 92nd of 199 SO2 emissions per populated area 160 thousand metric tons/squad 107th of 141
Threatened Species > Mammal 43 11th of 160
Water > Availability 1.51 thousand cubic metres 95th of 141 Water Pollution, Wood Industry > % of total BOD emissions 1.71% 39.01%
Wildness 39.01% 30th of 141
7 ECOLOGY ENVIRONMENT OVERVIEW OF INDIA
Current ecological environmental issues:
Priority Issues
1. Curbing Global Warming
2. Creating the Clean Energy Future
3. Reviving the World's Oceans
4. Defending Endangered Wildlife and Wild Places
5. Protecting Our Health By Preventing Pollution
6. Ensuring Safe and Sufficient Water
7. Fostering Sustainable Communities
Climate in India India is characterized by a hot tropical climate which varies from region to region. Northern India remains dry, dusty, and unpleasant during the summer months. Tourists can explore the country in all the seasons but by being selective for certain places during certain part of the year.
Indian Wildlife The Government of India have enacted comprehensive legislature in1972 called the Wildlife (Protection) Act for providing legal protection to the wildlife and to the endangered species of fauna in particular as the protection of wild animals and birds and their habitat assumed national importance.Many protected areas have been created after the enactment of Wildlife (Protection) Act of 1972. It is aimed that at least 5% of the total geographical area of India should be set aside as protected area for best results so far as wildlife conservation is concerned.
8 Water crisis
India is facing a looming water crisis that has implications not only for its 1.1 billion people, but for the entire globe. India’s demand for water is growing even as it stretches its supplies. Water infrastructure is crumbling, preventing the government from being able to supply drinking water to its citizens. Pollution is rampant due to unfettered economic growth, poor waste management laws and practices. India’s need for a comprehensive management program is so severe because of its rapidly depleting water supply, environmental problems, and growing population.
Environmental Problems of Agriculture
Among the environmental problems of agriculture, water-related problems occupy an important place. Environmental problems in agriculture have proven difficult to address due to the spatial heterogeneity and temporal variable alit intrinsic to agriculture. Agriculture's high degree of variability makes direct regulation inefficient. Subsidies for improving environmental performance can have negative consequences and have proven ineffective in practice, due largely to bureaucratic culture. Pollution taxes should be the most effective and efficient form of policy. Interdisciplinary research is needed to provide models for performance evaluation.
Forestry in India
India's forest cover to be about 68 million hectares, or about 20 percent of the country's area. In qualitative terms, however, the dense forest in almost all the major Indian states has been reduced. In February, the FSI, part of the government’s Ministry of Environment and Forests, released the India State of Forest Report 2011. This biennial survey used images from India’s remote-sensing satellite system and estimated that forest covered 692,027 square kilometers of the country — roughly 23% of India’s land area — a decline of just 367 km2 on the tally reported in 2009, and a much smaller loss than in Brazil.
9 Fishing
Fisheries are an important sector in India--it provides employment to millions of people and contributes to food security of the country. With a coastline of over 8,000 km, an Exclusive Economic Zone (EEZ) of over 2 million sq. km, and with extensive freshwater resources, fisheries play a vital role. Presently, fisheries and aquaculture contribute 1.07 per cent to the national GDP and 5.30 per cent to agriculture and allied activities, while the average annual value of output during the Tenth Five Year Plan (2002-2007) was Rs31, 682.50 cores.
Indian Minerals
India is rich with various types of minerals like Iron-Ore, Copper-Ore, Chromite and Zinc Concentrates, Gold, Manganese Ore, and Bauxite, Lead concentrates which account for the metallic production. India is the world`s largest producer of Mica blocks and Mica splitting. With the recent spurt in world demand for Chromite, India has stepped up its production to reach the third rank among the Chromite producers of the world. Besides, India ranks 3rd in production of coal & lignite and Barites, 4th in Iron Ore, 6th in Bauxite and Manganese ore, 10 in Aluminum and 11th in Crude Steel in the World.
Indian Mines
It was only after independence that the Indian mines and minerals sector experienced a phenomenal increase in growth rate. In total there are 84 minerals being produced in India including 4 fuels, 11 metallic, and 49 non-metallic industrial and 20 minor minerals.
1 0 Ecotourism in India India, the land of varied geography offers several tourist destinations that not just de- stress but also rejuvenate you. The India topography boasts an abundant source of flora & fauna. India The declaration of several wildlife areas and national parks has encouraged the growth of the wildlife resource, which reduced due to the wildlife hunt by several kings in the past. There are numerous Botanical and Zoological Gardens in India, which are working towards the enhancement of the Ecosystem. Environment Stats
FACTS STATS RANK
Areas Under Protection 497 21st of 146
Carbon Efficiency 1.39 CO2 emissions/$ GDP 57th of 141
CO2 Emissions 1007980 5th of 178 Deforestation; soil erosion; overgrazing; desertification; air pollution Current Issues from industrial effluents.
Ecological Footprint 1.06 109th of 141
Forest Area > % of land area 22.77% of land area 115th of 195
Known Mammal Species 390 8th of 145 193 Known Threatened Species 7th of 158
Pollution > Carbon Dioxide 1999 293,938 4th of 199 1,150 thousand metric tons/squad SO2 emissions per populated area 47th of 141
Threatened Species > Mammal 75 3rd of 160
Water > Availability 1.56 thousand cubic metres 93rd of 141 Water Pollution, Wood Industry > % of total BOD emissions 0.33 % 50th of 114
Wildness 1.94% 82nd of 141
(Source: http://www.go-green.ae/footprint)
1 1 2.4. ECOLOGICAL ENVIRONMENTEL COMPERISION
India Kenya
Adjusted savings: net forest 0.57 % of GNI Ranked 27th in 1.11 % of GNI depletion > % of GNI 2005. Ranked 17th in 2005. 95% more than India 497 Ranked 21st. 6 times more than Kenya 68 Ranked 63rd. Areas under protection 2 Ranked 28th. 1Ranked 52nd. 100% more than India Biodiversity richness 1.39 CO2 emissions/$ GDP 0.85 CO2 emissions/$ GDP Ranked 57th. 64% more than Ranked 91st. Carbon efficiency Kenya 1,007,980 10,191 Ranked 5th. 98 times more than Ranked 87th. CO2 Emissions Kenya 1.2 kt per 1,000 people Ranked 0.3 kt per 1,000 people CO2 emissions > kt (per capita) 120th in 2003. 3 times more than Ranked 162nd in 2003. Kenya 1.15 Ranked 102nd. 1.06 Ranked 109th. 8% more than India Ecological footprint 100% 65% Endangered species protection Ranked 18th. 54% more than Ranked 77th. Kenya 22.77 % of land area Ranked 115th 6.19 % of land area Forest area > % of land area in 2005. 3 times more than Kenya Ranked 164th in 2005.
390 Ranked 8th. 9% more than Kenya 359 Ranked 9th. Known mammal species
Pollution > Carbon dioxide 1999 293,938 Ranked 4th. 2,412 Ranked 92nd. 121 times more than Kenya 4.8 6.2 Ranked 82nd. Ranked 68th. 29% more than India Protected area 1,150 thousand metric tons/squ 160 thousand metric tons/squ SO2 emissions per populated area
193 107 Threatened species Ranked 7th. Ranked 16th. 80% more than Kenya Threatened species > Mammal 75 43 Ranked 3rd. Ranked 11th. 74% more than Kenya 1.56 thousand cubic metres 1.51 thousand cubic metres Water > Availability Ranked 93rd. 3% more than Kenya Ranked 95th.
Water > Freshwater pollution 0.97 tons/cubic km Ranked 32nd. 0.78 tons/cubic km 24% more than Kenya Ranked 35th.
Water pollution, wood industry > 0.33% 1.77% % of total BOD emissions Ranked 50th in 2002. Ranked 33rd in 2002. 4 times more than India 1.94% 39.01% Wildness Ranked 82nd. Ranked 30th. 19 times more than India
EXECUTIVE SUMMERY ON LEGAL SYSTEM OF KENYA:
Enrolment No. Name of the Students Faculty Guide 117340592096 SUDHIR MADHUSUDANBHAI LOLARIYA 117340592098 VINAY MAHESHBHAI JOGADIA
117340592102 HARDIK KANIYALAL JOSHI Prof. Chhavi Manra 117340592104 MUSHTANSHIR LAKSHMIDHAR 117340592105 NOORUDIN ABDULLAH BOHRA 117340592106 MANISH KISHORBHAI GOHEL
Executive Summary of Legal system
Kenya has a well-developed legal system, partially inherited from its colonial past, with English common law forming the basis, combining with traditional customary law and elements of Islamic law in the realm of marriage and succession. Kenya adopted a new Constitution on 27 August 2010 which sets the reform agenda for better governance and a path to democratic stability. Under Kenyan law, the business enterprises that can be established range from limited companies of various forms, branch office registration, and partnerships.
Kenya has a four tier courts system – Magistrates, High Court, Court of Appeal and Supreme Court. Judicial proceedings have been criticized as slow, inefficient and sometimes are tainted by corruption. The courts are overloaded with lack of capacity caused by failure to invest adequately in technology and training. It is important to note that there is currently an attempt to reform and transform the Judiciary to make it more efficient and increase transparency. Membership of COMESA and the EAC also provides recourse for appeals in treaty-specific areas.
The Indian Legal system is one of the oldest and longest written set of laws in the world. Our legal system has its roots in the legislature formulated during the British Raj era. The Indian legal system is formulated baring in mind the diversity of the country and with due respect to the religion, customs and traditions of the people.
Under Kenyan law, the business enterprises that can be established range from limited companies of various forms, branch office registration, and partnerships. Trusts are recognized under law. Land law is under the Land Registration Act, The Land Act and The National Land Commission Act.Despite these, Kenya experiences major problems of non- compliance with basic food safety and agricultural health practices in local markets. The level of awareness of the said practices among small producers is negligible.
Government has a tendency to place advertisements selectively in media that it perceives to be politically correct. In the run up to the 2007 elections, the Standard Group complained that government was crippling it by denying it advertisements.
The government being the biggest spender in the economy, its negative action has an indirect influence on advertisers who are reluctant to do business with media critical of it. The Advertising Practitioners Association of Kenya’s rules mainly target alcohol and cigarettes in the Kenyan media. Otherwise the code of ethics for advertising is largely ignored and few bother about it. The government prohibited alcohol and cigarettes advertising during prime time when children are still watching TV or listening to radio. The Tobacco Control Act, 2007, prohibits tobacco advertising, promotion and sponsorship. It prohibits the sale of cigarettes to minors.The comparison of legal aspects of Kenya and India for starting the business and its process how it has to be followed and how much time it takes to complete the procedures and the duties it’s to be paid. How the legal formalities are completed is been described and is compared with the India.
3.1 COMPARISON OF STARING BUSINESS PROCESS IN KENYA AND INDIA KENYA
No. Procedure Time to Associated Complete Costs 1 State registration of legal entity, statistical, and tax 3 days KES 100 per registration with the Center for Public Registration name reservation 2 Stamp the memorandum and articles and a 5 days 1% of statement of the nominal capital nominal capital + KES 2,020 for stamp duty on Memorandum and Articles of 3 Pay stamp duty at bank 1 day KES 100 for Association bank commission 4 Declaration of compliance (Form 208) is signed 1 day KES 200 before a Commissioner of Oaths /notary public 5 File deed and details with the Registrar of 7- 14 days KES 6,400 Companies at the Attorney General's Chambers in Nairobi
6 Register with the Tax Department for a PIN, VAT 1 day no charge and PAYE online 7 Apply for a business permit 5 days KES 10,000 8 Register with the National Social Security Fund 1 day no charge (NSSF) 9 Register with the National Hospital Insurance Fund 1 day no charge (NHIF) 10 Make a company seal after a certificate of 2 days between KES incorporation has been issued 2,500 and KES 3,500
INDIA:
Procedure Time to Associated Costs Complete 1 Obtain director identification number (DIN) 1 day INR 100 on-line 2 Obtain digital signature certificate on-line 1 day INR 400 to INR 2650 3 Reserve the company name with the 2 days INR 1000 Registrar of Companies (ROC) on-line 4 Pay stamp duties online, file all incorporation 3-7 days INR 22,300 forms and documents online and obtain the certificate of incorporation 5 Make a seal 1 day INR 350 6 Visit an authorized franchise or agent 7 days INR 94 for Fee and appointed by National Securities Depository INR 5 for Application Services Limited (NSDL) or Unit Trust of India Form, (if not (UTI) Investors Services Ltd to obtain a downloaded) 7 PermanentObtain a tax Account account Number number (PAN)for income 7 days, INR 60 taxes deducted at source from the simultaneously Assessing Office in the Mumbai Income Tax with Procedure 8 RegisterDepartment with Office of Inspector, Mumbai 26 days, INR 2,400 (registration Shops and Establishment Act simultaneous fee) + 3 times with procedure registration fee for Trade 7 Refuse Charges (INR 9 Register for VAT online 10 days, 7,200)INR 500 (Registration simultaneous Fee) + INR 25 (Stamp with procedure Duty) for compulsory 8 VAT registration
10 Register for profession tax 2 days, no charge simultaneous with procedure 11 Register with Employees' Provident Fund 129 days, no charge Organization simultaneous with procedure 12 Register for medical insurance (ESIC) 98 day, no charge simultaneous with procedure 10
3.2 PROCEDURE OF DEALING WITH CONSTRUCTION PERMITS IN KENYA & INDIA
KENYA
No. Procedure Time to Associated Complete Costs 1 Submit architectural plan for approval and obtain 30 days KES provisional building permit 54,484 2 Submit and obtain structural plan approval and final 10 days KES 8,936 building permit 3 Obtain a project report from an environmental expert 5 days KES 50,000 4 Obtain approval of the Environmental impact 30 days KES assessment study 16,250 5 Request and receive on-site inspection by the 5 days KES 1,000 municipal authority after construction 6 Obtain occupancy certificate 14 days KES 10,992 7 Apply for water and sewerage connection 1 day KES 1,100 8 Pay water and sewerage installation costs and 30 days KES 6,000 obtain connection 9 Apply and pay for telephone connection 5 days KES 3,39
India No. Procedure Time to Associated Complete Costs 1 Submit application and design plans at Building Proposal 1 day INR 36,417 office of BMC and pay scrutiny fee 2 Receive site inspection from Building Proposal Office 1 day no charge 3 Obtain Intimation of Disapproval from the Building 29 days INR 1,301 Proposal Office and pay fees 4 Submit structural plans approved by a structural 1 day no charge engineer to BMC 5 Apply for NOC from Tree Authority 1 day no charge 6 Receive inspection from Tree Authority 1 day no charge 7 Obtain NOC from Tree Authority 30 days INR 4,500 8 Request and obtain NOC from Storm Water and Drain 7 days no charge Department 9 Request and obtain NOC from Sewerage Department 7 days INR 77,306
10 Request and obtain NOC from Electric Department 7 days no charge 11 Request and obtain NOC from Environmental 7 days no charge Department 12 Request and obtain NOC from Traffic & Coordination 7 days no charge Department 13 Request and obtain NOC from CFO 7 days INR 13,006 14 Obtain Commencement Certificate from Building 10 days INR 836,100 Proposal Office and pay Development Charges 15 Request and receive inspection of plinth 1 day no charge 16 Submit letter stating completion of building works to 1 day no charge obtain an Occupancy Certificate and Certificate of Completion 17 Request and obtain completion NOC from Tree Authority 3 days no charge 18 Request and obtain completion NOC from Storm Water 3 days no charge and Drain Department 19 Request and obtain completion NOC from Sewerage 3 days no charge Department 20 Request and obtain completion NOC from Electric 3 days no charge Department 21 Request and obtain completion NOC from Environmental 3 days no charge Department 22 Request and obtain completion NOC from Traffic & 3 days no charge Coordination Department 23 Request and obtain completion NOC from CFO 3 days INR 70,000 24 Request and receive competition inspection from BMC 1 day no charge 25 Obtain Occupancy Certificate 1 day no charge 26 Obtain Completion Certificate 30 days no charge 27 Apply for permanent water connection 1 day no charge 28 Receive on-site inspection for connection to water by the 1 day no charge Water Supply Department 29 Obtain permanent water connection 45 days INR 1,210 30 Apply for permanent sewerage connection 1 day no charge 31 Receive on-site inspection for connection to sewerage by 1 day no charge Sewerage Department 32 Obtain permanent sewerage connection 30 days INR 50,000 33 Apply for telephone connection 1 day INR 500 34 Receive on-site inspection and connection to telephone 2 days no charge by the utility provider
3.3 PROCEDURE OF GETTING ELECTRICITY IN KENYA & INDIA
KENYA
No. Procedure Time to Associated Complete Costs 1 Submit application to Kenya Power and Lighting 28 calendar no charge Company Ltd (KPLC) and await site inspection days 2 Receive site visit from KPLC and await estimate 14 calendar no charge days 3 Customer pays estimate and signs supply contract 1 calendar KES day 860,000.0 4 Customer calls utility and collects meter and meter 13 calendar no charge number days 5 Customer obtains excavation permit from City Council 5 calendar KES and submits to utility days 7,500.0 6 KPLC conducts external connection works, meter 90 calendar no charg installation and electricity starts flowing days
INDIA
No. Procedure Time to Associate Complete d Costs 1 Submit application to Brihan Mumbai Electricity Supply 7 calendar INR 50.0 and Transport Undertaking (BEST) and await site inspection days
2 Receive external site inspection from BEST and await 8 calendar no charge Estimate days 3 Submit electrical contractor's wiring and test report and 1 calendar INR estimated amount to BEST day 45,000.0 4 Electrical contractor conducts external connection works 7 calendar INR days 8,000.0 5 BEST inspects wiring and installs meter 7 calendar no charge days 6 BEST inspects and tests installation 7 calendar no charge days 7 Submit meter security deposit, receive external 30 calendar INR connection and electricity starts flowing days 123,444.3
3.4 PROCEDURE OF REGISTERING PROPERTY IN KENYA & INDIA KENYA No. Procedure Time to Associated Complete Costs 1 Apply for a search on the title at the Lands 3 days KES 500 Office (simultaneous with Procedure 2) 2 Apply and Obtain Land Rent Clearance 19 days no cost Certificate from the Commissioner of Lands (simultaneous with Procedure 1) 3 Apply, pay and obtain Rates Clearance 5 days KES 7,500 Certificate from the Nairobi City Council (simultaneous with Procedure 1
4 Apply and obtain consent to transfer from the 9& days2 ) KES 1,000 Commissioner of Lands 5 File the transfer instrument at the Lands Office 5 days no cost and obtain appointment for valuation 6 Receive site inspection by Government valuer 21 days no cost and obtain valuation report 7 Endorsement of value for stamp duty purposes 4 days no cost and assessment of Stamp duty 8 Payment of Stamp Duty at Commercial Bank 4 days KES 600 and receive confirmation of payment from (charge for Kenya Revenue Authority Banker’s check) + 4% of property value (stamp Duty) 9 Lodge stamped transfer document for 12days KES 500 registration and receive duly registered documents
INDIA
No. Procedure Time to Associated Costs Complete 1 Check for encumbrances at the office of 5 days Rs. 10,000 Sub-Registrar of Assurance 2 Preparation of the final sale deed by the 7 days INR 22,000 to INR 25,000 purchaser’s lawyer 3 Payment of Stamp Duty on the final Sale 1 day 5% of property value Deed through franking at the designated bank.
4 Execute final sale deed and submit 1 day 1% of market value of the documents to the local office of the Sub- property (Maximum INR Registrar of Assurances 30,000) + INR 20 per page of final sale deed for scanning charges (paid in cash) 5 Apply to the Land & Survey Office for 30 days INR 450 (Application fee of mutation of the tile of the property INR 100; stamp duty on the Indemnity Bond of INR 200, stamp duty of INR 100 on the Affidavit in the prescribed form and notary fees of INR
3.5 TAX OR MANDATORY CONTRIBUTION OF KENYA & INDIA
Tax or mandatory Pay Notes Time Statutory tax Tax base Total Not contribution ment s on Paym (hours) Rate tax rate es (num ents (% on ber) profit) TTR
Corporate income tax 5 45 30% taxable profit 28.1 Employer paid - 12 52 3% gross 5.3 Social security salaries contributions (NSSF) Single business 1 KES fixed fee 4.2 permit - manufacturer 100,000 Standards levy 2 0% net sales 3.5 Employer paid - 2 KES 600 number of 1.5 Training or apprentice tax per employee employees
Advance motor 1 KES 1,500 vehicle 1 incl vehicle tax per ton weight ude d Single business 1 KES 20,000 fixed fee 0.8 in permit - trader Tax on interest 0 15% interest 0.4 inclothe income uder dtaxe Fuel tax - excise duty 1 KES 10.31 fuel 0.3 ins per liter consumption Land rates 1 1% land value 0.3 othe Road maintenance 0 paid KES 9 per fuel 0.3 r levy jointly Liter consumption taxe Petroleum 0 paid KES 0.4 per fuel 0 s development duty jointly Liter consumption Value added tax 12 243 16% value added 0 not (VAT) incl Stamp duty on 1 various type of 0 sma ude contracts rates contract ll d Tax on check 1 KES 2 per number of 0 amo transactions check checks unt Land rent 1 various rates 0
Totals: 41 340 44.4
INDIA
Tax or Payments Notes on Time Statutory Tax base Total Notes mandatory (number) Payments (hours) tax rate tax rate on TTR contribution (% profit)
Corporate 1 online 45 30% taxable 20.8 income tax filing profit Central Sales 1 online 105 2% purchase 14.1 Tax filing price Social security 12 93 12% gross 13.5 contributions salaries Employee's 12 5% gross 4.6 state insurance salaries contribution
Dividend tax 1 17% dividend 3.8 distributions Property tax 1 10% assessed 3.3 value Fuel tax 1 INR 3.75 fuel 1.3 per liter consumption (CENVAT) from 1.1.2011 to 28.2.2011 and INR 4.41 from 1.3.2011 to 31.12.2011 + INR 2 per Tax on 1 liter10% + insurance 0.2 insurance 24% VAT premium contracts Tax on interest 0 withheld 10% interest 0 include income d in other
taxes
Income 0 paid 8% on all 0 include surcharge jointly federal taxes d in other Education 0 paid 2% all federal 0 include taxes cess jointly taxes including d the surcharge in other taxes Secondary & 0 paid 1% all federal 0 include Higher education jointly taxes including d cess the surcharge in other taxes Vehicle tax 1 INR 200 fixed fee per 0 (pollution tax) vehicle State VAT 1 online 13% value added 0 not filing include CENVAT 1 online 10% value added 0 include d (Excise Duty) filing d in other Totals: 33 243 61.8 taxes
3.6 EXPORT AND IMPORT PROCEDURES IN KENYA & INDIA
KENYA INDIA
Nature of Export Duration US$ Cost Nature of Export Duration US$ Cost Procedures (days) Procedures (days) Documents 12 305 Documents 8 415 preparation preparation Customs 4 375 Customs 2 130 clearance and clearance and technical control technical control Ports and terminal 3 225 Ports and 6 375 handling terminal handling Inland 4 1,200 Inland 3 350 transportation and transportation and handling handling Totals 16 1,120 Totals 26 2,255
Export documents Export documents Bill of lading Bill of Lading Cargo delivery order Certificate of Origin
Certificate of origin Commercial invoice Commercial Invoice Foreign exchange control form Customs export declaration Inspection report Inspection report Packing list
Packing List Shipping Bill (customs export Terminal Handling receipts declaration) Technical standard certificate Terminal handling receipts
Nature of Import Duration US$ Nature of Import Duration US$ Procedures (days) Cost Procedures (days) Cost Documents preparation 11 250 Documents preparation 8 400 Customs clearance and 3 510 Customs clearance and 4 200 technical control technical control Ports and terminal 8 390 Ports and terminal 5 250 handling handling Inland transportation 4 1,200 Inland transportation 3 350 and handling and handling Totals 26 2,350 Totals 20 1,200
Import documents Import documents Bill of Entry (customs import declaration) Bill of lading Certificate of Conformity Bill of lading
Certificate of origin Cargo release order Commercial invoice Certificate of origin Customs import declaration Certified engineer's report (technical standard ImportPacking documents list certificate) Terminal handling receipts Commercial invoice Foreign exchange control form Inspection report
Packing list Product manual Terminal handling receipts
1 EXECUTIVE SUMMERY ON FININCIAL MARKET OVERVIEW:
Enrolment No. Name of the Students Faculty Guide 117340592065 TARUN GOKUL RATHOR 117340592068 NIKUNJ KISHORBHAI BHALODI
117340592069 RAVINDRA PRAFULBHAI AGOLA Prof. Bhoomi Parekh 117340592071 POOJA ASHOKBHAI DOMADIYA 117340592075 DHARA JYOTINDRAKUMAR MALAVIYA 117340592076 JAY VITTHALBHAI SANGANI
2 FININCIAL MARKET OVERVIEW:
FINANCE MINISTRY
The Ministry of Finance derives its mandate from the Constitution of Kenya, Cap VII Sections 99-103 which provides for proper budgetary and expenditure management of government financial resources. In addition, Parliament, over the years has passed 49 Acts to which the Ministry of Finance is a custodian thereby adding more responsibilities to the Ministry.
The functions of the Ministry of Finance are strategic in several ways. As a main function, the Ministry is charged with the responsibility of formulating financial and economic policies. It is also responsible for developing and maintaining sound fiscal and monetary policies that facilitate socio - economic development. This responsibility makes the Ministry strategic and central to the country's economic management, as all sectors of the economy look upon the Ministry to create an enabling environment in which they can operate effectively and efficiently. The Ministry regulates the financial sector which is central to the development of the country and on which all other sectors depend for investment resources Another strategic responsibility of the Ministry is the management of revenues, expenditures and borrowing by the government. The Ministry must ensure that it mobilises adequate resources to support government programmes and activities. Consequently, the Ministry has the task of developing sound fiscal policies that ensure sustainable budget deficits. In addition the Ministry must ensure that government expenditure is within the revenue collected to reduce domestic borrowing, which tends to cause negative ripples in economic management.
The Ministry is also strategic as far as bilateral and multilateral development financing and technical assistance is concerned. Given the need for support from development partners to enhance the country's economic recovery and poverty reduction efforts, the performance of the Ministry in effectively coordinating this support cannot be underscored. The Ministry must therefore, provide direction in the identification, planning and management of donor support to ensure that it is targeted to those areas of the economy that need it most.
3 ECONOMIC TRANSFORMATION
The Ministry coordinates government ministries/departments in the preparation of the annual national budget. It is the responsibility of the Ministry to initiate and guide all ministries/departments to prepare their ministerial budgets. The Ministry also provides Accounting, Auditing, IT, Insurance, Pensions, Procurement, Clearing and Forwarding services, and Divestiture services among others to other government ministries/departments.
The Ministry has established an elaborate network through its established departments, and sector institutions, to effectively deliver on its mandate.
1 | Organization of the Market and Competition
2 | Currency and Price Stability
3 | Private Property
4 | Welfare Regime
Political Transformation
5 | Stateness
6 | Political Participation
7 | Rule of Law
8 | Stability of Democratic Institutions
9 | Political and Social Integration
4 FUNCTIONS OF KENYA FINANCE MINISTRY
olicy matters related to Supply Chain Management Personnel.
and Development of the Scheme of Service for Supply Chain Management Personnel.
Responsible for policy development and interpretation on Supply Chain Management laws and regulations.
Issue administrative guidelines on the interpretation and implementation of the Supply Chain Management laws and other statutes as they relate to the Government.
es in the field of Supply Chain Management in public sector.
-government strategies.
Represent the Permanent Secretary/Treasury in Board meetings in organizations dealing in procurement matters e.g. Kenya National Bureau of Standards Committee (KEBS), Kenya Medical Supply Agency (KEMSA) and Public Procurement Oversight Authority (PPOA) among others. ainst Ministries at the Public Review and Advisory Board and facilitate implementation of the decisions thereof in consultation with PPOA
5 DEPARTMENTS OF KENYA FINANCE MINISRTY
1.Budgetary Supplies:
2. Accountant General:
3.Economic Affairs:
4. Debt ManagementDepartment:
5. Administration:
6. Government Clearing Agency:
COMPARISONS BETWEEN INDIAN FINANCE MINISTRY AND KENYA FINANCE MINISTRY
PARTICULARS INDIA KENYA Finance minister ShriPalaniappan Hon. Dr.OburuOdinga,
Department EconomicChidambaram affairs EconomicM.P. Affairs
revenue expenditure financial Administration Government services disinvestment Clearing Agency Accountant General Functions Industrial finance Financial and Economic
Banking and insurance Policies
Banking operation Bilateral and Multilateral Development Financing Technical Assistance website finmin.nic.in/ Publicwww.treasury.go.ke Debt anagement
6 OVERVIEW OF KENYA BANKING INDUSTRY CENTRAL BANK OF KENYA The Central Bank of Kenya was established in 1966 through an Act of Parliament – the Central Bank of Kenya Act of 1966. The establishment of the Bank was a direct result of the desire among the three East African states to have independent monetary and financial policies. This led to the collapse of the East Africa Currency Board (EACB) in mid 1960s. Structure of the Bank Under the Central Bank of Kenya Act, the responsibility for determining the policy of the Bank, other than the formulation of monetary policy, is given to the Board of Directors. The Monetary Policy Committee of the Bank is responsible for formulating monetary policy.
The Board of Directors of the Bank consists of eight members:-
airman
-voting member
- executive directors
All members are appointed by the President to hold office for a term of four years and are eligible for reappointment once, provided that a Board member shall hold office for not more than two terms. The executive management team comprises the Governor, the Deputy Governor and fifteen heads of department who report to the Governor. The Bank operates from its head office in Nairobi and has branch offices in Mombasa, Kisumu and Eldoret. The Bank also owns the Kenya School of Monetary Studies (KSMS) which is headed by an executive director answerable to the Governor.
7
FUNCTIONS OF THE CENTRAL BANK OF KENYA
1. It acts as a banker’s bank.
2. It serves as a lender of last resort to commercial banks and also to the government.
3. It encourages the adoption of the financial system according to the changing needs of the markets. 4. It administers external reserves, exchange controls and handles external financial relations.
5 It manages the national reputation. It takes into account accumulated borrowings undertaken by the government to finance its expenditure. 6. It has the sole responsibility of issuing currency. It regulates the issue of notes and coins.
7 The bank is a government banker. It does not maintain the accounts of businesses and individuals in the private sector. It only maintains the accounts of governmental departments. This usually starts in a bank returns as public deposit. 8 Important of all is that it acts as an agent to the government. This is seen when it implements the monetary policy in the pursuit of the government's national economic development. As part of this process, the bank acts as a medium for a two-way transmission between the government and the financial markets. Among other things, it collects extensive statistical information on all financial institutions. The information is usually about the following:
s?
8
9.The Central Bank of Kenya has a duty to supervise the banking industry in general. The bank can issue directives to commercial banks and other financial institutions indicating how much they should be lending (quantitative directives). This has been done through what is known as moral persuasion (friendly persuasion). The bank is mandated to inspect and supervise the directives given to non-bank financial institutions and commercial bank
9 COMPARISON BETWEEN INDIA AND KENYA RATES
RBI is governed by a central board (headed by a governor) appointed by the central government of India. RBI has 22 regional offices across India. The reserve bank of India was nationalized in the year 1949. The general superintendence and direction of the bank is entrusted to central board of directors of 20 members, the Governor and four deputy Governors, one Governmental official from the ministry of Finance, ten nominated directors by the government to give representation to important elements in the economic life of the country, and the four nominated director by the Central Government to represent the four local boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi.
COUNTRY INDIA KENYA
Indicator Current Rate Current Rate
Inflation 7.24% 3.2%
Bank Rate 9% 11%
CRR 4.25% 18%
SLR 23% 20%
Repo Rate 8% 6.5%
Reverse Repo Rate 7% 0%
Deposit Rate 8.50%–9.00% 6.69%
Base Rate 5.24%
Reserve Bank Rate 11% 9.75%–10.50%
4%
(Sources: Reserve Bank Of India , Central Bank Of Kenya) (Till December 2012)(TABLE -4
1 0 OVERVIEW OF STOCK MARKET IN KENYA Nairobi Stock Exchange: The Nairobi Securities Exchange (NSE) in Kenya is small and somewhat speculative. The Exchange was established in 1954.The Exchange is sub-Saharan Africa's fourth-largest bourse. A number of brokers are licensed to operate. Demutualization of the NSE was approved by 20 brokers who control it and will lead to the government taking up 20% ownership through Treasury (10%) and Investor Compensation Fund (10%). The brokers will equally share the remaining 80% in readiness for an IPO that should result in each broker ceding at least half of their stake. As a result, the bourse is expected to gain value over time and before the IPO. This will also see its name change to Nairobi Securities Exchange Limited with an authorized share capital of Ksh1 billion. The Equity Market Capitalization increased from Ksh837 billion in January 2010 to Ksh1.02 trillion in March 2010. 47 of the 52 equity counters at the NSE recorded share gains in the first quarter of 2010. This improvement was attributed to robust earnings posted by majority of the companies, increased business confidence, return of local investors to the market and active foreign investor participation that added to liquidity.
Founded 1954 by incorporation
Headquarters Nairobi, Kenya
Chief Executive : Peter Mwangi, Key People NSEChairman:-20 Share James Index Wangunyu. and NSE All Share Index (NASI). Trades Kenya's listed Products Web site equities,www.nse.co.ke
(TABLE -5) Trading takes placepreference on Mondays shares, through corporate Fridays and betweengovernment 9.00 bonds. am and 3.00 p.m. The 20 member brokerages commissions have dropped from a fixed 2.5% to a sliding scale between 1.1% and 2%.
1 1
The Nairobi Stock Exchange marked the first day of automated trading in government bonds through the Automated Trading System (ATS) in November 2009. The automated trading in government bonds marked a significant step in the efforts by the NSE and CBK towards creating depth in the capital markets by providing the necessary liquidity.
In December 2009, NSE marked a milestone by uploading all government bonds on the ATS. Also in 2009, NSE launched the Complaints Handling Unit (CHU) SMS System to make it easier for investors and the general public to forward any queries or complaints to NSE.
In the same year, the equity settlement cycle moved from the previous T+4 settlement cycles to the T+3 settlement cycle. This allowed investors who sell their shares, to get their money three (3) days after the sale of their shares. The buyers of these shares will have their CDS accounts credited with the shares, in the same time.
OPPORTUNITIES IN STOCK MARKET IN KENYA Openness to Foreign Investment
Conversion and Transfer Policies
Expropriation and Compensation
Performance Requirements and Incentives
Protection of Property Rights
Transparency of Regulatory System
Efficient Capital Markets and Portfolio Investment
Competition from State Owned Enterprises
Bilateral Investment Agreements
Foreign-Trade Zones/Free Ports
Foreign Direct Investment Statistics COMPARISON BETWEEN INDIA AND KENYA STOCK MARKET
PARTICULAR INDIA KENYA
Bombay Stock Exchange, Main Stock Exchanges Nairobi Stock Exchange Capital City NewNational Delhi Stock Exchange Nairobi Bank account, Bank account &
Account required for Trading account & De-mat account Central Depository System
ShareStock Market Liquidation time (CDS) account duration T+2 in April, 2003 T+3 in July, 2011 Currency Rupee Shilling In November 2011 the (FTSE NSE NIFTY (National Stock Exchange Fifty), an index of fifty NSE Kenya 15), an index of major stocks weighted by market fifteen major stocks weighted 10capitalization. by market 10capitalization., and (FTSE NSE Kenya 25),an BSE SENSEX (Bombay Stock index of twenty five major Exchange Sensitive Index), an stocks weighted by market Index index of thirty major stock weighted 10capitalization were Average exchange rate by market capitalization. launched. per US $. ( As per World Development Indicators database) 45.31 72.1 Mondays through Fridays, Mondays through Fridays between Time For trading Market time 9.00 a.m. - 3.30 9.00 am - 3.30 p.m. p.m. Time Zone: Indian Standard Time (GMT+5:30) East Africa Time (GMT+3) Security Exchange Board of India Capital markets Authority Controller Reserve(SEBI) Bank of India (RBI) (CMA) Central Banks Central Bank of Kenya (CBK)
EXECUTIVE SUMMARY ON MAJOR INDUSTRIES OF KENYA:
Enrolment No. Name of the Students Faculty Guide 117340592078 YOGENDRASINH ASHOKSINH JADEJA 117340592081 JATIN RAJESHBHAI VYAS
117340592084 JAYDEEP ASHVINKUMAR PAREKH Prof. Priyanka Mehta 117340592088 KRUPALI NALINKANT DAVADA 117340592089 PRADIP PRAVINBHAI BORICHA 117340592091 SHRENIK TARUNKUMAR MEHTA
OVERVIEW OF MAJOR INDUSTRIES OF KENYA
Agriculture Agriculture accounted for approximately 25 percent of Kenya's GDP in 2005/2006. Horticulture, which essentially comprises cut flowers and fresh vegetables, almost entirely for export, has been growing very steadily over the years. In the past five years, horticulture has grown considerably; bringing in much needed foreign exchange to Kenya and ranks among the country's most sophisticated and best developed industries. Tea is another strong export earner in the Kenyan economy along with coffee.
1. TEA: Situated astride the Equator and bordering Tanzania, Uganda, Sudan, Ethiopia, Somalia and the Indian Ocean, Kenya is a country with fascinating features ranging from the snow capped Mt. Kenya, the Great Rift Valley with some geothermal activities, the vast plains teeming with wildlife, to the sunny and sandy beaches along the coastline. Kenya’s capital city, Nairobi, is situated at the heart of the country and serves as the business and communication hub for East and Central Africa, while the historic city of Mombasa accommodates the natural harbour, Kilindini which is the regional gateway. Apart from Manufacturing, which accounts for approximately a tenth of Kenya's these attractions, Kenya is famous world over for the production of high quality tea. The tea industry operates under the auspices of the Ministry of Agriculture for technical and policy guidance. The industry is well structured right from the apex regulatory body, the Tea Board of Kenya, the Tea Research Foundation of Kenya, through to the producers, tea manufacturing factories, the trade and the blending and packing establishments. GDP, has been experiencing strong growth in the past five years. The sector's positive results during the past two fiscal years were driven by growth in the production of cement (7.8 percent), processed milk (24.3 percent), cigarettes (19.9 percent) and beer (8.5 percent).
1. FLOWERS: Kenya's horticultural sector currently ranks as one of the economy’s fastest growing industries, the third largest foreign exchange earner after tourism and tea. This has been reflected in virtually year on year expansion in fruit, vegetable and flower exports, a trend that saw the industry rise 31% in 2003 with total exports reaching 130 000 tonnes in 2003. Top on the list of fresh horticultural crops exported annually are cut flowers, French beans, runner beans, snow peas, Asian vegetables, pineapples, mangoes, tomatoes, paw paws and passion fruit. The history of the export of fresh horticultural produce from Kenya dates back to the period before independence when Kenya, then a British colony, was required to contribute to the running of the budget for East Africa. After independence the industry continued to flourish with exports starting to go to Europe and thus opening up the potential for Kenya in the export market. Overall exports to the European market started to increase in the 1970's with the Netherlands being the largest importer, taking a 71 per cent share by volume, with most distributed through the auction system. Next came the United Kingdom on 20 per cent, followed by Germany on 6 per cent. Success can be attributed to Kenya's ability to provide high quality products on a year-round basis, backed by daily airfreight arrivals to key destinations.
3. COFFEE
The Coffee Board of Kenya is the apex body for the coffee industry, established in 1934 after the enactment of the coffee industry ordinance in 1933. The Board was charged with the responsibility to carry out regulation and marketing of coffee. The auctions as a mode of selling Kenya coffee was established in 1934 and created in 1935 to enhance quality assessment through the grading. This role has changed over time through various amendments to the law. In 2001, the coffee Act cap 333 was repeated and the coffee Act No. 9 of 2001 enacted, establishing the Board as a statutory body under the Ministry of Agriculture, solely to regulate the coffee industry.
Tourism Tourism has been resurgent in recent years, contributing approximately 12 percent to Kenya's total GDP. Tourism grew by an excellent 17.4 percent in fiscal 2005/2006 and brought in approximately $608 million cumulative revenue in the same period, according to the Kenyan government. Strong growth is attributed not just to continued demand for safaris and beach holidays from traditional European markets such as Italy, Germany, and the UK, but also from the results of the successful marketing of Kenya in new markets such as China, India and Japan.
Manufacturing Manufacturing, which accounts for approximately a tenth of Kenya's GDP, has been experiencing strong growth in the past five years. The sector's positive results during the past two fiscal years were driven by growth in the production of cement (7.8 percent), processed milk (24.3 percent), cigarettes (19.9 percent) and beer (8.5 percent).
Transport and communications
Transport and communications are worth approximately 11 percent of GDP. Transport enjoyed only moderate growth in 2005/2006, but the telecommunications sub-sector continues to grow strongly - total mobile phone subscribers jumped by 41 percent between June 2005 and June 2006 to 6.5 million. Fixed line connections rose by 8 percent in the same period Other sectors of the Kenyan economy in order of importance to GDP are wholesale and retail trade (approximately 11 percent, construction (4 percent) and financial services (3 percent).
Budget Statement and Economic Policy for Fiscal Year 2012/2013
INTRODUCTION 1. Mr. Speaker, it is my privilege and honour to present to this August House my first Budget Statement since becoming the Minister for Finance. May I, at the onset, take this early opportunity to thank His Excellency the President for the trust he has bestowed on me to spearhead the management of economic policy of our beloved country. I am equally indebted to the Rt. Hon Prime Minister, the Vice President, Speaker, Cabinet colleagues and Hon Members of Parliament for their wise guidance and continued support to the Treasury.
2. Mr. Speaker, this FY2012/13 Budget is the last one that will be presented to this House during the tenure of Hon Mwai Kibaki as the President of the Republic of Kenya. It is, therefore, instructive to reflect very briefly on the achievements that the Government has made in delivering its priorities since 2003 when he assumed the leadership of this Nation. As outlined during His Excellency’s State of Nation Address on 24tth April 2012, President Kibaki’s Administration over the 2003 – 2007 period and subsequently the Grand Coalition Government has implemented several bold economic policies and structural reforms that have significantly improved the welfare of Kenyans.
3. Let me highlight some of the key notable achievements. These include, among others: i.Economic recovery with real GDP growth rising from as low of 0.8 percent in 2002 to 7 percent in 2007. The domestic and external shocks of 2008 and 2009 adversely affected growth, but following return of peace in the country, our economy rebounded in 2010 and remained resilient in 2011 despite the challenges we went through. We now project a growth of 5.2 percent in 2012; ii. Increased the number of children going to school under the free primary education programme from 5.9 million in 2003 to 10 million;
iii. Provided tuition fee for 2 million more in secondary schools and increased by threefold the number of students in university; iv. Increased the number of people accessing ARV drugs to 350,000, up from just 10,000 in 2003; and distributed close to 20 million mosquito nets forestalling a malaria endemic;
v. Tarmacked over 2,700 kilometres of roads, rehabilitated over 4,000 kilometres of road and connected to the electric grid 1.7 million Kenyans, up from 700,000 in 2002; vi. Disbursed over Ksh.100 billion under CDF, which financed construction of over 1,000 health centres,, 10,000 classrooms, numerous roads, security posts as well as water and fish projects throughout the country;
4. Mr. Speaker, with the foundation firmly llaid, supported by a new constitutional dispensation providing for a devolved system of government, the President has given us the challenge to sustain the Vision of our country of attaining a higher income status by 2030. Going forward, we should strive to build on this legacy to transform and modernize our Nation, create jobs for our people and significantly reduce poverty. In this context, I have, therefore, chosen the theme of this year’s budget as “Deepening our Economic and Social Prosperity within a System of Devolved Government”.
5. Mr. Speaker, we have, without any doubt, achieved much progress but the journey has just begun, and there are challenges that lie ahead, which we must work together to deal with, both at domestic and global levels. We continue to face exogenous shocks associated with climate change and volatility in international oil and other commodity prices and worse still the global economic outlook, in the medium term, is expected to remain fragile. But, Mr. Speaker, we must rise to the challenge and courageously confront them - and we must confront them with bold and pragmatic policies. 6. Mr. Speaker, through this budget we are responding to these challenges by implementing a number of economic policies and structural reform measures. First, we are strengthening our financial systems by implementing further legislative and institutional reforms to keep the global crisis and uncertainty at bay. Second, we are scaling up infrastructure investments as the building blocks needed to
achieve a more lasting and stable growth; and third, we are making growth and development more inclusive and equitable across counties by investing in our people. We are also renewing our commitment to progressively deliver on the constitutionally mandated economic and social rights, including implementing measures to ensure food security and protection of the vulnerable members of our society.
7. Mr. Speaker, we acknowledge that accelerating and sustain inclusive and equitable growth for prosperity requires tough choices, hard work, and determination by all Kenyans. It goes beyond not just identifying hurdles to progress and proposing solutions, but also rolling up our sleeves and working together across the political divide to make painful decisions and implement sensible economic reforms. As Kenyans, we all shoulder the responsibility to build a better and prosperous Kenya in order to achieve a common future we all desire. 8. Mr. Speaker, through this budget we recognize that for us to engage the youth in gainful employment and put a meaningful dent on poverty we have to grow our economy uninterruptedly for many years and it has to be inclusive growth. To do this, we have to continue investing in infrastructure; provide quality education and healthcare, deepen reforms in the public service to enhance efficiency and effectiveness; improve competitiveness by removing regulatory burdens on small businesses; and deepen regional integration. 9. So, Mr. Speaker, this year’s Budget takes into account the principles of public finance as specified in the Constitution. The proposed budget is intended to continue stabilizing the economy and sustaining the growth momentum, going forward. Accordingly, it will be necessary to: i. accelerate growth even in the face of difficult domestic and global environment; ii. invest in infrastructure, especially in roads, energy, railways, and ports; iii. improve law and order to ensure security for our people and uphold property rights;
iv. reform the public service to make iit efficient and effective in service delivery and facilitate private sector growth; v. provide adequate resources for priority social programmes in education and health; vi. promotte equitable rural development and invest in agriculture to assure food security; vii. provide adequate resources for implementation of the Constitution; and, viii. set aside adequate resources for the General Elections.
10. Mr. Speaker, to achieve all these objectives and still stay within a sound fiscal framework is not easy, but we must confront our challenges boldly and within our means. We have to do more with the limited resources at our disposal, and, therefore, we have to work smarter and harder, as well as capitalise on our resilience and opportunities to move our country forward to prosperity.
II: RECENT ECONOMIC DEVELOPMENTS
Global Environment 11. Mr. Speaker, due to continued global challenges, the world economy is now projected to grow by 3.5 percent and 4.1 percent in 2012 and 2013, respectively. The advanced economies are projected to grow at a sluggish pace, averaging 1.7 percent over the same period, while the developing countries of Asia and sub- Saharan Africa are expected to continue with a robust growth, averaging 7.6 percent and 5.4 percent, respectively. The sovereign debt crisis in the Euro area and sluggish recovery in the US and other advanced economies pose significant risks to the global economic outlook.
Domestic Economy 12. Mr. Speaker, as Hon Members may recall that 2008 was a difficult year but after implementing appropriate and bold policies, we emerged strong with the real GDP expanding from the low of 1.6 percent to 5.8 percent in 2010. This broad-based
growth momentum was, however, slowed down to 4.4 percent by challenges related to high commodity prices in 2011. 13. Mr. Speaker, addressing the inflationary pressures and containing the depreciation of the shilling exchange rate has been a challenge this year. However, following a tightening of both monetary and fiscal policies and the easing of food and international oil prices, these pressures have eased significantly. We, therefore, expect inflation to continue to decline, which should support lower interest rates and measures will be put in place to ensure the stability of the shilling, going forward 14. Looking ahead, Mr. Speaker, the economic prospects for 2012 are favourable, but risks remain. Real GDP is expected to grow by 5.2 percent in 2012. Over the medium term, growth is expected to pick up to about 6.0 percent, bolstered by continued expansion in agriculture, tourism, construction, transport and communication, and ICT. While exports will continue to benefit from the relatively strong growth in the sub region and emerging economies of India, Brazil, China and Eastern Europe, new measures will be introduced to diversify and promote Kenya’s exports globally, especially export of services.
15. Mr. Speaker, whereas the projected growth is still below the target envisioned in Vision 2030 and below the rate needed to significantly reduce poverty and draw more youth to employment, we recognize that further up-scaling would require mobilizing larger amounts of resources, raising factor productivity, and moving to a higher value-added and more efficient production structure to increase export growth.
16. Mr. Speaker, given the limited public resources at our disposal, we will rely on the private sector to meet the economy’s resource requirements while we provide the appropriate market environment to promote efficiency. To achieve this, the Government will sustainmacroeconomic stability, undertake further structural reforms to improve efficiency in public service, enhance private sector access to credit through further reforms of the financial sector, and increase private sector participation in infrastructure development under a robust private-public-partnership (PPP) agenda. Deviation from 2012 BPS—Revision to Ceilings, Savings and Reprioritization
17. Hon. Members will recall that when we submitted the 2012 Budget Policy Statement in April this year, we had indicated that the baseline ceilings therein had not taken into account the additional spending proposals that were under consideration. The 2012/13 Budget Estimates now include about Ksh.50 billion as additional to the ceilings initially allocated to the ministries. These additional expenditures relate to: Implementation of the new Constitution covering proposals not accommodated within the baseline ceilings;
Strategic intervention in the area of:
• education and health, especially recruitment of teachers and nurses;
• Infrastructure covering urban commuter railway upgrade and rural/feeder roads;
• Securitty, particularly recruitment of additional security personnel; and
• Agricullture, especially irrigation programmes and other food security programmes.
• Specific consideration to job creation for the youth based on sound initiatives
• identified within and outside the normal budget preparation; and
• Interventions identified during the county stakeholders consultation for 2012 MTEF budget.
18. Mr. Speaker, to accommodate these additional expenditures, we rationalized ministerial proposals to realize savings, including using Ksh.15.1 billion that had been set aside for the contribution to civil service pension scheme, which is now expected to be effective beginning July 2013. In addition, we expect additional resources from African Mission in Somalia (AMISOM) to accommodate increased expenditure of the Defence budget. And finally additional room arose with the firming up of the resource envelope.
19. Mr. Speaker, with these adjustments and the Parliament’s recommendations on the Budget Policy Statement, we prepared Estimates of Expenditures which we submitted to this House on 26tth April, 2012 in accordance with the Constitution. Mr. speaker, I wish to thank Hon Members and especially the Parliamentary Budget Committee for the comprehensive review of estimates, recommendations thereof and insightful debate. I want to assure Hon Members that we shall review and consider these recommendations as we finalize the Appropriation Bill
III: FACILITATING THE PRIVATE SECTOR FOR SUSTAINED GROWTH AND EMPLOYMENT CREATION 20. Mr. Speaker, as I have already stated, the Government will facilitate the private sector as the key driver of growth and employment by, among other measures:
(i) safeguarding macroeconomic stability;
(ii) continuing with investment in infrastructure development; (iii)undertaking further financial sector reforms; (iv) enhancing investment in security;
(v)deepening structural reforms, including rationalization of the public service; and
(vi)expanding markets through regional integration.
21. Mr. Speaker, as I had indicated earlier, despite challenges of 2011, our economy has tabilized and inflation has declined steadily since November 2011. This follows coordinated monetary and fiscal policies actions taken by the Central Bank and the Ministry of Finance to contain inflation and exchange rate pressures. The economy is now set on a sustained path of higher growth in the medium term.
22. Going forward, Mr. Speaker, we expect that the supply-side driven pressures on prices and the exchange rate will subside in line with the gradual fall in global oil prices
and ample supply of food arising from the ongoing rains and expanded irrigation program. This should also reduce the demand pressure on imports and the current account.
23. The CBKs’ monetary policy will be geared towards bringing down inflation to single digit level within a few months’ time and thereafter be kept stable at around the 5 percent target over the medium term. Mr. Speaker, in line with Section 4 of the CBK Act, I will shortly be writing to the CBK’s Monetary Policy Committee to pursue the proposed inflation target of 5 percent with an upper bound of 7 percent by end of June 2013.
TRADE AND INVESTMENT IN KENYA:
Economic Background
In 2003 the Kenyan Government developed and launched the Economic Recovery Strategy (ERS) for Wealth and Employment Creation, as the blue print for setting the country back on the growth path after year of economic stagnation. The strategy was a shift from previous planning documents that sought to reduce poverty, instead of creating wealth and employment. The implementation of this strategy was viewed as very successful. During this period the economy maintained a rapid growth between 2005-2007 of 5.9% and 7% compared to negative growth in 2002. However, the growth recorded a major decline in 2008 of 1.6% and in response, the government put up measures to stimulate growth including: Restoring investor confidence, Expansionary fiscal policy (e.g. economic stimulus package), Monetary policy focusing on achieving and maintaining price stability within a single digit inflation rate of 5.0%. The economy responded accordingly with an improved growth rate of 2.6 % in 2009 which was mainly attributed to: Resurgence of activities in the tourism sector, Resilience in the building and construction industry and Transport and Communication sector coupled by an enabling environment and the economic stimulus package. However, economic performance was constrained by: Unfavourable weather condition, The global economic recession, Sluggish internal and external demand.It is noteworthy to note that the ERS was a 5 year plan set out to expire in the
financial year 2007/2008. Hence in early 2007 the Government started developing a new strategic long-term plan to take over from the ERS. In June 2008, the Government launched the Kenya Vision 2030 as the new long-term development blueprint for the country. The vision of this strategy is transform the country into “the globally competitive and prosperous country with a high quality of life by 2030”. The vision is based on three "pillars" namely; the economic pillar, the social pillar and the political pillar.The economic pillar aims at providing prosperity of all Kenyans through an economic development programme aimed at achieving an average GDP growth rate of 10% per annum over the next 25 years. The social pillar seeks to build “a just and cohesive society with social equity in a clean and secure environment.”The political pillar aims at realizing a democratic political system founded on issue-based politics that respects the rule of law, and protects the rights and freedoms of every individual in the Kenyan society.
RECENT ECONOMIC DEVELOPMENTS
The Kenyan economy is now poised for a major recovery following two years of weak performance that saw growth decline from 7.1 percent in 2007 to 1.7 percent in 2008 with a subdued rebound of 2.6 percent in 2009.The depressed performance during the 2008-09 was due to a number of adverse shocks including the post election violence in early 2008, a severe drought that affected most parts of the country, high international commodity prices and spillover effects of the global financial crisis.
The economy is for a strong recovery from the year 2010 and beyond to about 5 percent and growth is expected to accelerate further in the medium term. The objective is to steer the economy towards the growth trajectory outlined in the Medium-Term Plan under Vision 2030.
The real GDP growth picked to 4.4 percent in the first quarter of 2010, rising to 5.4 percent in the second quarter, and it is expected to be sustained at that level during the rest of the year. The medium-term look bright, especially after the promulgation of the
new Constitution, which is expected to usher in renewed investor confidence.The Inflation has fallen from a high of 19.5 percent in November 2008 to 3.2 percent by August and September of 2010 and is expected to remain within the 5 percent monetary policy target over the medium term.The Interest rates have remained low and stable owing to ample liquidity in the market with the 91-day Treasury bill rate ranging between 2-5 percent since April 2010. However, lending rates have not declined in tandem.The exchange rate has also been stable though with a tendency to depreciate mainly due to the movement of the US dollar in the international markets. Recently, the shilling has remained in the range of KSh 80-82 to the US dollar.The external sector has improved with the overall balance of payments recording a surplus compared to a deficit in 2008 and part of 2009, following improvement in the current account occasioned by increased surplus in the services account and a stronger rebound in exports earnings. As a result, international reserves held at the Central Bank of Kenya increased to reach US $3.8 billion (equivalent to 3.8 months of imports) by end of June 2010 from US $ 3.2 billion (equivalent to 3.3 months of imports) a year ago. Activity at the NSE has remained buoyant with increased investor confidence and improved corporate governance following the ongoing reforms by the Government. The Government acknowledges the still need to do more to attract more capital and investment to the Country and therefore strategies are in place to continue pursuing sound economic management and deepening of the reform agenda in order to make the economy stable and predictable, and to reduce the cost of doing business. The government is closely collaborating with various development partners including to benchmark the country’s business environment practices in line with international best practice.
OPPURTUNITIES IN KENYA, GOOD REASONS TO INVEST IN KENYA i. A Range of Tax Treaties and Investment Promotion and Protection Agreements. Kenya has a number of tax treaties and investment promotion and protection Agreements. Exports from Kenya enjoy preferential access to world markets under a
number of special access and duty reduction programmes. Kenya is signatory to various agreements aimed at enhancing trade amongst member states.
ii. Multilateral Trade System (MTS) The World Trade Organization (WTO) is the only international organisation dealing with the global rules of trade between nations. The overriding objective of the WTO is to ensure that trade flows as smoothly, freely and predictably as possible. Kenya has been a member of the WTO since its inception in January 1995. iii. ACP/Cotonou Partnership Agreement Exports from Kenya entering the European Union are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products including beef, fish, dairy products, cereals, fresh and processed fruits and vegetables. iv. African Growth and Opportunity Act (AGOA) Kenya qualifies for duty free access to the United States of America (USA) market under the African Growth and Opportunity Act enacted by USA. Kenya's major products that qualify for export under AGOA include textiles, apparels, handicrafts, etc.
v. Generalised System of Preferences (GSP)
Under the Generalised System of Preferences, a wide range of Kenya's manufactured products are entitled to preferential duty treatment in the United States of America, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria, and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment vi. Investment Protection Guarantee
The constitution of Kenya guarantees protection of life and private property. The Foreign Investment Protection Act guarantees against expropriation of private property
by government. Kenya is a signatory to and Member of the Multilateral Investment Guarantee Agency (MIGA) an affiliate of the World Bank which guarantee investors against loss of Investment to political problems in host countries. Kenya is also signatory to International centre for Settlement of Investment Disputes which is a channel for settling disputes between foreign investors and host governments vii. Infrastructure
The construction of superhighway in city of Nairobi is a leading link for investors for transportation renovation of Kenya Railways, Kenya Airways (Pride of Africa) and Lamu Port has made Kenya a hub of International Transportation Centre viii. Bilateral Trade Agreements
Kenya has signed bilateral trade agreements with several countries around the world. Some of the countries are already members of existing schemes offering market access/duty reduction preferences as above.
INVESTMENT INCENTIVES
Tax incentives are mainly in place to promote investment or exports. Major tax incentives available include: Investment Deduction Allowances (IDA): introduced in 1991 to encourage new investment, Industrial Building Allowance: granted on cost of construction of buildings used for manufacturing purposes and also hotel premises, Capital Expenditure on agricultural land: targeted at farmers who incur capital expenditure in the course of their operations Mining deduction allowance: granted to businessmen involved in mining, Import duty set off: allows import duty paid on import of capital equipment to be set off against income tax payable
Corporate tax stands at: - Standard rate of 30%
- 25% for new listing at Nairobi Stock Exchange for 5 years Rate of VAT:
- Standard 16%
- Restaurants 14%
- Input for health care, education and exports of goods and services 0%
Export Processing Zones: allow for duty and VAT free importation of inputs for production of export products within specified zones. Incentives include 10 year tax holiday, exemptions from stamp duty, non liability on income tax for non resident employees, etc, Manufacture under bond: also allow for duty and VAT free importation but require that corporation tax be paid, Tax Remissions Export Office: TREO primarily involves VAT refunds since duty on most oftheir inputs is already at 0% Manufacture under bond: also allow for duty and VAT free importation but require that corporation tax be paid, Tax Remissions Export Office: TREO primarily involves VAT refunds since duty on most of their inputs is already at 0% Kenya is a member of MIGA (Multilateral Guarantee Agency) an affiliate of World Bank and guarantees against non-commercial risks
EXECUTIVE SUMMARY OF MAJOR TRADE PARTNERS OF KENYA
Enrolment no Name of the Students Faculty Guide 117340592001 NIRALI SHAILESHBHAI PATEL 117340592012 CHINTAN RAJENDRABHAI MAKHECHA
117340592052 HARDIK PRABHUDAS NATHAVANI Prof. Rhuta Mehta 117340592053 NIRAV JITENDRABHAI KARELIA 117340592055 AFSIN MANSURALI GILANI 117340592061 HIRAL BHARATBHAI MODHA
EXECUTIVE SUMMARY major trade partners
Kenya's land is considered one of the most important countries of the African continent. Therefore, the demographics of Kenya also share many characteristics similar to its other counterparts. Over the years, this country has acquired larger than many of the economic development activities have been carried out on a wider basis, however, the main source of business is still a rich reservoir of natural resources. Along with the highest growth rate, there seems to be an influx of people from different countries, which is reflected in its cosmopolitan culture thriving.
With the influx of people from different countries, Kenya's population has undergone significant changes in recent years. Statistics indicate that Kenya is ranked 34th in terms of being the world's most populous country. Although in recent years some international human rights organizations, there was an increase in the prevalence of AIDS patients, which is actually hindering a healthy population growth of the country.
In 2011 the Kenyan economy recorded "checked" growth, driven mainly by financial intermediation sectors, tourism, construction and agriculture. Gross domestic product (GDP) growth rate during the first nine months is estimated at 4.2%, down from 4.9% in the same period in 2010. Overall, growth in 2011 was reduced by an unstable macroeconomic environment characterized by rising inflation, depreciation of the exchange rate and high energy costs. The country also experienced low rainfall in the first half of2011, which affected the global food production. The year 2011 is therefore expected to moderate positive growth estimated at 4.5%. The growth is expected to rise to 5.2% in 2012 and 5.5% in subsequent years.
Kenya witnessed moderate political activity in 2011 compared with 2010. The year 2010 witnessed the tensions associated with campaigns referendum for the new constitution (promulgated on August 27,2010) and the appointment of six Kenyans to appear at the International Criminal Court (ICC) in connection with the 2008 after election crisis. The year 2011 was marked by the adoption of legislation giving effect to the new constitution, and the appearance of the six Kenyans at the ICC, while political parties began to prepare for the elections scheduled in 2012.
3 3 Kenya's main imports include machinery and transport equipment (capital goods), petroleum products and iron and steel (intermediate goods). In 1996, the total value of U.S. imports equaled Kenya $ 2,928 million, U.S. $ 727 million of which came from capital goods and U.S. $ 1,719 million of which derive from the intermediate goods. Imports from Western Europe, again particularly Germany and the UK, have significantly increased U.S. $ 715 million in 1994 to U.S. $ 1,048 million in 1997. Imports from African countries increased only marginally U.S. $ 59 million in 1994 to U.S. $ 136 million in 1997. The trade surplus with Africa represents relative economic strength of Kenya on the continent. Japan and the United States are also major exporters to Kenya, with each exporting goods and services respectively equivalent to U.S. And U.S.$ 245 million $ 261 million in 1997. The Kenyan government has promoted trade liberalization policies through the 1990s, reducing, for example, the maximum tariff rate of 45 percent in June 1994 to 25 percent in June 1997. While international financial institutions and Western governments generally tend to support trade liberalization can have negative effects for a country like Kenya, which relies on agricultural exports in exchange for higher imports of capital value added. If the Kenyan manufacturing companies cannot compete with their foreign counterparts, reducing trade protection measures, such as tariffs, will only lead to the delay of the Kenyan industry. The result would be a further deepening of the agricultural sector in the economy, and therefore the extension of trade patterns that maintain the balance unequal country's severe trade deficit. In this context, the idea of pro-trade that all countries benefit when everyone is focused on the production and export in those with a comparative advantage and importing those in which it does not, seems very relevant. Regional trade agreements (RTAs), as the EAC, can offer the benefits associated with trade, while providing a more level playing field and that members are more likely to be at a similar level of development. However, developed countries could benefit relatively disproportionate, which seems to be the case in Kenya and the EAC. Kenya is also a member of the RTA 21-country Common Market for Eastern and Southern Africa (COMESA). Kenya has a free enterprise economy and strong industrial base in the region of East and Central Africa. In 2003 the estimated population of Kenya was 32.2 million, an increase of over 3 million, compared with the figure of 28.7 million registered in the last census in 1999. Consequently, Kenya is about 40% of the total population of the East African Community of about 80 million people. 3 4
Thus, a considerable market, besides being a strategic investment, tourism and trade. It has easy access to various export markets, such as the Common Market for Eastern and Southern Africa (COMESA), the rest of Africa, Asia, the Middle East and Europe. As communications and transportation center for the sub-region, Kenya is also competitive when trade with distant markets such as the U.S., Canada and Australia. Increased trade with the U.S. has been reinforced by the African Growth and Opportunity Act (AGOA). Kenya is a member of various trade and economic organizations that make the country a safe place to do business. These include the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD), the African, Caribbean and Pacific / European Union (ACP / EU) Cotonou Agreement, the IMF International, the World Bank, the Multilateral Investment Guarantee Agency and the African Trade Insurance, among others. Kenya and Germany investing activities is supported by bilateral protocols, especially the double taxation agreement signed between the two countries in 1977, and the Treaty on the Promotion and Reciprocal Protection of Investments, which came into force on December 7, 2000 . Kenya has mostly business with these countries, which are Europe, India, China, UAE, South Africa, Saudi Arabia, Uganda, Japan, United States and Tanzania. In these countries many Kenya is making imports of necessities and services and are doing exports to these countries mostly for global growth of its economy. Kenya is doing trading activities with professional institutions also. The institutes are Kenya National Chamber of Commerce and Industry, the Federation of Kenya Employers, The Fresh Produce Exporters Association of Kenya, the Kenya Flower Council etc The east coast of Africa and the west coast of India have long been linked to travel for traders. India was one of the first countries to establish an office in Kenya. The Indian diaspora in Kenya has actively contributed to the progress of Kenya. Many Kenyans have studied in India. In recent times, there is a growing trade (U.S. $ 2.4 billion in 2010- 11) and investment. Indian companies have invested in telecommunications, petrochemicals and chemicals, floriculture, etc and have executed contracts in power engineering and other sectors. Honorable Foreign Minister Shri S. M. Krishna visited Nairobi in May 27-28, 2011. During the visit, he met with Deputy Prime Minister and Minister of Local Government Hon. Musalia Mudavadi. Honorable Minister for Water Resources and Parliamentary 3 5 Affairs Shri Pawan Kumar Bansal visited Kenya for 16 to 22 September 2011. During his visit he met with the Minister of Water and Irrigation of Kenya Hon. Mrs Charity Kaluki Ngilu.Balance of trade between India and Kenya is unbalanced, the Kenya National Chamber of Commerce and Industry has said. Mombasa branch chairman James Mureu said the trade balance leans more towards India. He said the two countries have almost the same products but less exports to India to imports. Mureu attributed the trade imbalance with the fact that India is more industrialized than most people of Kenya and India. "One area that has brought this imbalance is the fact that India is highly industrialized and produces a lot of industrial equipment that we import. That's probably where the trade balance is tilted in favor of India," he said. Radhakrishnan urged the Kenyan business community to invest more in the cereals that are in high demand in India to offset the trade imbalance. "We mainly export machinery Kenya Pharmaceutical goods, but there is a great demand for grain and other vegetables such as beans and legumes," said Assistant High Commissioner. In addition, in-depth study of the major activities of trade relations between Kenya and India, as well as other partners. Gives brief idea on exports and imports by Kenya with key trading partners. Here, economic growth in Kenya is also highlighted on the basis of their commercial activities. And general information about the economy and the trade balance are also being discussed.
THE MAJOR TRADE PARTNERS OF KENYA
In recent years, Kenya has faced many internal and external challenges that have affected its economic growth and its adaptation to the world trading system. Kenya has been a major beneficiary of technical assistance to several international organizations, including the International Trade Centre (ITC), which has undertaken a number of projects over the past 10 years. After weakening due to political instability in the period 2007-2008 and the global recession, the country's growth rose again to 4.1% in 2010 and should increase in 2011. The engines of growth are agriculture (horticulture and tea), tourism and remittances from the diaspora Kenya. Kenya and the IMF signed an agreement under the Extended Credit Facility to implement a three- year program for 2010-2013. Priority is given to investments in infrastructure and energy (geothermal), as well as expenses related to the implementation of the new Constitution. A gradual reduction in the fiscal deficit and higher inflation control are also provided. The country has a relatively well developed infrastructure, an educated workforce and a 3 6 strategic geographical location, the factors that promote economic growth. However, conflicts corruption, poverty and inter are the major factors facing the country.
Kenya is open for business, which represents 60% of GDP (2009). Trade Government policy aims to further liberalize the economy and make government spending more transparent Most non-tariff barriers have been removed and the rates are not very high. Ranging from 0% for raw materials, 50% for imported products such as matches, for example. The raw materials, capital goods, energy saving bulbs and farm tractors are exempt from customs duties. Goods imported from COMESA (Common Market for Eastern and Southern Africa) member countries enjoy preferential rates.
The country has some advantages that should enable it to promote trade, that is, a skilled workforce and the implementation of a policy of privatization. However, some obstacles, such as lack of transparency in the administration of tariffs and energy costs and labor. Kenya imports more than it exports, resulting in a balance of trade deficit. The main trading partners are the countries of COMESA, the Gulf Cooperation Council and the United States. TRADE POLICY It is important that you understand the country's trade policy. This information will help you align the import and export of plans / operations with the opportunities created by trade policy. Trade policies usually specify the priority areas and what is the government doing to promote trade. Problems of this type of market incentives, market access, trade finance and trade agreements with other countries, will be considered. The focal point of Kenya's trade policy is the Ministry of Trade and Industry. You will need to visit their offices Telposta Towers, Nairobi or provincial and district offices to obtain the desired information on trade policy. Some trade policies that you can benefit from are described in the following paragraphs. The advent of liberalization and globalization has made Kenya the focus of trade policy to move the economy towards greater openness regimewith improved access to its products and services in foreign markets. For this reason, Kenya has pursued a strategy of export growth in the 1990s. Kenya allows most of the imports in the country without restriction, provided that all regulations and standards are met. This course has increased competition for local producers. Tend to benefit consumers through lower prices and better quality products and services.
3 7
In its Economic Recovery Strategy for Wealth and Employment Creation in 2003 - 2007, the Government of Kenya recognized the commercial sector as strategic recovery.Various economic measures to improve the competitiveness of Kenya in international trade was initiated. These programs include incentives for the manufacturing sector in duty exemptions / VAT and discounts on imported inputs, the establishment of free zones offering attractive incentives for export enterprises and active participation in regional integration and mechanisms international cooperation as EAC, COMESA and the ACP / EU. Current international trade policy regime The national trade policy is anchored in Kenya and objectives WTO.The principles1 country is committed to a gradual reduction of tariff and nontariff barriers and the gradual liberalization of trade in services. The country is also a member of RegionalTrade economic blocs (COMESA and EAC, among others) and has also signed a number of bilateral and preferential trade agreements.
Regional Trade Agreements
Kenya is a member of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), the Intergovernmental Authority on Development (IGAD) and the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC) .(A) East African Community (EAC) Kenya, Tanzania, Uganda, Rwanda and Burundi form the East African Community. EACtradingBlock offers five countries as well as economic and social issues politicalcooperation. EAC has created a larger market for goods and services in Kenya with Uganda's main export market beingthe to Kenya and Tanzania and Rwanda are also important for exports exportdestinations Kenya. Kenya's main exports to the EAC countries includemanufactured goods, fuels and lubricants, machinery and other equipment. Negotiations within the community are for relaxation and harmonization issues with labor, work permits, education qualifications, norms, customs, rules of origin and tariff nomenclature common in the region.
A three tariff bands common external tariff (CET) on imports from third countries EAC agreed in the framework of the EAC Custom Union (CU) Protocol, including the list of sensitive products, including goods that pay higher rates than the TEC maximum 3 8 of 25%. The EAC Customs Protocol also provides for the elimination of non-tariff barriers, the provision covers the rules of origin, dumping, subsidies and countervailing duties, dispute settlement, securities and other restrictive trade restrictions, competition, draw back tax returns services, export customs cooperation re property and harmonizing trade procedures and documentation.
The adoption of the TEC by partner states, ending the practice of partner support different national rates and observing the provisions of the EAC Customs Protocol are expected to contribute significantly to improve the simplicity, streamlining andtransparency duty of States EAC Partner. These initiatives inform management of this trade policy. (B) The Common Market for Eastern and Southern Africa (COMESA)Kenya is a member of COMESA, which includes 19 countries that form an economic bloc. Eleven of COMESA member states have joined the COMESA free trade area (FTA) belongs Kenya. As such, trade free trade agreements with COMESA free trade preferences 10 partners, compared to tariff preferences exchanged with non-COMESA FTA. COMESA plans to become a customs union in 2009 and became a full Economic Community by 2025 The COMESA countries have also adopted COMESA CET structure of a four– band category of raw materials at 0%, capital goods at 0%, and intermediate goods at 10% and final goods at25%, with a provision for flexibility on policy space.
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COMESA is currently the main destination for exports from Kenya. The main exports of manufactured goods to COMESA, fuels and lubricants, machinery and other equipments. Market expansion has allowed Kenya to diversify exports particularly in thearea of manufacturing and services trade. Kenya became a major transportation hub in the region financialand leader. In addition, the airline industry, the national carrier has expanded its services to the region.
IMPORTS AND EXPORTS OF KENYA
Kenya is a relatively open economy, with a ratio of trade to GDP (2010) to 15.8 percent. Current research shows that economic development, in 2011, exports totaled Kshs482 Kenya, while imports reached 944million Kshs1, $ 315,671. Total exports increased by 25.3 percent while total imports increased by
38.9 percent compared with the previous year.
Table 4: Major Imports of Kenya
Rank Partners Million Euro % 1 EU27 1700.6 15.1 % 2 India 1671.8 14.9 % 3 China 1489.1 13.3 % 4 United Arab Emirates 1063.1 9.5 % 5 South Africa 991.2 8.8 % 6 Saudi Arabia 744.6 6.6 % 7 Japan 514.4 4.6 % 8 Bahrain 337.5 3.0 % 9 United States 299.7 2.7 5 10 Indonesia 202.6 1.8 % Source: Kenya National Bureau of Statistics
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This is the table of the description of the countries from where Kenya is making imports for different products and services. Here EU27 is having highest rank i.e. 15.1% with 1700.6 Million Euros. Along with it, Kenya is dealing with other major countries like India, China, UAE, Japan, USA etc. with different ratio of imports. Here the least share in imports of Kenya is from Indonesia with 1.8% from first 10 ranked countries. Kenya has maintained similar relationship ratio with India and China i.e. 14.9% &13.3% respectively.
Table 5: Major Exports Partners
Rank Partners Million Euro % 1 EU27 984.6 25.8 % 2 Uganda 390.9 10.2 % 3 Tanzania 380.1 10.0 % 4 United States 223.8 5.9 % 5 Congo, Democratic 166.1 4.3 % 6 Egypt 141.4 3.7 % 7 Rwanda 140.3 3.7 % 8 Pakistan 128.8 3.4 % 9 India 75.3 2.0 % 10 Somalia 69.5 1.8 % Source: Kenya National Bureau of Statistics
This is the table of the description of the countries where Kenya is exporting their products and services. Here also EU27 is having first rank i.e. 25.8% with 984.6 Million Euros. Along with it, Kenya is dealing with other major countries like Uganda, Tanzania, Rwanda, US, India etc. with different ratio of exports. Here least share in exports of Kenya is to Somalia with 1.8% with 69.5 Million Euros. From this we can identify that, Kenya is making imports from highly developing/ developed countries and it is making imports to under developed countries.
4 1 Table 6: Major Trading Partners
Rank Partners Million Euro % 1 EU27 2685.1 17.8 % 2 India 1747.2 11.6 % 3 China 1516.2 10.1 % 4 United Arab Emirates 1126.4 7.5 % 5 South Africa 1020.8 6.8 % 6 Saudi Arabia 757.0 5.0 % 7 Uganda 542.8 3.6 % 8 Japan 541.5 3.6 % 9 United States 523.5 3.5 % 10 Tanzania 422.8 2.8 % Source: Kenya National Bureau of Statistics
This above table is containing the idea regarding to the trading activities of the Kenya with different countries. Here as per the available data, we can analyse it that, naturally Kenya is having majority of its trading activities with the EU27 with 2685.1 Million Euros and 17.8%, as it is connected with it with higher rate of imports and exports. Along with this, Kenya has trading relations with India, China, Uganda, US, UAE, Japan etc. Here Tanzania comes in the top 10 ranking partners of the Kenya into trading related activities with 2.8% share of total trading activities. So we can get to know that Kenya’s trade partners are playing vital role in Kenya’s growing economy.
PRESENT TRADE RELATION WITH INDIA
Each year, the Joint Committee of Trade (JCT) is affected by agreement of free trade between Kenya and India to improve trade relations between Kenya and Africa and other African countries.India and Kenya had agreed a stronger commitment from the Kenya Investment Authority'''' and'''' investindia who would trade flows and investment between India and Kenya. The decision was taken to accelerate the completion of the bilateral investment promotion and protection agreement (BIPPA) and the revised agreement to avoid double taxation (DTAA) between the two countries.
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This Memorandum of Understanding between Kenya and India in the field of industrial scal small and medium enterprises, tourism and civil aviation sector and human resource development, scientific research and industrial standard. At a meeting between the Minister of Commerce and Industry, Government of India and the Prime Minister of the Government of Kenya, which took place in Nairobi, Kenya, 14thOct 2010, it was decided to increase the company level between the two countries in the spirit of South-South cooperation.
The level of investment in India Kenya had reached $ 1.5 billion. Towards Kenya's economic growth, India has recently granted a line of credit (LOC) us $ 61.6 million for the implementation of a power termission project. There is a great potential for cooperation between India and Kenya in the field of information technology, agriculture, including agro-industry, infrastructure development sectors such as roads, rail and including the energy generation, transmission and distribution of energy, oil and gas production and health. India and Kenya to increase their bilateral trade to 2.5 million in 2013.
India and Kenya are trying to do everything possible to organize trade missions, seminars, conferences and fairs to strengthen bilateral trade.Key area for bilateral cooperation are agriculture and agro-industry, medicine and pharmacy, in the infrastructure sectors such as roads, railways and oil technologies of energy, information and communication, gas and health care.
There is agreement among the countries of the Indian Ocean National Research and Development (NRDC) to help Kenya in the value-added packaging and technological intervention to improve competitiveness and agricultural production in the agricultural sector.
4 3 IMBALANCE OF TRADE BETWEEN INDIA AND KENYA
Balance of trade between India and Kenya to India is uneven trade balance leans more towards India. The two countries have roughly the same products but they are less exports to India that imports from Kenya. The reason behind the trade balance is that India is the most populous industrialized Kenya and India. One area that has led to this imbalance is the fact that India is highly industrialized and produces a lot of industrial equipment imports from Kenya. This is the probability that the trade balance tics for India.
Kenyan business community has not reached its full potential. Trade between India and Kenya is estimated at a value of approximately $ 99.6 billion, with 80% of what is India's exports to Kenya and only 20% of Kenya's exports to the India mainly export mechanisms India Kenya. Pharmaceuticals, but there is a great demand for grain and other vegetables, such as nails and legumes.
Kenya has the potential to grow faster than other African countries because of its human resources, ICT and literacy rates to be further explored. Kenya is a country where ICT has developed an impressive level and this should be supported by better relationships. Indian society can participate in the development if ICT in Kenya. India has signed the bilateral agreement between Kenya and Telecommunications Consultants India Limited (TCIL) to implement the Pan African e-network project. The opportunity of this program is distance education, telemedicine and medical education (CME).
The ICT Board has been asked to identify the locations of the sites before the installation and feasibility studies could be conducted by TCIL. Indian side also develop cooperation in the formation of the Kenya Advanced Telecom Training Centre (ALTTC) Ghaziabad and the Centre for Excellence in Telecom Technology and Management, Mumbai. Cooperation also extends to the fields of infrastructure development and governance, ICT services related to the operation of telecommunications support and call center information in the field of agriculture. Side of Kenya said that the site was identified in late October 2010. The National Coordinator has been identified and details to be passed. All equipment has been received and approved by the Kenya ICT Board. The teams will be sent to the sites identified for installation. TCIL ICT Council shall cooperate with the establishment of a call center for the agricultural sector to 4 4 revolutionize the flow of information from farmers benefit tremendously and also the creation of a database for other organizations.
IMPORT AND EXPPORT BETWEEN INDIA AND KENYA
Table 7: Import from Kenya
Values in US$ Millions Year Amount $ Growth (%) Share (%)
2001-02 31.94 69.68 0.06 2002-03 33.55 5.02 0.05 2003-04 41.93 24.99 0.05 2004-05 46.73 11.43 0.04 2005-06 48.52 3.84 0.03 2006-07 56.46 16.36 0.03 2007-08 86.64 53.46 0.03 2008-09 82.17 -5.16 0.03 2009-10 78.93 -3.95 0.03 2010-11 123.98 57.09 0.03 2011-12 118.73 -4.23 0.02 Source: Foreign Trade Performance Analysis
This is the table of the imports made by India from the Kenya. In which, we can easily find that in last decade, gradually the amount is constantly rising from 2001-02 to 2011-12 except in between 2 years. But in growth rate, we can able to see that it is very much fluctuating around 5% to 20% in most of the years. Though it has reached to 53% and 57%, very next year it falls down according to the data. But here share of imports are declining and very much low i.e. around 0.03%. In 2008-09, 2009-10 and 2011-12 the growth rate of the imports made by India from Kenya is negative i.e. -5.16, -3.95 & -4.23 respectively.
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Table 8: Export to Kenya
Year Amount $ Growth (%) Share (%)
2001-02 156.01 12.68 0.36 2002-03 203.59 30.5 0.39 2003-04 229.48 12.72 0.36 2004-05 426.64 85.92 0.51 2005-06 576.54 35.14 0.56 2006-07 1309.22 127.08 1.04 2007-08 1584.63 21.04 0.97 2008-09 1362.10 -14.04 0.74 2009-10 1452.00 6.6 0.81 2010-11 2182.01 50.28 0.87 2011-12 2277.72 4.39 0.72 Source: Foreign Trade Performance Analysis
This is the table of the exports made by India to the Kenya. In which, we can easily find that in last decade, gradually the amount of exports is constantly rising from 2001-02 to 2011-12. Although the imports made by India are going down as per growth rate, the exports related activities have never affected by it. And exports are growing by share wise also i.e. from 0.36% to 0.72% per year. But in the year 2008-09, the exports have been affected and it has become negative with 14.04% growth rate with 1362.10 Million Dollars. But if we consider the overall growth of exports to Kenya from India, then it has definitely raised.
4 6 Kenya’s top 12 imports from India:-
ls, distillation products, etc
earth, stone, plaster, lime and cement
Favorable Reasons for India to trade with Kenya:-
Kenya has an estimated population of 37.2 million and is expected to reach 60 million people in 2030. It is also a very young country, with almost 50% of Kenya's population under the age of 15. The country has an extensive infrastructure, extremely well educated, speak English and multilingual population, with a strong entrepreneurial tradition. The region is also economic, trade and logistics in Africa as a whole.
The Kenya's gross domestic product (GDP) was estimated at about $ 27 billion in 2007, placing Kenya among the five largest economies in sub-Saharan Africa. The economy has in recent growth rates of 6.4% and 7.0% in 2006 and 2007 respectively. It is projected to grow by 10% by 2012 and maintain thereafter. 4 7
This can vary due to the current global crisis. The government took steps to improve the economic competitiveness of Kenya.Investors seeking investment opportunities in Africa are encouraged to consider Kenya as a country has great advantages due to:
Excellent connectivity to major shopping areas throughout the world and time that make it easy to work with most of the continents. Nairobi is the undisputed transportation hub of East and Central Africa and the largest city between Cairo and Johannesburg. In addition, the port of Mombasa is the deep water port in the region's largest, providing the transportation needs of the country in more than a dozen.A vast pool of educated manpower and skilled who have made this country the manufacturing, commercial and financial center in East and Central Africa.A leading tourism, wildlife and safari destination. The tourism industry is already one of the most successful in the world, continues to grow.A fully liberalized economy without exchange controls or price. There are no restrictions on the domestic and external borrowing by residents and nonresidents.The more developed the market share in East and Central Africa region namely the Nairobi Stock
Exchange (NSE). A close relationship and cooperation between the government, private sector and development partners, which is conducive to investment.Composition of regional trading blocs COMESA and EAC, as well as a beneficiary country under preferential trade agreements offered by U.S. AGOA and improving EU-ACP cooperation and other bilateral cooperation Near East and Central Africa market. Both have an area larger than China and has a population larger than that of the United States
Potential for exploration and exploitation of mineral resources. Mineral Resources of Kenya, although limited, are attractive and a potential source of valuable materials such as titanium. At current oil exploration is taking place on the coast of the Indian Ocean and other regions of the country.
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Top 10 Kenya’s exports to the India:-
earth, stone, plaster, lime and cement
fabric thereof
Further business opportunities between India and Kenya Both countries need to understand the importance of improving trade relations between the two countries on the basis of competitiveness and the needs of their economies and should make every effort in this direction. Measures should be taken to increase the volume of bilateral trade and diversify the composition of trade, including trade missions, exhibitions, seminars and conferences. Participation in major international fairs and exhibitions held in the two countries will also boost bilateral trade. Educate entrepreneurs of the two countries, the frequent visits of trade delegations should be encouraged.
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EXECUTIVE SUMMERY ON WTO and other Trade Unions and its impact on trade and commerce of that country
Enrolment No. Name of the Students Faculty Guide 117340592154 KEVALVAN HASMUKHVAN GOSAI Prof. Ritesh Khatwani 117340592155 DIPTI PREMJIBHAI GOHEL 117340592157 MAHIPAL BHARATSINH GOHIL 117340592158 BHOOMITA CHANDUBHAI DUDHATRA 117340592163 NISHANT JENTIBHAI JAVIYA 117340592164 RUSHABH RAJESH SHAH
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WTO (Introduction) :-
The World Trade Organization (WTO) is an organization that intends to supervise and liberalization international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round(1986–1994). The organization is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete. The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of the international liberalization of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round. As a result of this impasse, there has been an increasing number of bilateral free trade agreements signed. As of July 2012, there are various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate.
Kenya’s Participation in the WTO I. The problem in context:-
II. The local and external players and their roles :- The government :- The private sector :- Civil society, research and academic institutions :- Academic and research institutions :- (1) Agriculture.
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B. Manufacturing Industry
(C) . Trade Policy Implementation
(D). Multilateral, Regional or Preferential Trading Agreements
(E) Bilateral Trade Agreements
KENYA'S EXTERNAL TRADE RELATIONS (1) Exports:- (A). Imports (B). Balance of Trade (C) . Direction of Trade
The Office of the Deputy Prime Minister and Ministry of Trade takes the lead role in trade policy making process in the country. For instance, the National Export Strategy (NES) and the Private Sector Development Strategy (PSDS0, the two trade policy documents demanded by “Economic Recovery Strategy for Wealth and Employment Creation (ERS) were accordingly formulated in the Office of the Deputy Prime Minister and Ministry of Trade. The two documents identify strategic sectors and set out a road map that would help the country build a strong and thriving private sector in Kenya. Trade Policy Announcement Goal 1: Improving Kenya’s business environment. Goal 2: Accelerating institutional transformation within the public sector. Goal 3: Facilitating growth through greater expansion of trade. Goal 4: Improving the productivity of enterprises. Goal 5: Supporting entrepreneurship and indigenous enterprise development. The formulation of the draft trade policy document which is about to be finalized is being supported and funded Goal 3.
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Conclusion Since independence Kenya has never had a clear and well structured trade policy document. The trade policies as contained in various government documents makes it cumbersome to interpret them and also difficult to be understood by the outside world. This in turn has had an adverse effect on investment. Every effort has now been made and the first trade policy document is expected to be rolled out by early next year.
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EXECUTIVE SUMMARY ON TAX POLICY:
Enrolment No. Name of the Students Faculty Guide 117340592173 SOYABMAHAMAD ABDULGAFAR MANASIYA Prof. Hemali Tanna 117340592174 AAKASH SHARADBHAI CHOTAI 117340592175 HINABEN CHANABHAI RANPARIYA 117340592176 SAGAR SHARADBHAI CHOTAI
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EXECUTIVE SUMMARY TAX POLICY
Kenya's land is considered one of the most important countries of the African continent. Therefore, the demographics of Kenya also share many characteristics similar to its other counterparts. Over the years, this country has acquired larger than many of the economic development activities have been carried out on a wider basis, however, the main source of business is still a rich reservoir of natural resources. Along with the highest growth rate, there seems to be an influx of people from different countries, which is reflected in its cosmopolitan culture thriving.
With the influx of people from different countries, Kenya's population has undergone significant changes in recent years. Statistics indicate that Kenya is ranked 34th in terms of being the world's most populous country. Although in recent years some international human rights organizations, there was an increase in the prevalence of AIDS patients, which is actually hindering a healthy population growth of the country.
In 2011 the Kenyan economy recorded "checked" growth, driven mainly by financial intermediation sectors, tourism, construction and agriculture. Gross domestic product (GDP) growth rate during the first nine months is estimated at 4.2%, down from 4.9% in the same period in 2010. Overall, growth in 2011 was reduced by an unstable macroeconomic environment characterized by rising inflation, depreciation of the exchange rate and high energy costs. The country also experienced low rainfall in the first half of 2011, which affected the global food production. The year2011 is therefore expected to moderate positive growth estimated at 4.5%. The growth is expected to rise to 5.2% in 2012 and 5.5% in subsequent years. Kenya witnessed moderate political activity in 2011 compared with 2010. The year 2010 witnessed the tensions associated with campaigns referendum for the new constitution (promulgated on August 27, 2010) and the appointment of six Kenyans to appear at the International Criminal Court (ICC) in connection with the 2008 after election crisis. The year 2011 was marked by the adoption of legislation giving
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effect to the new constitution, and the appearance of the six Kenyans at the ICC, while political parties began to prepare for the elections scheduled in 2012. Kenya's main imports include machinery and transport equipment (capital goods), petroleum products and iron and steel (intermediate goods). In 1996, the total value of U.S. imports equaled Kenya $ 2,928 million, U.S. $ 727 million of which came from capital goods and U.S. $ 1,719 million of which derive from the intermediate goods. Imports from Western Europe, again particularly Germany and the UK, have significantly increased U.S. $ 715 million in 1994 to U.S. $ 1,048 million in 1997. Imports from African countries increased only marginally U.S. $ 59 million in 1994 to U.S. $ 136 million in 1997. Kenya has the trappings of a modern tax system, including, for example, a credit- invoice VAT, a PAYE individual income tax with graduated but arguably moderate rates, and a set of excise taxes focused on the usual suspects (alcohol, cigarettes, gasoline, etc.). However, with up to 70 percent of GDP produced and possibly as much as 75 percent of labor employed in the informal sector, the ability of the tax system to raise sufficient revenue with minimal distortions is severely circumscribed. In such an environment, raising around one-fifth of GDP in tax revenue is likely to impose very large distortion costs on the economy. Continued reform of both the policy instruments and the administrative and enforcement capacity of the tax system are therefore imperative. In Kenya, the responsibility for paying VAT on certain sales rests not only with the seller but also with the buyer, a system referred to as VAT withholding.xii VAT withholding was first introduced in late 2003 and applied to government agencies that purchased goods and services subject to VAT. There was a concern that the government, through these agencies, was paying VAT-inclusive prices to suppliers, who were not necessarily remitting the revenue to the KRA. Subsequently other purchasers were brought into the withholding regime, and in 2004-05 there were about 2000 so-called VAT withholding agents – purchasers who were required to withhold VAT In that year, about 40 percent of VAT revenue was collected from these agents.
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Here we had studied the Kenyan taxation and had compared with the Indian taxation and by studying both the taxation we can came to know the basic corporate benefits to do the business with both the countries. Kenyan Tax Kenya’s tax system has undergone more or less continual reform over the last twenty years. On the policy side, rate schedules have been rationalized and simplified, a new value-added tax introduced, and external tariffs brought in line with those of neighboring countries in East Africa. At the same time, administrative and institutional reforms have taken place. Most notable among these was the creation of the semi-autonomous Kenya Revenue Authority (KRA) in 1995, which centralized the administration of tax collection. Kenya has the trappings of a modern tax system, including, for example, a credit- invoice VAT, a PAYE individual income tax with graduated but arguably moderate rates, and a set of excise taxes focused on the usual suspects (alcohol, cigarettes, gasoline, etc.). However, with up to 70 percent of GDP produced and possibly as much as 75 percent of labor employed in the informal sector, the ability of the tax system to raise sufficient revenue with minimal distortions is severely circumscribed. In such an environment, raising around one-fifth of GDP in tax revenue is likely to impose very large distortion costs on the economy. Continued reform of both the policy instruments and the administrative and enforcement capacity of the tax system are therefore imperative. Income tax Slab
Yearly income (KSHs) Tax Rate
0 to 121,968 10%
121,969 to 26880 15%
236,881 to 351,792 20%
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351,793 to 466,704 25% Over 466,704 30% Kenyan residents are taxable on their worldwide employment income, whereas a nonresident is taxable on Kenyan-source employment income. Only Kenyan citizens may offset tax on foreign employment income against the tax charged in Kenya on such income. Non-citizen residents must include their after-tax foreign-source employment income in their Kenya taxable income.
Taxable income
All income accruing in, or derived from, Kenya is subject to tax in Kenya in the same way as applies to the business income of companies. Employment income is broadly defined and includes amounts paid outside Kenya. Fringe benefits are taxable on the employee, at either actual or deemed cost.
Capital gains
Capital gains are not taxable in Kenya.
Tax Deduction and allowances
Personal tax relief in Kenya : KES 1,944 per annum
Deduction from Taxable income
Up to KES 150,000 annually in mortgage interest for owner-occupied property. Contributions to a registered pension or provident fund up to KES 240,000 (The deduction may not exceed 30% of employment income)
15% of health or life insurance premium payments (up to KES 60K annyally)
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Kenya Corporate income Tax
The general corporate income tax rate in Kenya is 30%, with a branch of a foreign company taxed at 37.5%
Newly listed companies enjoy a reduced rate for 3-5 years following the year of listing, the rate (20%-27%) and period depending on the percentage of capital listed (must be more than 20%).
Residence – A company or similar corporate entity is tax resident if incorporated under Kenyan law, if management and control of its affairs are exercised in Kenya or if the Minister of Finance declares the entity to be tax resident in a notice published in the Kenya Gazette.
Basis – Resident and nonresident corporate entities are subject to tax on all income accruing in or derived from Kenya.
Taxable income – Income tax is imposed on a company's gross income minus allowable deductions. In general, expenses must be incurred "wholly and exclusively" in the production of income and not be capital in nature to be deductible for tax purposes.
Taxation of dividends – Dividends from a Kenyan company are not subject to additional tax other than what is deducted at source (see "Withholding tax", below).
Attributable expenses are disallowed as deductions. Dividends from a foreign company are not taxable in Kenya.
Capital gains – Capital gains are not taxable in Kenya (while there is capital gains legislation, it has been suspended since 1985).
Losses – Business income, investment income (other than for financial institutions, for which investment income is considered business income), rental income and income from agriculture are assessed separately and losses only may be utilised against taxable income from the same source. As from 12 June 2009, tax losses may be deducted in the year in which they arise and the 4 following years of income (previously, an indefinite carry forward was allowed). Losses may not be carried back and capital losses are not deductible.
Surtax – No
Alternative minimum tax – No
Foreign tax credit – Foreign taxes paid are treated as an allowable expense, except where a tax treaty applies, in which case a tax credit is granted. Participation exemption – No Holding company regime – No Tax Incentives – Kenya provides for a 100% investment deduction on hotel buildings and on buildings and machinery used in manufacturing. Manufacturing investment in buildings and machinery situated within satellite towns adjoining Nairobi, Mombasa or Kisumu attract an investment allowance of 150%. Enterprises in export Processing Zones enjoy a 10-year tax holiday.
Withholding tax: Dividends – No withholding tax is imposed if the recipient is a qualifying Kenyan financial institution or the resident recipient company controls 12.5% or more of the
capital of the payer. Otherwise, the rate is 5% for dividends paid to residents of Kenya and on listed shares for citizens of the East African Community, and 10% for other nonresidents. Interest – The general rate on interest paid to residents and nonresidents is 15%. Royalties – Royalties paid to residents are subject to a 5% withholding tax; the rate is 20% for royalties paid to nonresidents. Branch remittance tax – No
Other taxes on corporations:
Capital duty – See under "Stamp duty. Payroll tax – No Real property tax – Land rates are assessed by local authorities. See also "Transfer tax".
Social security contributions – An employer must contribute 5% of payroll to the National Social Security Fund, up to an annual maximum of KES 2,400 per employee.
Stamp duty – Stamp duty is charged at nominal or ad valorem rates on certain financial instruments and transactions. Stamp duty of 1% is payable upon the creation and increase of authorised share capital. Stamp duty is levied at a rate of 4% on immovable property (2% if levied outside the municipalities) and 1% on the transfer of shares and other securities. An exemption applies if the shares/securities are listed on the Nairobi stock exchange.
Transfer tax – See under "Stamp duty."
Other – Compensating tax is imposed on dividends declared from untaxed profits and is calculated as the cumulative tax paid since 1988 (including compensating tax and tax attributable to dividends received), less the cumulative tax attributable to dividends paid at the standard rate. This tax is not recoverable against future income tax liabilities. Fringe benefits tax is chargeable on companies in respect of concessionary rate loans granted to employees. All other benefits are taxable to the employee.
Anti-avoidance rules:
Transfer pricing – Kenyan law requires arm's length pricing between related enterprises. Compliance with the OECD guidelines generally ensures compliance.
Thin capitalization – Interest expenses are proportionately restricted for foreign controlled companies (other than licensed financial institutions) when the ratio of all interest-bearing liabilities exceeds 3 times the payer's issued and paid up capital and revenue reserves/accumulated losses. Control, for CFC purposes, includes participations of at least 25%.
Controlled foreign companies – No Other – No
Disclosure requirements – The tax authorities have the statutory right to require information from a taxpayer concerning its own tax affairs, and also may require information from banks about payments of interest.
Administration and compliance:
Tax year – The tax year is the calendar year, although a company may adopt any year end. All taxable income is assessed in the fiscal year in which the company's accounting year ends.
Consolidated tax returns – Consolidated returns are not permitted; each company must file a separate return.
Tax Filing requirements – The self-assessment and compensating tax returns must be filed within 6 months of the end of the company's accounting period. Tax instalments are due within 20 days of the end of each quarter year based on the relevant proportion of the estimated current or 110% of the tax for the prior year, less previous instalments paid and withholding tax deducted by customers, with the balance of tax, if any, due 4 months after the company's year end. Agricultural companies make their first instalment payment 20 days after the third quarter.
Employers are required to submit quarterly Pay As You Earn (PAYE) returns before the 10th of the month following the end of each quarter, in respect of emoluments earned in each of the three months, including the tax deducted.
Penalties – Late payments of self-assessed tax are subject to a 20% penalty, plus 2% per month. Late filing is subject to a 5% penalty (minimum KES 10,000) on any amount still owed 4 months after the company's year end.
Rulings – Taxpayers may seek non-binding interpretations by the Kenya Revenue Authority of tax legislation as it applies in general, or to specific situations.
Kenyan VAT Rate
The standard VAT rate in Kenya is 16%.
0-rated supplies include the export of
Goods and taxable services and the supply or import of specified goods, particularly where used in agriculture, health and education, computer hardware and software, international air travel and supplies to licensed oil exploration companies. Taxable Transactions
VAT is imposed on the supply of taxable goods and services made or provided in Kenya by a taxable person in the course of or in furtherance of any business carried on by that person and on the importation of goods and services into Kenya. VAT Registration –
Registration for VAT is compulsory where the turnover of taxable supplies is, or
is expected to be, KES 5 million or more in a 12-month period.
All businesses with annual turnover greater than KSh 3 million are supposed to
x register as VAT taxpayers and submit monthly returns. In addition, certain
traders and members of certain professions are required to register
xi independently of their turnover, but this requirement is not well enforced. The
number of businesses registered for VAT is currently about 54,000, up from
36,000 two years ago. However, only about 30,000 VAT returns were received each month in 2004-05, suggesting that many firms are dormant (have fallen below the threshold, but have failed to deregister, which itself can be a costly process) or non-compliant. The large, and possibly inefficient, increase in the number of registered firms is thought to be due to a number of issues, including the requirement that any firm seeking a contract with a government agency must be VAT-registered (even if it falls below the threshold, and even if it ends up not winning acontract), and the VAT withholding regime, discussed presently. This distribution of VAT payers and collections is shown in Table 5.5 in the Appendix. In most VAT systems, the seller of a product is required to remit tax on sales. In practice, there are a number of ways in which the system can be implemented. First, the seller might base the calculation of tax payable on an explicit accounting of value added. Alternatively, the seller assesses VAT on gross sales but claims a credit for VAT already paid on inputs. Under both these systems, only the net amount of VAT is sent to the tax collection agency. Alternatively, the seller may be required to write a check for VAT assessed on gross sales, and claim a refund for VAT paid on inputs.
In Kenya, the responsibility for paying VAT on certain sales rests not only with
xii the seller but also with the buyer, a system referred to as VAT withholding. VAT withholding was first introduced in late 2003 and applied to government agencies that purchased goods and services subject to VAT. There was a concern that the government, through these agencies, was paying VAT-inclusive prices to suppliers, who were not necessarily remitting the revenue to the KRA. Subsequently other purchasers were brought into the withholding regime, and in 2004-05 there were about 2000 so-called VAT withholding agents – purchasers who were required to withhold VAT In that year, about 40 percent of VAT revenue was collected from these agents.
Excise Taxes
Excise taxes are levied on (imported) oil products, as well as consumption of beer and spirits, cigarettes, matches, and tobacco. Before the TMP, excise taxes had been levied at specific rates, but moderate to high inflation induced a change to an ad valorum basis. Later, in the 1980s, the tax regimes were selectively switched back to specific charges in the face of undervaluation by traders.
Personal and corporate income tax
Income tax is levied on individuals, corporations and certain specified earnings. It takes the form of tax on actual earned income in the case of individuals and on company profits. A withholding tax is charged on other sources of income including royalties, dividends and rental income among others26. These taxes generally capture formal sector business profits and employment income only.
Income tax is divided into four separate categories: Personal Income Tax (PIT), Pay as You Earn (PAYE), Corporate Income Tax (CIT) and Withholding Tax (WHT). Personal Income Tax (PIT) is a tax on income from individual businesses paid largely by self-employed entrepreneurs. At the end of each year, they lodge their self-assessment income tax returns for their businesses to show income and deductible business expenses. They then pay PIT27 on the profits.
Income from employment is also taxable and is subject to Pay as You Earn (PAYE). Under the PAYE system the employer, as an agent of the tax authority, is required to recover tax on employment income including the value of all benefits except medical ones. That income is taxed in full, as expenses are not deductible in the case of employment income28. In the cases of both PIT and PAYE, tax is charged at the same graduated scale tax rate but on different tax bases29.
Trade taxes
Trade taxes are taxes on exports and imports. Customs or import duty is the most dominant of the trade taxes and is charged on the CIF value (cost value including insurance and freight)31 of imported goods based on tariff bands ranging from 0 to 100 per cent.
Excise tax is also a trade tax applied to either production or sale, to domestic output or imported, with either ad valorem or specific rates. Kenya’s excisable commodities at the moment are alcoholic beverages, soft drinks, mobile air time, bottled water, tobacco, fuel, cosmetics, jewellery and motor vehicles. Excise tax rates are particularly high in cases where a negative impact results from consuming harmful goods or services, or in cases of luxury goods that have a lesser substitution effect even with higher tax rates.
Comparison between India and
Kenya
Indian Kenyan Economy stats Economy stats Aid as % of GDP 0.3% 4.9% Ranked 113rd. Ranked 50th. 15 times more than India Economic freedom 1.5 1.9 Ranked 123rd. Ranked 89th. 27% more than India Exports to US $3,233,200,000.00 $56,600,000.00 Ranked 19th. 56 times more than Kenya Ranked 99th. GDP $4,164,000,000,000.00 $41,480,000,000.00 Ranked 5th in 2006. 99 times more than Kenya Ranked 91st in 2006. GDP growth > 9.23 annual % 5.81 annual % annual % Ranked 14th in 2005. 59% more than Kenya Ranked 58th in 2005. GDP (per capita) $3,751.99 per capita $1,180.31 per capita Ranked 121st in 2006. 2 times more than Kenya Ranked 165th in 2006. GDP per capita in $597.00 $947.00 1950 Ranked 49th. Ranked 40th. 59% more than India GDP per capita in $853.00 $1,055.00 1973 Ranked 50th. Ranked 47th. 24% more than India GDP > PPP $3,362,960,000,000.00 $34,504,000,000.00 Ranked 4th. 96 times more than Kenya Ranked 82nd.
Gross National $477,000,000,000.00 $10,657,900,000.00 Income Ranked 12th. 44 times more than Kenya Ranked 75th.
Gross National $14.37 per $100 $30.73 per $100 Income (per $ GDP) Ranked 160th. Ranked 87th. 114% more than India Human 0.602 0.474 Development Index Ranked 128th. 27% more than Kenya Ranked 155th. Income category Low income Low income
Income distribution > 3.5% 2.4%
Part -2 (Industry Analysis of Kenya)
Agriculture sector Summary
Enrollment No Student Name faculty name 117340592012 CHINTAN RAJENDRABHAI MAKHECHA 117340592052 HARDIK PRABHUDAS NATHAVANI 117340592053 NIRAV JITENDRABHAI KARELIA Proff. Rhuta Mehta 117340592055 AFSIN MANSURALI GILANI 117340592061 HIRAL BHARATBHAI MODHA
Agriculture sector Summary
Agriculture plays an important role in Kenya’s economy, accounting for around half of the country’s exports. Tea is the main earner, but vegetables, coffee, fruit, cotton and flowers are also important.
Agriculture remains the most important economic activity in Kenya, although less than 8% of the land is used for crop and feed production. Less than 20% of the land is suitable for cultivation, of which only 12% is classified as high agricultural land potential (adequate rainfall) and about 8% is land potential in the medium. The rest of the land is arid or semiarid. About 80% of the labor force is involved in agriculture and food processing. Agriculture in Kenya is typically carried out by small producers who grow usually no more than two hectares (about five acres) with limited technology. These small farms operated by about three million rural families, representing 75% of total production. Although there are still important European-owned coffee, tea, and sisal plantations, an increasing number of peasant farmers grow cash crops.
Kenya has two farming systems i.e. rain fed and irrigated agriculture. Then agricultural business activities in Kenya is Crop Production and in that food crops, industrial crops, Horticulture, then second is Livestock Production in that Dairy Industry, Meat Industry, Sheep and goats, Poultry, Pigs, Apiculture, Camels then third is Aquaculture then fourth is Forestry and Forest Products fifth is Wildlife.
Since many Kenyan’s rely on agriculture for their livelihood, unpredictable rainfall patterns are a serious worry for the future. Sugar cane, maize, plantains and beans, as well as meat and dairy products are grown mainly for local consumption.
There is particular concern that recent droughts have been worsened by local deforestation. Kenya’s Green Belt Movement (led by Professor Wangari Maathai, the first African woman to receive a Nobel Peace Prize) has spearheaded the planting of more than 30 million trees. This may sound like a lot of trees. But Kenyan forests have shrunk 60% in just two decades, with wood cut down for fuel and land used for farming. It is believed that organic agriculture itself has a large potential for poverty alleviation, food security, trade, environmental conservation, as well as promotion of indigenous
knowledge. This potential however, remains largely unexplored in Kenya due to a myriad of reasons major among them being the lack of a clear policy direction by the government to facilitate the growth of the organic agriculture sector. One of the possible reasons for lack of a policy direction is the fact that no convincing case for the sector has been brought to the policy makers. This report attempts to provide such a justification by showing how production and trade in organic agriculture has the potential of meeting some of the pressing national concerns.
With the largest dairy group in east and southern Africa, Kenya has the potential to meet local demand for dairy and target regional markets. As one of the largest African exporters of fresh produce to Europe, Kenya’s horticulture industry can expand local and regional markets. Markets, in turn, can significantly grow through reforms that address policy constraints, irrigation, roads, agricultural inputs, extension, and market access promotion.
Then Kenya’s import export is from different trade partners are; The import partners are India, China, United Arab Emirates, South Africa, Saudi Arabia, Japan, Bahrain, United States and Indonesia. The export partners are Uganda, Tanzania, United States, Congo, Democratic, Egypt, Rwanda, Pakistan, India, Somalia.
Present trade relation with the India of Kenya is, in Each year, the Joint Committee of Trade (JCT) is affected by agreement of free trade between Kenya and India to improve trade relations between Kenya and Africa and other African countries. India and Kenya had agreed a stronger commitment from the Kenya Investment Authority'''' and'''' investindia who would trade flows and investment between India and Kenya. The decision was taken to accelerate the completion of the bilateral investment promotion and protection agreement (BIPPA) and the revised agreement to avoid double taxation (DTAA) between the two countries.
Balance of trade between India and Kenya to India is uneven trade balance leans more towards India. The two countries have roughly the same products but they are less exports to India that imports from Kenya. The reason behind the trade balance is that India is the most populous industrialized Kenya and India. One area that has led to this imbalance is the fact that India is highly industrialized and produces a lot of industrial equipment imports from Kenya. This is the probability that the trade balance tics for India. There are many challenges faced by Kenya. Investors interested in investment opportunities in Africa are highly encouraged to consider Kenya as a country offers enormous advantages as a result of:
Excellent connectivity with major centers around the world and time zones that make it easy to work with most of the continents. Nairobi is the undisputed transportation hub of East and Central Africa and the largest city between Cairo and Johannesburg. Also the port of Mombasa is the deep-water port most important in the region, providing the transport needs of more than a dozen countries.
Import and Export between Kenya and India
Table 1 TOP TEN EXPORTS TO INDIA
All HS Descrip Kenya's Kenya's Kenya's % % % values in USD Codetion Exports toExports toExports toGrowth Growth CAGR over 3 million Rank India 2006India 2007India 20082007/2006 2008/2007 years - TOTAL All 52.22 86.73 98.87 66.08 14.01 37.60 products 1 28 Inorgani 19.37 38.60 56.65 99.27 46.74 71.00 c chemicals, precious metal compound, isotopes 2 25 Salt, 5.64 6.34 10.48 12.42 65.35 36.34 sulphur, earth, stone, plaster, lime and cement 3 9 Coffee, 5.93 7.25 9.38 22.41 29.34 25.83 tea, mate and spices 4 41 Raw 5.58 6.03 5.71 8.01 -5.29 1.14 hides and skins (other than foreskins) and leather 5 8 Edible 1.57 0.86 3.72 -45.21 333.92 54.19 fruit, nuts, peel of citrus fruit, melons 6 78 Lead 0.15 2.04 2.17 1,278.38 6.18 282.56 and articles thereof 7 51 Wool, 1.73 2.33 1.88 34.93 -19.25 4.39
animal hair, horsehair yarn and fabric thereof 8 53 Vegetab 0.85 1.58 1.50 85.58 -5.12 32.70 le textile fibroses, paper yarn, woven fabric 9 74 Copper 1.45 0.74 1.14 -49.07 53.78 -11.50 and articles thereof 10 71 Pearls, 1.34 1.43 0.89 6.58 -37.45 -18.35 precious stones, metals, coins, etc Source: www.indexmudi.com From above table we can identify that in 2006 Kenya’s export to India products like inorganic chemicals, precious metal compound, isotopes is 19.37 in 2007 they export more i.e. 38.60 and it is increase in 2008 i.e. 56.65. so we can say that the growth of Kenya is there in all these products likewise we can see that all other products also making growth except from some products. Table 2 TOP TEN IMPORTS FROM INDIA
All HS Descrip Kenya's Kenya's Kenya's %Growt CAGR values in USDCode tion Imports fromImports fromImports fromh 2008/2007 over 3 years million Rank India in 2006India in 2007India in 2008 - Total All 524.28 844.55 1,315.4 55.76 58.40 Products 7 1 27 Mineral 117.148 277.55 502.89 81.19 107.19 fuels, oils, distillation products, etc 2 84 Nuclear 61.532 77 160.47 108.38 61.49 reactors,
boilers, machinery, etc 3 30 Pharma 57.39 67.76 115.53 70.49 41.88 ceutical products 4 85 Electric 33.21 82.22 108.39 31.81 80.66 al, electronic equipment 5 72 Iron and 28.69 49.94 70.54 41.23 56.80 steel 6 87 Vehicles 21.83 33.22 36.26 9.12 28.88 other than railway, tramway 7 39 Plastics 21.64 27.37 33.31 21.66 24.07 and articles thereof 8 25 Salt, 8.34 9.03 20.19 123.41 55.59 sulphur, earth, stone, plaster, lime and cement 9 48 Paper & 6.14 12.01 20.17 67.9 81.25 paperboard, articles of pulp, paper and board 10 73 Articles 11.72 14.6 19.44 33.18 28.79 of iron or steel Source: www.indexmudi.com From above table we can identify that in 2006 Kenya’s import from India products like Mineral fuels, oils, distillation products is 117.48 in 2007 they export more i.e. 277.55 and it is increase in 2008 i.e. 502.89 so we can say that Kenya is importing more from India and likewise we can see that the import of Kenya from India is increase. At last in conclusion we can say that Kenya is developing economy because it is growing fast and Kenya's economy,
the largest in East Africa has increased dramatically in recent years, driven by several key factors. The country has specific advantages: a labor relatively well educated, a port is essential entry point for goods destined for countries of Eastern and Central Interior, abundant wildlife and miles of coastline and attractive, especially a government that is committed to the implementation of trade reforms. The WTO takes advantage of market opportunities through trade rounds. The current trade negotiations, the Doha Development Agenda (DDA) were released on November 14, 2001 in Doha, Qatar.
Then main economic indicators are; Investors willing to take advantage of investment opportunities in Africa are well encouraged to consider Kenya as a country offers immense advantages as a result of: Excellent connectivity to major centers around the world and time zones that make it easy to work with most of the continents. Nairobi is the undisputed transportation hub of East and Central Africa and the largest city between Cairo and Johannesburg. Also the port of Mombasa is the largest deep water port in the region, supplying countries sending more than a dozen.
So as we can see that there five major sector which contribute to growth of the Kenya. Transportation and communication is major sector which contribute highest to the growth of the country which indicates that transportation and communication industry is growing at good rate and sector is developed at full extent. Financial sector plays important role for any economy and contribute to the growth of the economy. In case of Kenya, it is growing at 6.8 %. Wholesale and retail grew by 18.5% and manufacturing grows 10.3%. These two areas are interrelated, since the production of manufacturing firms is the wholesale and retail so that the two go together.
Kenya commitments under the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the World Trade Organization (WTO), the political influence of trade Kenya.
Then about major trade policy in Kenya, its Economic Recovery Strategy for Wealth and Employment Creation in 2003 - 2007, the Government of Kenya recognized the commercial sector as strategic recovery. Various economic measures to improve the competitiveness of Kenya in international trade was initiated. These programs include incentives for the manufacturing sector in duty exemptions / VAT and discounts on imported inputs, the
establishment of free zones offering attractive incentives for export enterprises and active participation in regional integration and mechanisms international cooperation as EAC, COMESA and the ACP / EU. Then Kenya’s import export is from different trade partners are; The import partners are India, China, United Arab Emirates, South Africa, Saudi Arabia, Japan, Bahrain, United States and Indonesia.
The export partners are Uganda, Tanzania, United States, Congo, Democratic, Egypt, Rwanda, Pakistan, India, Somalia.
Present trade relation with the India of Kenya is, in each year, the Joint Committee of Trade (JCT) is affected by agreement of free trade between Kenya and India to improve trade relations between Kenya and Africa and other African countries. India and Kenya had agreed a stronger commitment from the Kenya Investment Authority'''' and'''' invest India who would trade flows and investment between India and Kenya. The decision was taken to accelerate the completion of the bilateral investment promotion and protection agreement (BIPPA) and the revised agreement to avoid double taxation (DTAA) between the two countries.
Balance of trade between India and Kenya to India is uneven trade balance leans more towards India. The two countries have roughly the same products but they are fewer exports to India that imports from Kenya. The reason behind the trade balance is that India is the most populous industrialized Kenya and India. One area that has led to this imbalance is the fact that India is highly industrialized and produces a lot of industrial equipment imports from Kenya. This is the probability that the trade balance tics for India.
There are many favourable reasons behind trade with India. Then if we talk about agricultural sector of Kenya then Agriculture remains the most important economic activity in Kenya, although less than 8% of the land is used for crop and feed production. Less than 20% of the land is suitable for cultivation, of which only 12% is classified as high agricultural land potential (adequate rainfall) and about 8% is land potential in the medium. The rest of the land is arid or semiarid. About 80% of the labor force is involved in agriculture and food processing. Agriculture in Kenya is typically carried out by small producers who grow usually no more than two hectares (about five acres) with limited technology. These small farms operated by about three million rural families, representing 75% of total production.
Kenya is a leading tea producer in Africa, and was fourth in the world in 1999, behind India, China, and Sri Lanka. Tea Black is the leading source of foreign agricultural Kenya. Production in 1999 was 220 000 tonnes.
Kenya has two farming systems i.e. rain fed and irrigated agriculture. Then agricultural business activities in Kenya is Crop Production and in that food crops, industrial crops, Horticulture, then second is Livestock Production in that Dairy Industry, Meat Industry, Sheep and goats, Poultry, Pigs, Apiculture, Camels then third is Aquaculture then fourth is Forestry and Forest Products fifth is Wildlife.
Then about production of the Kenya is of many main commodities like Centrifugal sugar, Barley, Corn, Cotton, Green coffee, Milled rice, Wheat, Millet.
Then about policies related to import export of Kenya is If one is dealing with the export and / or import of agricultural products will have to comply with certain phytosanitary and other measures have been implemented and are enforced by different agencies entering the Ministry of Agriculture, as described below.
One KEPHIS deal if one is the import or export of plants and plant material. KEPHIS was established in 1996 as a regulatory body for quality control of agricultural inputs and products, and deals with all matters related to plant health. Is the competent authority designated phytosanitary issues.
If you want to export fresh produce, then you need to get a license and that will take care of HCDA. The Authority Horticultural Crops Development Authority (HCDA) was established under the Agriculture Act, Chapter 318. The Authority is responsible to develop, promote, coordinate and regulate the horticultural industry in Kenya.
The Agriculture Act aims to promote and maintain a stable agriculture, to provide for the conservation of soil and its fertility and to stimulate the development of agricultural land, in accordance with accepted practices of good land management and good management earth. The Act regulates the destruction of vegetation for agricultural expansion, and of particular relevance to forests is (Farm Forestry) Agriculture Rules 2009, laid down in this Act, aimed at the promotion and maintenance of forest cover at farm least 10 per cent of all agricultural land held as a means of preserving and maintaining the environment in the fight against climate change and global warming.
India in a small way has been in the export market of nearly 30 years. Among the popular items in export are mango chutneys, pickles. Fruit juices, canned and dried mushrooms, frozen fruits and vegetables and canned. The main mango pulp markets are Saudi Arabia, Kuwait, United Arab Emirates, the Netherlands and Hong Kong. In the case of pickles and chutneys popular markets are USA, UK, UAE, Germany and Saudi.
Changes in fiscal policies have comprehensive progressively introduced. Excise duty and import have been substantially reduced. Many processed foods are totally exempt from excise duty. The customs duty rates have been substantially reduced in the plant and equipment as well as raw materials and intermediates, especially for export production. India has sometimes been called a nation of shopkeepers. This epithet has its roots in the large number of retail companies in India, which totalled more than 12 million in 2004. About 78% of them are small family businesses utilizing only household work.
Even among retail enterprises that employ hired workers, most of them use less than three workers. Indian retail sector appears underdeveloped not only by the standards of industrialized countries but also compared to other emerging markets in Asia and elsewhere.
Exporters of horticulture products have found their way round a major non-tariff barriers to the European market. The Association of Fresh Produce Exporters (FPEAK) announced on Wednesday that he had come up with a new standard that Kenyan exporters allow market access to lucrative European Union (EU).
The new standard known as Kenya GAP has already been recognized by key horticulture European countries import. "Kenya GAP covers vegetables, flowers and fruits," Dr Stephen Mbithi, the Chief Executive FPEAK told a media briefing.
There are many challenges face by Kenya. Investors interested in investment opportunities in Africa are highly encouraged to consider Kenya as a country offers enormous advantages as a result of:
Excellent connectivity with major centers around the world and time zones that make it easy to work with most of the continents. Nairobi is the undisputed transportation hub of East and Central Africa and the largest city between Cairo and Johannesburg. Also the port of
Mombasa is the deep water port most important in the region, providing the transport needs of more than a dozen countries.
Mining Sector Summary
Enrollment Students Name Faculty Guide No 1173405920 TARUN GOKUL RATHOR 65 1173405920 NIKUNJ KISHORBHAI BHALODI 68 1173405920 RAVINDRA PRAFULBHAI AGOLA 69 Prof. Bhoomi Parekh 1173405920 POOJA ASHOKBHAI DOMADIYA 71 1173405920 DHARA JYOTINDRAKUMAR MALAVIYA 75 1173405920 JAY VITTHALBHAI SANGANI 76
OVERVIEW OF MINING SECTOR IN KENYA Kenya's mining industry is dominated by production of non-metallic minerals encompassing industrial minerals such as soda ash, fluorspar, kaolin and some gemstones. Mining accounts for a very small part of Kenya’s annual GDP. Gold is produced primarily by artisanal workers in the west and south western parts of the country, on several small greenstone belts. Iron ore is mined from small localised deposits for use in the domestic manufacture of cement. Clearly seen as one of the largest potential capital projects in Kenya is the Kwale hill, heavy mineral sands project that is being developed along the country's south-eastern coast. Base resources, who acquired the Kwale mineral sands project from Tiomin resources in 2010, consider this project to be a world class advanced development project. All approvals, permits and licenses required for development are in place and a full definitive feasibility study has been completed. The project, which is supported by the Kenyan government, is located just 50km from Mombasa. As part of the Kwale acquisition, base resources has also acquired an option to purchase three further exploration projects from Vaaldiam, namely Mambrui, Kilifi and Vipingo. These projects, which are located along the coast to the north of Mombassa, have a combined jorc compliant mineral resource of 1,388 million tonnes at 3.8% thm. In 2010, the Aviva Corporation acquired an interest in the bubo base metal prospect in west Kenya through a joint venture with afriore international, a wholly owned subsidiary of Lonmin plc. The project comprises 2,800km2 of the Ndori greenstone belt in Kenya, which forms part of the Tanzanian archaeancraton. Previous exploration in this area has identified significant potential for gold, as well as copper, lead and zinc. Overview Of Mining Sector In India The mining industry in India is a major economic activity which contributes significantly to the economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5% only but going by the GDP of the total industrial sector it contributes around 10% to 11%. Even mining done on small scale contributes 6% to the entire cost of mineral production. Indian mining industry provides job opportunities to around 700,000 individuals. India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world. India's metal and mining industry was estimated to be $106.4bn (£68.5bn) in 2010.
However, the mining in India is also infamous for human right violations and environmental pollution. The industry has been hit by several high profile mining scandals in recent times. Geographical distribution:- The distribution of minerals in the country is uneven and mineral density varies from region to region. D.R. Khullar identifies five mineral 'belts' in the country: The North Eastern Peninsular Belt, Central Belt, Southern Belt, South Western Belt, and the North Western Belt. The details of the various geographical 'belts' are given in the table below:- Mineral Location Minerals found Belt Coal, iron ore, manganese, mica, bauxite, copper, kyanite, Chota Nagpur chromite, beryl, apatite etc. Khullar calls this region the mineral North plateau and the Orissa heartland of India and further cites studies to state that: 'this region Eastern plateau covering the statespossesses India's 100 percent Kyanite, 93 percent iron ore, 84 Peninsular Beltof Jharkhand, West Bengalpercent coal, 70 percent chromite, 70 percent mica, 50 percent fire and Orissa. clay, 45 percent asbestos, 45 percent china clay, 20 percent limestone and 10 percent manganese.' Manganese, bauxite, uranium, limestone, marble, coal, gems, Chhattisgarh, Andhra Central mica, graphite etc. exist in large quantities and the net extent of the Pradesh, Madhya Pradesh Belt minerals of the region is yet to be assessed. This is the second and Maharashtra. largest belt of minerals in the country. Southern Karnataka plateau Ferrous minerals and bauxite. Low diversity. Belt and Tamil Nadu. South
Karnataka and Goa. Iron ore, garnet and clay. Western Belt Rajasthan and North Non-ferrous minerals, uranium, mica, beryllium, aquamarine, Gujarat along the Aravali Western Belt petroleum, gypsum and emerald. Range. (Source: www.africamine.com)
SWOT ANALYSIS OF IRON AND STEEL SECTOR OF INDIA
Strengths:-
Abundant resources of iron ore Low cost and efficient labour force Strong managerial capability Strongly globalised industry and emerging global competitiveness Modern new plants & modernized old plants Strong DRI production base Regionally dispersed merchant rolling mills Weaknesses:- High cost of energy, higher duties and taxes High cost of capital Quality of coking coal Labour laws Slow statutory clearances for development of mines Opportunities:- Huge Infrastructure demand Rapid urbanization Increasing demand for consumer durables Untapped rural demand Threats:- Slow growth in infrastructure development Market fluctuations and China’s export possibilities
COMPARISON BETWEEN INDIAN MINING SECTOR AND KENYA MINING SECTOR
Particulars India Kenya Name Indian bureau of mines Kenya chamber of mines
Logo
Establishment year 1948 2000 2nd floor A- Block, Indira Hse No. 7, jacaranda Avenue off Address Bhavan Civil Limes, Gitanga Road, Lavington Nagpur-440102 P.O. Box 3174-00200, Nairobi http://www.kenyachambermines.c Website www.ibm.nic.in om/ +254 73511975, +254 20 386 Contact no. 0712-2561824 1217 Headquarter Nagpur Nairobi Coal, Lignite, Natural Gas, Main Product Crude Petroleum, Bauxite, Iron Gold, Titanium, Iron Ore, Exporting Ore, Manganese Ore, Diamond,Gemstones, lime and cement, etc... Alumina, Bauxite, Zinc, etc... Mineral fuels, oils, Export of minerals Gold, Titanium, soda ash, metal distillation products, Iron and between India and Kenya scrap, etc… steel, etc… (Table-4)
BUSINESS OPPORTUNITY
We will Concluded that from the above different Opportunities, we will select below as a best option: 1. Export from India to Kenya Finished Iron and steel:- Opportunities for export from India to Kenya: Iron & steel are freely exportable Advancement in Technology Easy available of educated employed Government support and better infrastructure Less costly because of easily available of raw material Reason Behind not available of Finished Steel Product: Lack of technology Uneducated manpower Lack of support from the side of government Poor Infrastructure facility Lower level of investment Very costly to manufacture their Not stable government
In India there are many finished steel product manufactures which are our supplier and buyer are such manufactures of iron ore from Kenya. We work as Trading Firm who will work as a middle person. In detail overview of steel sector in India and Kenya we will discuss as below…
OVERVIEW OF STEEL SECTOR IN KENYA Steel is the backbone of the economic activity of any country. The per capita steel consumption is an internationally recognized indicator of the level of development of that country. Direct and indirect consumption of steel in Kenya was projected to be 0.567 – 0.614 million tons in the year 1985 and 1.860 – 2/356 million tons in the year 2000. On the basis of the above projection the per capita steel consumption in Kenya was expected to increase from 20 – 25kg in 1985 to 45 – 50kg of iron and steel by 2000.this can be compared to 798kg in USA and 915kg in japan in 1985 as per a report by unido. Industrial progress and economic well-being are reflected in such physical development as housing, transport facilities, water distribution, industrial premises including warehouses and office space, agricultural mechanization, leisure facilities, healthcare facilities and many others. The iron and steel industry formed 13 percent of the manufacturing sector, which in turn contributed around 13 percent of the GDP. The iron and steel sector is mainly controlled and owned by the private sector of Kenyan Asians unlike in many countries where the iron and steel sector is public owned or government controlled. The Kenyan private sector has over the years invested over kHz. 5 billion in fixed assets for the production of various iron and steel products. The industry is heavily dependent on imported raw materials, as no local sources have been developed to date. Local deposits of iron ore have been identified in several locations but have not attracted commercial interest. Through imports of raw materials and local scrap collection, a sizeable and a growing local capacity has developed to cater for both export and domestic market. From the basic iron and steel industry a diversified network of downstream industries has emerged. These downstream industries include motor vehicle and auto-ancillary, a range of fasteners, reinforcement bars for construction, furniture, agricultural tools, kitchen ware etc.
OVERVIEW OF STEEL SECTOR IN INDIA
The Indian steel industry has entered into a new development stage from 2007- 08, riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 4 the largest producer of crude steel and the largest producer of sponge iron or DRI in the world. As per the report of the Working Group on Steel for the 12 the Plan, there exist many factors which carry the potential of raising the per capita steel consumption in the country, currently estimated at 55 kg (provisional). These include among others, an estimated infrastructure investment of nearly a trillion dollars, a projected growth of manufacturing from current 8% to 11-12%, increase in urban population to 600 million by 2030 from the current level of 400 million, emergence of the rural market for steel currently consuming around 10 kg per annum buoyed by projects like Bharat Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others. At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110 million tonnes by 2019-20. However, based on the assessment of the current on-going projects, both in greenfield and brownfield, the Working Group on Steel for the 12th Plan has projected that the crude steel capacity in the county is likely to be 140 MT by 2016-17 and has the potential to reach 149 MT if all requirements are adequately met. Production Steel industry was relicensed and decontrolled in 1991 & 1992 respectively. Today, India is the 4th largest crude steel producer of steel in the world. In 2011-12 (prov.), production for sale of total finished steel (alloy + non alloy) was 73.42 mi. Production for sale of Pig Iron in 2011-12 (prov.) was 5.78 mi. India is the largest producer of sponge iron in the world with the coal based route accounting for 76% of total sponge iron production in the country (20.37 MT in 2011-12; prov.): Last five year's production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are given below:
Indian steel industry : Production for Sale (in million tonnes)
Category 2007-08 2008-09 2009-10 2010-11 2011-12*
Pig Iron 5.28 6.21 5.88 5.68 5.78
Sponge Iron 20.37 21.09 24.33 25.08 20.37
Total Finished Steel (alloy + non 56.07 57.16 60.62 68.62 73.42 alloy) Source : Joint Plant Committee; *provisional
(Table-9) Demand –Availability Projection Demand – Availability of iron and steel in the country is projected by Ministry of Steel in its Five Yearly Plan documents. Gaps in availability are met mostly through imports. Interface with consumers by way of a Steel Consumers’ Council exists, which is conducted on regular basis. Interface helps in redressing availability problems, complaints related to quality.
BUSINESS PROPOSAL Export Finished steel Products from India to Kenya, there are 2 options available: 1. Manufacturer directly export the products 2. Trading Firm Particular Explain Import Export Licence, Documentation Registered under Indian partnership Act, 1932. Finished Steel Product: -Iron/Steel Coils Main Product -Iron/Steel Sheets -Deformed Iron/Steel Bars -Iron/Steel Pipes Essar Steel Ltd, Gujarat. Supplies: -Iron/Steel Coils -Iron/Steel Sheets Main Supplier / Manufacture of Products Tata Steel Ltd, Jamshedpur. (From: Gujarat, Raigarh, Jamshedpur) Supplies:- Deformed Iron/Steel Bars
Jindal Steel and Power Ltd, Raigarh. Supplies:- -Iron/Steel Pipes - Steel Makers Ltd, Mombasa. - Chuma Sales Ltd, Mombasa. Main Buyer of Products - Kenya United Steel Co Ltd, Nairobi. (From: Nairobi, Mombasa) - Rioco Steel Fabricator Ltd, Nairobi.
- Steel Structures Ltd, Mombasa. - Venus Metal Ltd, Nairobi. Way of Distribution By sea Cargo Export Company Companies for Shipment Imove International Company - Passport, Work permit (if applicable) Shipping Document - Detailed inventory of all of your items Time Required from India to Kenya for 30 to 45 days delivery of goods Way of shipping Kandlaport, Gujarat to Mombasa Port
JOINT TRADE BETWEEN INDIA AND KENYA
The sixth session of the Kenya - India joint trade committee ( JTC ) meeting was held in Nairobi on 12th and 13th October 2010, in accordance with article x of the trade agreement signed between the republic of Kenya and the republic of India on 24thfeb February 1981 in new Delhi. The bilateral trade agreement provides for continuous review of the implementation of the provisions of the bilateral trade agreement, examination of measures for the solutions of problems which arise or may arise in the implementation of this agreement or in the course of development of trade between the two countries and consideration of proposals made by either contracting party within the frame-work of this agreement aimed at further expansion and diversification of trade between the two countries .ruary 1981 in New Delhi.
India-Kenya bilateral trade touches $2.4 billion in 2010-11 India, Kenya expect trade to touch $2.5 billion by 2013 Other o Mr. Sumiyuki OTSUKI, Regional Development & Market Analyst, K&JDI (Kenya & Japan Development Institute) said that India is Kenya’s sixth-largest trading partner. o Bilateral trade grew by 57% to reach US$ 2.4 billion in 2010-11 and us expecting US$ 8 by 2015. Nearly US$ 2.3 billion constituted India’s exports to Kenya. o The Indian exports to Kenya during January-May 2012 was US$ 893 million (13% of total Kenyan imports, largest exporter to Kenya), while Indian imports from Kenya during the first quarter of 2012 amounted to US$ 22 million. o Main Indian exports to Kenya include pharmaceuticals, steel products, machinery, yarn, vehicles and power transmission equipment. o Main Kenyan exports to India include soda ash, vegetables, tea, leather and metal scrap.
MARKET ANALYSIS
Market size: Kenya's annual demand for steel is estimated at about 480,000 tonnes to 600,000 tonnes. Market growth: Data from the Kenya National Bureau of Statistics indicates that steel imports have grown by more than 100 percent in the past five years from US$263 million to $538 million. This has been driven by increased investment in the construction sector and infrastructure projects with the value of building plans approved rising by 18 per cent over the same five-year period. Overall expenditure on road projects rise from $850 million during the 2009/2010 fiscal year to $1.13 billion in 2010/2011. Market profitability: o Buyer power o Supplier power o Barriers to entry o Threat of substitute products Market Competitors: From Kenya From India
Indo African Corp. Mehta Steels Pvt ltd.
Kens metal Industries ltd Gopal steels ltd.
Coast Industrial & Safety Supplies Ltd Vijay Prakash Eromarine Metals Pvt. Ltd. Other Countries M/s Global Trading Company European country Belgium and Luxembourg Market trends: Rising demand for steel products has also led to huge investments in the sector as firms position themselves to profit from the increase in local and regional markets. Key success factors: o Ability to achieve economies of scale O Access to distribution channels O Technological progress
CHANNEL OF DISTRIBUTION
Explanation:- Type of Business is trading. Supplier of Products:- Buyers of Product:- - Essar Steel Ltd, Gujarat. - Steel Makers Ltd, Mombasa. o Supplies: -Iron/Steel Coils - Chuma Sales Ltd, Mombasa. o -Iron/Steel Sheets - Kenya United Steel Co Ltd, - Tata Steel Ltd, Jamshedpur. Nairobi. o Supplies:- Deformed Iron/Steel Bars - Rioco Steel Fabricator Ltd, - Jindal Steel and Power Ltd, Raigarh.Nairobi. o Supplies:- -Iron/Steel Pipes - Steel Structures Ltd, Mombasa. - Venus Metal Ltd, Nairobi.
Financial Analysis
Capital Investment Working Capital Costs: Costs • Raw material • Land & Estimated - Iron/Steel Coils building Cost - Iron/Steel Sheets • Warehousing - Deformed Iron • Plant & - Steel Bars Machinery - Iron/Steel Pipes • Other Other Expenses equipment
• Export – Import License • Office and stationary exp. • Insurance, Rent, Salaries etc…
Financial Service Sector Summery
Enrollment No Students Name Faculty Guide 117340592078 YOGENDRASINH ASHOKSINH JADEJA 117340592081 JATIN RAJESHBHAI VYAS 117340592084 JAYDEEP ASHVINKUMAR PAREKH Prof. Priyanka Mehta 117340592088 KRUPALI NALINKANT DAVADA 117340592089 PRADIP PRAVINBHAI BORICHA 117340592091 SHRENIK TARUNKUMAR MEHTA
FUND RAISING CAPACITY OF THE KENYAN MARKET
o Over the last 15 years, the capital market has raised over Kshs 1.3 trillion (BP8.6 billion) through bonds and equities issuances; o Kshs 500 billion (BP3.3 billion ) has been raised in the last 3 years notwithstanding the effects of global financial crisis in 2008/09; o The value of listed securities (debt and equity) currently at Kshs 1.7 trillion (BP11 billion), nearly 50% of Kenya's GDP o In the course of 2010 – 2012 Kshs. 32 Billion (BP 240 million) raised in the capital markets from IPOs, Rights Issues & Public Offers
ONGOING CAPITAL MARKETS REFORMS IN KENYA
The implementation of bond market reforms to introduce Hybrid OTC trading of Bonds The implementation of the demutualization of the Nairobi Securities Exchange The modernization of market infrastructure with an Automated Trading System (Equities since 2006 and Debt since 2009) and a robust Central Securities Depository (CDSC) since 2004 The introduction of legal and regulatory framework in line with IOSCO Principles and international best practices Ongoing implementation of Risk Based Supervision by the Capital Markets Authority CMA is a full signatory of the IOSCO Multilateral MoU on Enforcement Cooperation to effectively combat cross border market misconduct. Ongoing roll out of Derivatives/Commodities Futures Exchange expected within 2012 in line with the Authority's goal of providing more financial products to facilitate growth in our economy Nairobi Securities Exchange top Counters now included in FTSE Country index improving international visibility and liquidity. The introduction of Real Estate Investment Trust vehicles including a country specific framework for collective investment for development of real estate.
OPPORTUNITIES FOR INVESTMENT IN KENYA Foreign investors entitled to own up to 75% of a listed company Kenya, through the Vision 2030, is geared to become an international financial centre Kenya's deepening of the bond market provides opportunities for: a) Structured of debt (ABS, Covered Bonds, Convertible Bonds), b) Arrangers and Placing Agents (including securitization agents), c) Credit Rating, d) Credit Enhancement Services Opportunities to introduce new Trading Platforms Strong opportunities for Private Equity and Venture Capital in thriving ICT and Energy Sectors with exits provided through listing on the Growth and Enterprise Market Segment, The establishment of Futures Exchange, commodities markets and metal and minerals exchange in Kenya will provide opportunities for: a) Commodity Pool Operators b) Futures trading advisors c) Intermediaries (Trading Members, Trading cum Clearing Members; Integrated Clearing members, Institutional Clearing members) d) Warehouses and warehouse receipting systems Latent potential for Islamic Financing offering products such as Sukuks and Sharia compliant Mutual Funds Establishment of Carbon Credit Market to further deepen our markets
Nairobi Stock Exchange (NSE)
In Kenya, dealing in shares and stocks started in the 1920's when the country was still a British colony. However the market was not formal as there did not exist any rules and regulations to govern stock broking activities. Trading took place on a ‘gentleman's agreement.’ Standard commissions were charged with clients being obligated to honor their contractual commitments of making good delivery, and settling relevant costs. At that time, stock broking was a sideline business conducted by accountants, auctioneers, estate agents and lawyers who met to exchange prices over a cup of coffee. Because these firms were engaged in other areas of specialization, the need for association did not arise.
In 1951, an Estate Agent by the name of Francis Drummond established the first professional stock broking firm. He also approached the then Finance Minister of Kenya, Sir Ernest Vasey and impressed upon him the idea of setting up a stock exchange in East Africa. The two approached London Stock Exchange officials in July of 1953 and the London officials accepted to recognize the setting up of the Nairobi Stock Exchange as an overseas stock exchange.
CENTRAL BANK OF KENYA (CBK) The Central Bank of Kenya (CBK), whose objectives are laid down in the Central Bank of Kenya (Amendment) Act of 1996, is charged with the formulation and implementation of monetary policy directed at achieving and maintaining stability in the general level of prices. CBK also fosters the liquidity and proper function of a stable market-based financial system.
Additionally, CBK formulates and implements foreign exchange policy and holds and manages foreign exchange reserves; licenses and supervises authorized dealers in the money market; promotes the smooth operation of payments, clearing and settlement systems; acts as a banker and adviser to, and as fiscal agent of the government; and issues currency notes and coins. CBK publications include Monthly Economic Review, Central Bank of Kenya Quarterly Report, Central Bank of Kenya Annual Report, and Central Bank of Kenya Economic Report.
Objectives The Central Bank of Kenya's objectives are laid down in the Central Bank of Kenya (Amendment) Act, 1996 as follows: Principal Objectives 1. The first principal objective shall be to formulate and implement monetary policy directed to achieving and maintaining stability in the general level of prices 2. The second principal objective shall be to foster the liquidity, solvency and proper functioning of a stable market based financial system
Secondary Objectives Without prejudice to the generality of the above two principal objectives, the Bank's secondary objectives shall be to: 1. Formulate and implement foreign exchange policy 2. Hold and manage its foreign exchange reserves 3. License and supervise authorized dealers in the money market 4. Promote the smooth operation of payments, clearing and settlement systems 5. Act as a banker and adviser to, and as fiscal agent of the Government; and 6. Issue currency notes and coins Legislation Legislation (or "statutory law") is law which has been promulgated (or "enacted") by a legislature or other governing body. Before an item of legislation becomes law it may be known as a bill, and may be broadly referred to as "legislation" while it remains under consideration to distinguish it from other business. The Central Bank of Kenya is in various ways guided by the following pieces of legislation: Constitution of Kenya 2010 Central Bank of Kenya Act (Chapter 491) 1st January, 2013 Banking Act (Chapter 488) 1st January, 2013
Microfinance Act (2006) The National Payment System Act (2011)
Energy Sector Summary
Enrollment Students Name Faculty Guide No. 117340592096 SUDHIR MADHUSUDANBHAI LOLARIYA 117340592098 VINAY MAHESHBHAI JOGADIA 117340592102 HARDIK KANIYALAL JOSHI Prof. Chhavi Manra 117340592104 MUSHTANSHIR LAKSHMIDHAR 117340592105 NOORUDIN ABDULLAH BOHRA 117340592106 MANISH KISHORBHAI GOHEL
Energy Sector Summary In INDIA: In India the first demonstration of electric light in Calcutta was conducted on 24th July 1879 by P.W.Fleury & Co. On 7th January 1897, Kilburn & Co. secured the Calcutta electric lighting license as agents of the Indian Electric Co, which was registered in London on 15th January 1897. A month later, the company was renamed the Calcutta Electric Supply Corporation. And the control of the company was transferred from London to Calcutta only in 1970. Enthused by the success of electricity in Calcutta, power was thereafter introduced in Bombay. Mumbai saw electric lighting demonstration for the first time in 1882 at Crawford Market, and Bombay Electric Supply & Tramways Company. Set up a generating station in 1905 to provide electricity for the tramway. The first hydroelectric installation in India was installed near a tea estate at Sidrapong for the Darjeeling Municipality in 1897. The first electronic train ran between Bombay’s Victoria Terminus and Kurla along the Harbour Line, in 1925. In 1931, electrification of the meter gauge track between Madras Beach and Tambaram was started. India’s energy requirements have grown significantly since market reforms were initiated by government of India in the 1990s. energy sector reforms, capacity addition and improvement in existing infrastructure are the government’s primary focus area as energy is a key necessity for meeting the country’s high economic growth expectations. The energy scenario in the country and highlights the opportunities that have arisen in the power, oil and gas, and equipment manufacturing industries as a result of growing demand. The energy sector in India had an installed capacity of 214.630 GW as of February 2013. The world’s fifth largest. Captive power plants generate an additional 31.5 GW. Non Renewable Power Plants constitute 87.55% of the installed capacity and 12.45% of Renewable Capacity. India generated 855 BU (855000 MU i.e. 855 TWh) electricity during 2011-12 fiscal. In terms of fuel, coal-fired plants account for 57% of India’s installed electricity capacity, compared to South Africa’s 92%, China’s 77% and Australia’s 76%. After coal, renewal hydropower accounts for 19%, renewable energy for 12% and natural gas for about 9%. The different energy power generated plants are both the renewable and the non- renewable energy power plants: - Thermal Power - Fuel constraints - Hydro Power
- Nuclear Power - Solar Power - Wind Power - Bio-mass Power - Geothermal Energy - The wave Energy.
IN KENYA: Seyyied Bargash, the sultan of Zanzibar, acquires a generator o light his palace and nearby streets in 1875. Then the harrali Esmailjee Jeevanjee, a wealthy merchant in Mombasa, acquires the generator and transfers it to the Mombasa Electric Power and Lightning Company in 1908. And also an engineer, Mr. clement Hertzel, is granted the exculsive right to supply electricity to the then district and town of Nairobi. This leads to the formation of the Nairobi Power and Lightning Syndicate. There are three main sources of energy in Kenya and it accounts the percentage of energy: - Wood fuel (70%) - Petroleum (21%) - Electricity (9%) The renewable energy is also becoming important although it remains insignificant in the country’s overall energy mix. The major sources of electricity are Hydro, Geothermal and Thermal Power. The installed power capacity, in June 2005, was 1155.0MW. the breakdown was: Hydropower at 677.3 MW, Oil thermal Power at 344.2 MW, Geothermal power at 128 MW, and wind power at 0.4 MW. The effective capacity was 1066.9 MW. The key players in the power sector are Kenya Power and Lightning Company (KPLC), Kenya Electricity Generating Company Limited (KENGEN), Energy Regulatory Board (ERB), Ministry of Energy (MOE), and independent power producers (IPPs). KPLC is 48.4 per cent government-owned and is the only licensed public electricity transmitter and distributor. The generation of electricity in Kenya has several players, chief among them being the state- owned KENGEN, and three IPPs. KPLC has power purchase contracts with KENGEN and the IPPs. KENGEN accounts for more than 82 per cent of the country’s total installed generation capacity. The Government of Kenya faces several challenges in improving electricity generation and distribution to meet increasing industrial and residential demand. Some of the major challenges include:
- Connecting a minimum of 150,000 new consumers per year to the electricity grid, including expansion of the Rural Electrification Program.
- Reducing the cost of electricity in Kenya, which is higher than costs of regional economic competitors in South Africa and Egypt.
- Investing in upgrading of the national electricity grid to provide constant high quality power especially to industrial consumers.
- High consumer tariffs due to operational inefficiencies and high taxes (eg VAT. at 16 per cent).
Biomass fuels
Wood fuel has remained the most important source of energy in Kenya, meeting over 70 per cent of the country’s total energy consumption needs. Eighty per cent of the population depend on it. (Mugo and Kituyi, 2002). It provides 90 per cent of rural households’ energy requirements and 85 per cent in urban areas.
This state of affairs has major implications on sustainable development. Unsustainable harvesting, given the lack of efforts in reforestation and on-farm planting of wood lots, has often led to soil degradation, deforestation and associated diseases. According to the Poverty Reduction Strategy Paper for Kenya for the period 2001-2004, demand for wood fuel outstripped supply, and the country was likely to have faced a wood fuel deficit of 4.1 million tonnes in 2005.
Renewable energy resources
Renewable energy resources include solar energy, windmills, power alcohol and biogas. Programmers for their increased use have been formulated and are intended to supplement and conserve, where appropriate, other major sources of energy. Since they are renewable, these sources of energy have the potential to contribute to social, economic and environmental dimensions of sustainable development. Other potential sources of energy in Kenya are nuclear power and natural gas. The contribution of renewable energy sources (other than biomass) to the overall energy supply is minuscule. However, with concerted efforts, renewable energy may be significant in the years ahead
The Energy Policy in Kenya has evolved through sessional papers, regulations and Acts of Parliament. The landmark policy paper that set the basis for development of the country dwelt on the Electric Power Act (CAP 314) that had been used to regulate the sector. Which was another landmark policy blueprint, however did not focus much on the power sector. Instead, it called for the establishment of the Department of Price and Monopoly Control (DPMC) within MOF to monitor acts of restraint of trade and to enforce pricing in the various sectors including petroleum. The next significant legislative development came in 1997. The Electric Power Act of 1997 was legislated to replace CAP 314 and take on bor, functions that were at the time being carried out by KPLC. Consequently, KENGEN was established in 1998. The Electric Power Act 1997 also provided for rural electrification on a limited scale using renewable energy technology
Important Indicators Energy Indicators (2012) (Source: - kwes2012.pdf) Countr Populatio GDP GDP(PP Energy Net TPES Elect. y n (billionP) Production imports (Mtoe) Cons. (million)USD) (billion(Mtoe) (Mtoe) (TWh) USD) Kenya 40.51 23.45 60.01 15.78 4.28 19.56 6.32
India 1170.94 1246.7 3762.86 518.67 181.44 692.69 754.61 3
Energy Indicators (2011) (source: - kwes2011.pdf) Countr Populatio GDP GDP(PP Energy Net TPES Elect. y n (billionP) Production imports (Mtoe) Cons. (million)USD) (billion(Mtoe) (Mtoe) (TWh) USD) Kenya 39.80 17.99 44.88 15.57 3.55 18.72 5.82
India 1155.35 874.94 4566.96 502.47 181.97 675.83 689.54
Energy Indicators (2010) (source:- kwes2010.pdf)
Countr Populatio GDP GDP(PP Energy Net TPES Elect. y n (billionP) Production imports (Mtoe) Cons. (million)USD) (billion(Mtoe) (Mtoe) (TWh) USD) Kenya 38.53 17.87 44.59 15.11 3.50 18.02 6.02
India 1139.97 825.77 4310.30 468.31 157.89 620.97 645.25
Electricity generation in Kenya
Electricity Generation by source (GWh) (source:- Kenyafacts2012.pdf ) 2008 2009 2010 2011 Hydro 3267.0 2160.0 3224.0 3217.2 Thermal oil 2145.4 2997.0 2201.0 2800.5 Geo thermal 1039.0 1293.0 1442.0 1443.7 Cogeneration 4.0 50.0 92.0 80.9 Wind 0.2 7.2 16.8 17.6 Imports 25.0 39.0 30.0 33.9
Total 6480.6 6546.2 7005.8 7593.8
Electricity Consumption (Million KWh) (source:- Kenyafacts2012.pdf) 2008 2009 2010 2011 Domestic and 2000.8 2058.1 2169.3 2433.9 Small Commercial Large & 3019.8 3058.1 3204.9 3440.3 Medium (Commercial and Industrial) Off-peak 66.2 36.8 69.2 75.4 Street Lighting 26.3 21.3 20.5 17.9 Rural 239.1 254.4 290.8 306.1 Electrification Total Domestic 5352.2 5428.7 5754.7 6273.6
Energy Sector
The energy sector in Kenya is largely dominated by petroleum and electricity, with wood fuel providing the basic energy needs of the rural communities, urban poor, and the informal sector. An analysis of the national energy shows heavy dependency on wood fuel and other biomass that account for 68% of the total energy consumption (petroleum 22%, electricity 9%, others account for 1%). Electricity access in Kenya is low despite the government’s ambitious target to increase electricity connectivity from the current 15% to at least 65% by the year 2022.
Kenya has an installed capacity of 1.48 GW. Whilst about 57% is hydro power, about 32% is thermal and the rest comprises geothermal and emergency thermal power. Solar PV and Wind power play a minor role contributing less than 1%. However, hydropower has ranged from 38-76% of the generation mix due to poor rainfall. Thermal energy sources have been used to make up for these shortfalls, varying between 16-33% of the mix.
Kenya’s current effective installed (grid connected) electricity capacity is 1,429 MW. Electricity supply is predominantly sourced from hydro and fossil fuel (thermal) sources. This generation energy mix comprises 52.1% from hydro, 32.5% from fossil fuels, 13.2% from geothermal, 1.8% from bagasse cogeneration and 0.4% from wind, respectively. Current electricity demand is 1,191 MW and is projected to grow to about 2,500MW by 2015 and 15,000 MW by 2030. To meet this demand, Kenya’s installed capacity should increase gradually to 19,200 MW by 2030. Due to increased poverty, there is a significant shift to non- traded traditional biomass fuels. The proportion of households consuming biomass has risen to 83% from 73% in 1980.
Charcoal, firewood, paraffin, and LPG continue to be the main sources of cooking fuel. At the national level 68.8% of the households use firewood as the main cooking fuel. Almost 90% of the rural population is dependant on firewood for cooking and heating, whilst in urban areas approximately 10% of the population use firewood. Firewood is increasingly supplied from private smallholder lands and farm woodlots. Charcoal, on the other hand, is mainly an urban fuel, 82% of urban households depend on it as part of their energy mix, compared to 34% of households using charcoal in rural areas. It is estimated that Kenyans now consume 2.4 million tons of charcoal each year. One set of biomass users includes educational
institutions (primary and secondary schools, as well as colleges). Of Kenya’s 20,000 educational institutions, about 90% use wood fuel to prepare meals.
Households in Kenya source their energy for lighting as follows: . Electricity - about 15% of the national populace . Use of electricity in urban areas as the source of lighting - 42%, although kerosene lamps still remain the main source of lighting for 55% of households. . Kerosene for lighting in rural households - 87% Many are engaged in production, transformation, transportation and sale of wood and charcoal, making it one of the most important sources of paid livelihood. As a result woody biomass is diminishing due to poor management and utilization in unsustainable ways. Government ministries are supporting in one way or the other the sustainable production of energy crops, trade of charcoal and the dissemination of improved cooking stoves. As of 2007, the contribution of the energy sector to the overall tax revenue was about 20%, equivalent to 4% of GDP. The sector provides direct and indirect employment to an estimated 16,000 persons. It costs approximately Ksh 35,000 (EUR 318.18) to connect to the national grid and about 0.1145 EUR equivalents per kWh of electricity service. These are relatively high costs that pose a major obstacle to the expansion of electricity connections to low-income households and small businesses, which can therefore benefit from decentralized alternative sources of energy, such as solar. Problem & Situation Fuelwood demand in the country is 35 million tons per year while its supply is 15 million tons per year, representing a deficit of 20 million tons. The massive deficit in fuelwood supply has led to high rates of deforestation in both exotic and indigenous vegetation resulting to adverse environmental effects such as desertification, land degradation, droughts and famine among others. It is in an effort to reduce these problems that PSDA through collaboration with other Development Partners initiated “Promotion of Improved Energy Stoves” in January 2006. Nevertheless, a high population share still uses firewood for cooking – more than 80% of the population use traditional three stones technology for the same. In the first phase of the EnDev programme, GTZ disseminated a significant amount of improved cook stoves (ICS). In addition GTZ promoted the uptake of ICSs by institutions. However, many people without improved stoves still do not know where to get them although they express desire to acquire them. Current improved stove production centres do not meet the demands of the new project areas, especially in the arid and semi-arid regions which need them more than any other regions in the country. This has largely contributed to unsustainable
harvesting of biomass with negative impacts on the environment and poor health among users due to excessive inhalation of noxious gases. Up-scaling of improved cook stoves is therefore necessary.
Energy I. Renewable Energy a. Biomass b. Hydropower c. Solar Energy d. Wind Energy e. Geothermal Energy
II. Fossil Fuels a. LPG b. Coal As above all are understood as under briefly. I. Renewable Energy: Renewable energy is energy that comes from resources which are continually replenished such as sunlight wind, rain, tides, waves, and geothermal heat. a. Biomass: Biomass comes from various forest formations such as closed forests, woodlands, bush lands, wooded grasslands, farms with natural vegetation and mixtures of native and exotic trees, industrial and fuel wood plantations, and residues from agricultural crops and wood-based industries. These sources contribute to Kenya's national biomass resource as follows: o Indigenous vegetation mainly from closed forests, woodlands, bush lands and wooded grasslands – 16 million m3 o Farmlands consisting of exotic tree species such as grevillea, eucalyptus and remnant natural vegetation – 14 million m3 o Plantations, mainly of eucalyptus –2 million m3 and o Residues from agriculture and wood based industries – 3 million m3 b. Hydropower: Hydropower is the single largest generation source for grid electricity in Kenya providing some 677 MW of the total installed grid capacity. As of 2007, a 60 MW hydro generation plant was being developed on the Sondu Miriu with a further 20 MW planned for 2008. With the exception of Turkwell Gorge (Rift Valley) and Sondu Miriu (Lake Victoria) some 470 MW or 70% of the total developed hydro capacity lies on the Tana River alone, a conspicuous over reliance.
c. Solar Energy: Solar energy is the radiant light and heat from the sun that has been harnessed by humans since ancient times using a range of ever-evolving technologies. Solar radiation along with secondary solar resources account for most of the available renewable energy on earth. Only a minuscule fraction of the available solar energy is used. Solar energy can be applied to: o Generate Electricity o Heating and Cooling o Cooking o Water Desalination
d. Wind Energy: Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electrical power, windmills for mechanical power, wind pumps for water pumping or drainage, or sails to propel ships. The Equatorial areas are assumed to have poor to medium wind resource. This could be a general pattern for Kenya. However, some topography specifics (channelling and hill effects due to the presence of the Rift Valley and various mountain and highland areas) have endowed Kenya with some excellent wind regime areas e. Geothermal Energy: Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. Kenya is endowed with geothermal resources mainly located in the Rift Valley. Electricity demand in Kenya has continued to grow steadily over the years and has caused great pressure on the conventional sources of energy like hydropower, which is normally affected by weather changes. It is estimated conservatively that the Kenya Rift has a potential of greater than 2000 MW of geothermal Power.
II. Fossil Fuels Petroleum is Kenya’s major source of commercial energy and has, over the years, accounted for about 80% of the country’s commercial energy requirements. In 2006, 4.4 million cubic meters in petroleum products were sold in Kenya. Of this 420,000 m3 was kerosene and 68,000 m3 was LPG. Total petroleum consumption in Kenya has grown from 2.6 million cubic meters in 2003 to 3.73 million cubic meters in 2006. The consumption maintains an upward trend. As of 2009, demand for petroleum products was 3,656 thousand tonnes. As of 2007, Kenya had one refinery, the Mombassa refinery, with a nameplate capacity of 90,000 barrels per day. Since its commission the refinery has not operated at full capacity.
As of 2007 there were 4 prospective petroleum basins in Kenya, about 30 exploration wells had been drilled and although none has encountered a commercial discovery, a number of drill stem tests have recovered or tested gas. In 2012 significant oil resrves were discovered in North Western Kenya. Studies are still being carried out to establish the economic feasibility. Statically data can see as under.
a) Liquid Petroleum Gas: Consumption of LPG has increased by about 59% between 2003-2008 from 40,000 to 80,000 metric tons/year. The Kenya Petroleum Refinery makes about 30, 000 metric tons of LPG and to balance growing demand reliance on imported LPG has increased. However, there are plans underway to upgrade the refinery to make 115,000 metric tons of LPG.
b) Coal: The Ministry of Energy has identified two areas with possible commercially exploitable quantities of coal. These are the Mui basin of Kitui and Mwingi Districts and Taru basin of Kwale and Kilifi Districts. As of 2007, 10 wells have been drilled in Mui basin with encouraging results indicating possible existence of commercial quantities of coal.
Companies in Kenya
1) ner y companies of Kenya 1. Oil companies of Kenya o Kenya Pipeline Company o National Oil Corporation of Kenya
2. Power companies of Kenya o Kenya Electricity Generating Company o Kenya Power and Lighting Company
2) ectric po er in Kenya 1. Power companies of Kenya o Kenya Electricity Generating Company o Kenya Power and Lighting Company 2. Electric power infrastructure in Kenya Renewable energy power stations in Kenya a. Geothermal power stations in Kenya o Olkaria o Olkaria I Geothermal Power Plant o Olkaria II Geothermal Power Plant b. Hydroelectric power stations in Kenya o Gitaru Hydroelectric Power Station o Kamburu Hydroelectric Power Station o Kiambere Hydroelectric Power Station o Turkwel Hydroelectric Power Station
3. Geothermal power in Kenya o Olkaria o Olkaria I Geothermal Power Plant o Olkaria II Geothermal Power Plant
Hydroelectricity in Kenya o Gitaru Hydroelectric Power Station o Kamburu Hydroelectric Power Station o Kiambere Hydroelectric Power Station o Turkwel Hydroelectric Power Station
3) ossi fue s in Kenya Petroleum in Kenya Oil companies of Kenya o Kenya Pipeline Company o National Oil Corporation of Kenya
4) Energy infrastructure in Kenya
Electric power infrastructure in Kenya Power stations in Kenya Renewable energy power stations in Kenya a. Geothermal power stations in Kenya o Olkaria o Olkaria I Geothermal Power Plant o Olkaria II Geothermal Power Plant b. Hydroelectric power stations in Kenya o Gitaru Hydroelectric Power Station o Kamburu Hydroelectric Power Station o Kiambere Hydroelectric Power Station o Turkwel Hydroelectric Power Station
5) Nuclear energy in Kenya
6) ene a e ener y in Kenya
1. Geothermal power in Kenya Geothermal power stations in Kenya o Olkaria o Olkaria I Geothermal Power Plant o Olkaria II Geothermal Power Plant
2. Hydroelectricity in Kenya o Gitaru Hydroelectric Power Station o Kamburu Hydroelectric Power Station o Kiambere Hydroelectric Power Station o Turkwel Hydroelectric Power Station
3. Renewable energy power stations in Kenya
a. Geothermal power stations in Kenya Olkaria Olkaria I Geothermal Power Plant Olkaria II Geothermal Power Plant
b. Hydroelectric power stations in Kenya Gitaru Hydroelectric Power Station Kamburu Hydroelectric Power Station Kiambere Hydroelectric Power Station Turkwel Hydroelectric Power Station c) Policy Framework, Laws and Regulations The energy policy for Kenya was formulated in 2004, but recently high oil prices and need for energy security have become more urgent drivers for alternative energy. This may call for re-assessment and update of the policy and strategy. For Kenya, high oil prices and the need to increase overall energy per capita supply are strong motivators for development of alternative forms of energy. Transportation fuels remain the most emotive of all energy segments, especially when prices are going up, as this is where lifestyles and livelihoods are visibly impacted. Alternative energy is not only focusing on economics alone, but also looks at security of supply and other social economic benefits to the country. A number of options are being considered:
o The proposed grass-root Garsen sugar project ( bio-ethanol) o The government and stakeholders are planning to introduce bio-diesel for both rural energy use and for blending into automotive diesel. o Expansion of the geothermal power supply o Exploration of the coal deposits in Mui basin of Kitui and Mwingi districts.
Up until the 7th of October 2004, when the Sessional Paper No. 4 was passed in parliament, Kenya operated without a comprehensive energy policy. Three key legislations that have been in application all addressing the commercial energy sub sector: o Electrical Power Act of 1997 currently under review o Petroleum Act Cap 116 – regulates importation, transportation and storage o Petroleum Exploration and Production Act – prior to the deregulation of the petroleum sub-sector, this was the legislation that the government used to control pricing of petroleum products. In addition to these, there are other legislations relevant to operations within the energy sector: o Licensing Act – for licensing of operators in for instance in the petroleum and electricity sectors o Standards Act o Environment management and coordination Act o Local Government Act o Physical Planning Act o Weights and measures Act o Monopolies Act The relevant policy and legal framework for solar energy in Kenya includes:
o Sessional Paper No. 4 on Energy of Kenya o Energy Act 2006 o Kenya rural electrification master plan o Kenya Vision 2030 o The Kenya National Climate Change Response Strategy
The new Energy Act 2006, sets out the National Policies and Strategies for short to long-term energy development. Whether or not it is adequate to fulfil Kenya’s vision of emerging as a newly industrialized country by 2020 remains to be seen. Strong regulatory and legislative frameworks are required to manage the activities required to achieve this vision. The Energy Regulatory Commission shorter name is ERC was established as an Energy Sector Regulator under the Energy Act of 2006 in July 2007. ERC is a single sector regulatory agency, with responsibility for economic and technical regulation of electric power, renewable energy, and downstream petroleum sub-sectors, including tariff setting and review, licensing, enforcement, dispute settlement.
The broad objective of the new Energy Policy is to ensure the provision of adequate, quality, cost-effective, affordable supply of energy while ascertaining environmental conservation.
Kenya does not provide incentives or subsidies for household solar PV systems. Although some strides have been made to improve energy efficiency and renewable energy in Kenya by the government, some planned reforms in the Energy Act are yet to be effected. These include: o Establishment of a Centre of Excellence for Energy Efficiency and Conservation o Establishment of energy and equipment testing laboratories o Development of standards and codes of practice on cost-effective energy use
Stockholm Environment Institute (SEI) conducted a study on the economic impacts of climate change in Kenya in 2009 and found that the country’s greenhouse gas emissions are rising quickly. The energy sector emissions are estimated to have increased by as much as 50% over the last decade. As such, Kenya’s Climate Change Response Strategy is keen to reduce these impacts through various avenues including promoting use of environmentally friendly energy.
Identified Key Challenges The policy has identified a number of key challenges these include o Upgrading and expanding the current energy infrastructure o Promoting energy efficiency and conservation o Protection of environment o Mobilizing requisite financial resources o Ensuring security of supply through diversification of sources and mixes in a cost effective manner (not substitution – which is unrealistic) o Increasing accessibility of energy services - not only electricity - to all segments of the population o Institutional corporate governance and accountability o Enhancing legal regulatory and institutional frameworks to create consumer and investor confidence o Enhancing and achieving economic competitiveness o Effectively mainstreaming the rural energy issues – framework unclear on how rural energy will be addressed. Rural energy suffers low priority and status in both planning and development resource allocation.
o Disproportionate promotion of fossil fuels and grid electricity
The New Energy Policy The New Energy Policy is as a result of the Government recognizing that the energy sector plays a key role in the achievement of GoK’s socio-economic strategies. It lays the policy framework for the provision of cost-effective, affordable and adequate quality energy services on a sustainable basis. Some of the key policy proposals are: Legal and Regulatory Framework o The enactment of an Energy Agency (EA) to facilitate prudential regulation, enhance stakeholder interests and boost investor confidence. It will consolidate EPA, 97 and the Petroleum Act Cap 116; and bring under its purview the other energy sources not currently covered by other legislations. o Establishing a single independent energy regulator. Institutional Arrangements
o Creation of a Rural Electrification Authority to accelerate rural electrification o Promotion of privately or community owned energy service entities operating renewable energy power plants /hybrid systems o Establishment of a state owned Geothermal Development Co. to undertake geothermal resource assessment and development and to sell steam to generating entities Energy Trading Arrangements o Creation of a domestic power pool with provision for wholesale and retail market to create competition and hence reduce cost of electricity7 o Streamlining biomass energy trading arrangements o Increasing lifeline tariff to recover the cost of electricity generation o Divestiture of GoK from oil refining, marketing and transportation in favour of private sector investments in the same Energy Security o Financing of 90-day-demand strategic petroleum stocks by GoK and the private sector o Encouraging wider adoption and use of renewable energy technologies to enhance their role in the energy supply matrix o Formulation of plans for biomass energy development o Development of a national energy research agenda
The Energy Act 2006 is a consolidation of the Electric Power Act and the Petroleum Act 2000, and has a section on petroleum and a section on electricity. The energy policy already recognizes the biomass sector and how biomass regulation should be done in terms of pricing and sets a good basis for drafting the biomass plan. It also recognizes the importance of renewable energy and energy efficiency.
Institution in Energy sector in Kenya
Tourism Sector Summery
Enrollment no Students Name Faculty Guide 117340592108 ANKITA DIPAK MALKAN 117340592109 PRATIK VIRENDRABHAI RAGHANI 117340592110 VIVEK PANKAJKUMAR DAVE Prof. Meeta Mandaviya 117340592115 NEMISH PANKAJBHAI SHAH 117340592116 SWATI DAYALAL DHOKIYA 117340592117 ASHISH NARENDRABHAI ADROJA
Tourism Sector Summary
Between 1963 and 1980, tourism was one of the top three domestic exports of Kenya, along with coffee and tea. In evaluating an export industry, its linkages with other sectors of the economy, its import content, and its role as a source of domestic income and employment should be considered. This paper attempts such an evaluation of Kenya's tourist industry. Between 1968 and 1976, linkages between the tourism sector and domestic agriculture and food processing were improved. The tourist industry was not particularly import intensive in terms of intermediate goods when compared to the economy as a whole. Employment in and wages paid by the tourist industry were below what is expected when compared to tourism's share of GDP. Kenya Tourism Industry boasts of unparalleled services and travel facilities as per the International standards. Kenya tourism industry is the prime revenue earner and plays an important role in the economic development of Kenya. As Kenya boasts of picturesque beaches and varied wildlife, an individual travelling to Kenya can experience the best of both worlds-land and sea. Kenya tourism industry is always working on the travel policies and strategies to better the tourism standards. Infrastructure coupled with love for wildlife has prompted Kenyan tourism to move ahead. Kenya tourism industry offers tourism services in harmony with other tourism related industries to suit the needs of every individual. Tourism plays a hugely significant role in Kenya’s economy, contributing to approximately 25% of Kenya’s Gross Domestic Product (GDP). Wildlife tourism to Kenya’s numerous National Parks and Reserves represents a substantial part of this, with around 70% of tourism revenue in Kenya coming from wildlife tourism. Kenya's tourist attractions range from safaris through game parks to beautiful beaches on the coast. Until 1969, tourism development had focused on Nairobi's hotels and on its game parks. Subsequently, coastal tourism received increasing attention, and tie-ins between Game Park and beach stays became more common, attracting visitors from East Africa and from overseas. Kenya's coasts offer intriguing cultural and historical surroundings including picturesque old Arab towns and the ruins of sixteenth-century Portuguese settlements. There are ideal conditions for SCUBA diving and game fishing together with 150 miles of unspoiled beaches protected from sharks by the great coral barrier reef. New cottage-style hotels draw on local architectural styles and decor and offer an international standard of luxury. Most visitors to Kenya, however, continue to come primarily to see its varied wildlife, in particular, the world's largest concentrations of elephant, giraffe, antelope, and zebra. Though hunting safaris have declined since their colonial heyday, restricted game hunting continues to draw
enthusiasts. Kenya has an outstanding record among African countries in the protection and development of game parks and lodges. Tourism has a long-standing tradition in Kenya, and in fact was more well developed there than in any other East African country before independence. After independence, tourism was the fastest growing sector of the nation's economy. Only coffee and tea production brought in more foreign exchange. Income from tourism first exceeded that from coffee in 1989, when a record 730,000 tourists brought in KSh 6,986 million. Between 1990 and 1993, 3.23 million foreign visitors came to Kenya, representing about 5% of the tourist Kenya earned Sh38.7 billion from tourism in the last six months, an increase of 6.4% as compared to Sh36.4 billion in the same period last year. Tourism minister Danson Mwazo who released the half year tourism performance in Mombasa this week attributed the minimum growth to reduction of arrivals and controlled spending by travelers. The tourism minister said Europe remained the main source market for the Kenyan tourism industry with a share of 44%. Africa came second with 25%, America 14 per cent and Asia 11% with holiday being the main purpose of visits as compared to business. Despite the United States remaining the most consistent market in share terms, The United Kingdom has maintained the top position in share arrivals both by air and sea.US came second followed by Italy, India then Germany marking the top five markets for Kenya. South Africa topped as the regional market with 19,236 visitors followed by Uganda and Tanzania. However Uganda posed a declined compared to last year. In Asia, India recorded the highest visitors into the country contributing 29,202 arrivals, followed by China, then the Middle East. Mwazo said South Africa and India are the only countries that have shown positive trends. Brazil, Russia and China have declined. "Travel advisories by the key source markets such as UK, France and USA contributed to a slight decline on the number of arrivals. Insecurity in the coast of Somali led to a decrease in the number of cruise ships and cancelation of chatter flights also had a negative impact," said Mwazo. He said presidential elections in some countries such as France and delayed holiday bookings due to the uncertainty which surrounded Kenya's general elections also affected the number of tourists who visited the country in the first half year. He however said the market is expected to improve for the remaining months of the year following the review of USA travel advisory, new flights such as the Korea Air, Etihad airways, Royal Jordanian and the introduction of new routes by Kenya Airways. The minister also noted that Hotels in Nairobi are doing better than Mombasa in terms of facilities and innovation. He urged hotel managements at the coast to renovate their facilities and adopt unique styles to attract different clients. "Prospects remain positive and we expect a
tremendous growth in our industry. Hotels need to rediscover themselves and adopt uniqueness. We all need to work on our facilities and capitalize on the market," said Mwazo. He said the government will ensure the country remains a safe holiday destination and has increased the Kenya Tourism Board kitty for expansive marketing of the country's tourism industry internationally.
Status of Kenya tourism industry in the global market: It is assumed that tourism in Kenya in the year 2007 will yield as much as $3842.2 million. Kenya tourism industry generates employment opportunities for many. An estimated 509000 job openings are expected to be open up for many in the year 2007. Contribution to the GDP is expected to be 11.6%. It is reckoned that growth in the Kenya tourism industry will move up by 8.6% in the year 2007. Tourism satellite accounting Kenyan tourism The tourism satellite accounting tool helps in analyzing the effect of travel and tourism in Kenya on the national economy .several factors helps to estimate the profit earned from the Kenya tourism industry. The demand in the Kenya tourism industry activity is ascertained to bring in approximately USD 7060.3 billion in 2007.this amount is expect to grow to USD 13231.6 billion in 2017.growth in the Kenya tourism industry is in estimated to take place at 4.3 annually in 2008 through 2017.
Global position of Kenya tourism industry Kenya tourism industry occupies the 88thpostion in the global tourism industry. Contribution of Kenya tourism industry in the global economy is graded at the 74thpostion. With regards to a ten year growth Kenya travel industry can be stratified at the 140thpostion. India is now Kenya's top source market for imports ahead of its Asian rivals China and the United Arab Emirates, in what is seen as the clearest shift yet by Kenya to the East for international trade. Fresh data from the Kenya National Bureau of Statistics show the value of imports from India opened a clear gap ahead of the two in 2012 - the results of enhanced trade relations between Kenya and India in recent years. Eleven-month data for 2012 published in the Leading Economic Indicators (December) shows the value of imports from India has increased to Sh174.6 billion, way ahead of China's Sh154.7 billion and the UAE's Sh138.2 billion. Kenya is a net importer of capital goods such as petroleum products, machinery and equipment, vehicles and non-food industrial supplies. Imports from India in 2011 amounted to 148.8 billion, second after the UAE's Sh181.4 billion. Those from China were worth Sh144 billion in the same year.
Analysts say India has managed to clinch the lion's share of Kenya's import volumes because of, among others, the prevailing cordial foreign policy between the two countries since Kenya gained independence, relatively cheaper goods, quality, and proximity of its ports to Kenya. The main imports from India include textiles, petroleum products obtained from bituminous minerals (other than crude), medical equipment and drugs, pharmaceuticals, flat- rolled iron and non-alloy steel products, electrical goods, food-processing machinery, special purpose motor vehicles and trucks among others. "There are quite a number of factors why Kenya is importing more from India. For instance, you will realise that many products on sale in Kenyan retail stores - such as textiles (garments) - come from India. They are cheaper and as we know, Kenyan consumers are sensitive to price, making these a top choice," said Tiberius Barasa, the executive director of the Centre for Policy Research, a governance and public policy analysis think-tank. "But we are realising that it's not just about price but also quality that is standing out for Indian imports, and this is something that can definitely be sustained in the near-term. Regional proximity of India also makes it easy to travel to and to transport goods to Kenya," said Barasa. Renewed tensions spark new fears
Kenya suffered from the violence that plagued the country after the 2008 election, crippling the industry for most of the year. Yet, the recovery was swift and growth returned, with pre-crisis levels almost recovered in 2011. Nonetheless, renewed political tensions in 2011 have sparked new fears of further instability and of the country’s relative vulnerability to such tensions. Growth slowed down this year as a result of this and of Europe’s economic strife following the debt crisis affecting many of Kenya’s source markets. The upcoming election in 2013 may bring yet more instability to the country, having a direct negative impact on tourism. Ambitious long term vision
Despite these fears, Kenya has a strong and solid 2030 Vision for the development of different categories, and to achieve strong economic growth. Tourism is a key component of this vision, which has led to the development of a National Tourism Strategy tackling the different aspects of the market: From improving the quality of services and human resources employed in the industry, to increasing substantially the number of tourists visiting Kenya, and boosting domestic tourists. The voting of the new tourism act which was finally enacted in
2011 proved the country’s commitment to tourism, and will bring positive changes to the industry. Increasing supply in travel accommodation
The government’s ambition and commitment are being mirrored by the developments taking place in travel accommodation. As such, Kenya is being targeted for the development of new hotels and many global hotel chains, such as the Radisson, Kaminski and Best Western, which are eyeing Nairobi for future developments. The capital city has become a regional business hub, and key players are looking to tap into the growth of MICE and business tourism in this city, which is still generally undersupplied. But meanwhile, other types of travel accommodation continue to lead in this country, as safaris remain the most sought after activity, and the most appropriate types of accommodation for this purpose are lodges and campsites.
A new airport for kisumu
The Kisumu International Airport was expanded and officially reopened in 2012, with a second phase of developments expected during the forecast period. The new airport can now welcome an increasing number of regional flights as well as international ones, and has earned Kisumu a new place on the tourism map of the country as well. Air transportation remains the preferred method of travelling in and out of the country, and the completion of this airport will further boost the industry. Road transportation infrastructure is also being developed, and yet air will maintain its leading position.
Diversifying the tourism product
Kenya is most renowned for its safari and large number of national parks that are ideal for this type of activity. The majority of tourists coming to the country are likely to plan a safari if this is not their main reason for travelling to Kenya. That said, the National Tourism Strategy is aiming to diversify and introduce new and equally lucrative tourism products like golfing, ecotourism, water sports, and many other activities that are possible in Kenya. This would help extend the length of stay in the country, while targeting different types of tourists. This also accompanies a diversification in source markets, whereby there is a rising number of tourists from BRIC markets, Asia and non-traditional markets, outside of Europe.
Eco-tourism-sustainable tourism in Kenya 1. Other activities developed to take pressure off safari areas. E.g. like climbing, white water rafting, more distance safaris, diving of coral cost, hotels built in west, measures to protect coral reef.
2. Attempts made to preserve Masai way of life. E.g. improved settled housing, controlled flow of visitors to traditional Masai village, water dancing and selling of crafts.
3. Bamburi nature trail near Mombasa – old cement quarry reclaimed, no soil, plants or wildlife – trees panted , insects introduced - -transformed into tropical rain forest , wildlife and tourism facilities added 1000000 visitors per year.
Attraction Activities
Wildlife and game reserves-e.g. The Motorized and walking safaris, maasai mara -Elephants, lions, rhinos
Coast – e.g. Mombasa – white sand Beach holidays and fishing beaches and coral reefs
Stunning scenery – savannahs and Balloon/air safaris plateaus – e.g. The Rift valley
Mt Kenya – Africa’s 2nd highest peak Water sports
Agreeable climate with temperatures over Walking/climbing 20 degrees all years, lots of sunshine
Relatively good roads and rails Cultural tours of local peoples
Advantages of tourism in Kenya 1. Provides a major source of income into Kenya’s economy – 21% of FEE. 2. Provides job – 11% of paid employment comes from tourism. 3. Just under 1 million tourists from Germany, UK, USA provides market for local goods. 4. Helps to protect wild animals and scenery and develops facilities. E.g. Bamburi nature trail near Mombasa. 5. Promotes and understanding of culture. 6. Money is used to provide local schools and healthcares. 7. Tourism has helped to improve other related industry and infrastructure.
Disadvantage of tourism in Kenya
1. Poorly paid, unreliable, seasonal employment in menial jobs. 2. Money goes to big companies not local people. (Only 15% reaches Kenya from traditional tourism) 3. Environment polluted and natural environment spoiled. 4. Conflicts between local people. E.g. Masai mare and Kenya government through exploitation of local culture. 5. Nomadic peoples forced on their land. 6. Local people can be demoralized. 7. Overcrowding of game parks and accommodation. 90% tourist visit south and east. 8. Wild life disturbed. 9. Pressure on resources like fresh water.
Education Sector Summary
Enrollment No Students Name Faculty Guide 117340592119 GANPAT JIVRAJBHAI CHAUHAN 117340592121 MANSI BHUPENDRABHAI NANDANI 117340592123 GAURAV SURESHBHAI KATHRANI Prof. Priyanka Mehta 117340592124 JAY NITESHBHAI MEHTA 117340592125 MAUNIK MAHESHBHAI RANPARA 117340592126 NEHA RAJENDRAKUMAR SONI
Education Sector Summary
Education is widely seen as one of the most promising paths for individuals to realize better, more productive lives and as one of the primary drivers of national economic development. The citizens and the government of Kenya have invested heavily in improving both the access and quality of education, in an effort to realize the promise of education as well as to achieve the education-related Millennium Development Goals and Vision 2030.
The objectives of this review are to help inform the education investment strategy of the Government of Kenya by (1) identifying the key issues facing the education sector, (2) suggesting potential solutions based on lessons learned from rigorous quantitative research, (3) summarizing promising solutions that could be important for education in Kenya but that may not have enough support from rigorous research, and (4) highlighting a subset of proven high-impact and cost-effective policies that could boost the productivity of the education sector.
The potential solutions are based on evidence drawn from rigorous quantitative research, and in particular on randomized evaluations, which provide the most reliable evidence on what works and what does not work in increasing access to quality education.
Key issues
This report summarizes the key issues facing primary, secondary, and vocational education in Kenya. While issues pertaining to early childhood education and tertiary education are also important, we do not include these in this review as there is limited rigorous evidence on the effectiveness of various policy options in these sectors.
Primary Education
While the free primary education (FPE) program has increased access to primary education especially among poorer households, ancillary costs of primary education (such as school uniforms) continue to hinder the educational attainment of many children. In addition, the provision of quality education remains a challenge. This was highlighted by a recent study by Uwezo (2010) which found disappointing levels of learning among primary school children. The continued and consistent dominance of private schools in the KCPE has further raised concerns about the rising disparity in quality between public and private schools. As students from richer households increasingly enroll in private primary schools, designing policies that address the achievement gaps in public primary schools will overwhelmingly benefit students from poorer households that are unable to access private schools.
Evidence from randomized evaluations suggests a number of key cost-effective interventions that could be introduced to address the inequities in access and achievement in primary school. Large-scale deworming programs, for example, have been shown to be extremely cost-effective at increasing schooling and could go a long way in boosting participation, especially among the poor.
The research suggests that programs that provide remedial education to students that are falling behind are very effective. These programs can be even more effective if the remedial educators are accountable to local school committees. For example a program where local school committees are provided with grants to hire remedial education instructors could have even larger effects. Programs that allow teachers to tailor their lessons to better suit the level of preparation of their students are effective at boosting students’ academic performance. The existing evidence shows that a merit scholarship program can raise achievement. Since primary school fees have been abolished, providing merit scholarships for students who gain admission to secondary school is a possibility that warrants further exploration. Additional programs that provide teachers or head-teachers with incentives to raise the levels of learning in their students could also be piloted and evaluated on a small-scale before implementation on national-scale.
Secondary Education
While the past decade has seen tremendous increases in primary school access, secondary school access remains low. In 2009, the secondary school net enrollment rate was approximately 50% (World Bank, 2009), while the primary-to-secondary school transition rate was equally low at 55% (MOE, 2010). Despite the recent reductions in secondary school fees, these fees still present a major financial obstacle. The 2005 Kenya Integrated Household budget shows that on average secondary school expenditures accounted for approximately 55% of annual per capita household expenditures. While the increased availability of bursaries (e.g. from the CDF) have provided many families with financial assistance, the pressing burden of secondary school fees prevent many students from attending secondary schools. These financial barriers are especially important for females and vulnerable groups such as orphans, and the poor.
The continued poor public school performance in the KCPE can also act as a barrier to secondary school access. Data from the 2004 KCPE examinations shows that 77 percent of private school candidates qualified for secondary school by scoring over 250 points, while only 45 percent of students in public schools qualified. This disparity in the performance between private and public primary schools has also led to the continued overrepresentation of private school graduates in the elite National Secondary schools. While the recently introduced MOE policy implemented a quota on the number of private primary school students that could be admitted to National schools, this policy did not address the root causes of the private-public performance gaps. Moreover, it is possible that unintended consequences of this policy, such as increased social stratification in the secondary school system, where high performing private primary school students attend private secondary schools, could negatively impact the public secondary school system in the long-run. Overall, student performance in the KCSE was poor. In 2008, only 25% of students scored at least a C+ on the KCSE, with girls being less likely than boys to score at least a C+. The performance was weakest in District schools, where only 11% of students scored at least a C+, compared to 43% in Provincial schools and 90% in National schools. The difference in performance across these types of schools partly reflects differences in facilities, teachers and other resources, but it also reflects the different levels of academic
preparation of the students admitted to these schools.
With the increasing demand for secondary school as a result of the FPE program, it is becoming increasingly important to implement programs that address the primary-to- secondary school bottleneck. Introducing programs that reduce the financial barriers to secondary schooling especially for females and students from disadvantaged families could have important implications. For example, a merit scholarship program for students from poor backgrounds who gain admission to a national or provincial school could both alleviate the financial barriers and stimulate student performance in primary schools.
Conditional cash transfers have been used to encourage educational enrollment among the poor in many countries. These programs provide families with a small cash transfer if their children meet certain school attendance targets (for example, an 80% attendance record is often required). These programs have been shown to both promote access to education and to boost test scores. However, these programs are very expensive to implement. Lack of information has also been identified as a constraint that prevents many individuals from adequately investing in education or from accessing quality schools. With limited information about the quality of schools and the secondary school selection process, children and parents often make many judgment errors in the process leading to unfavourable outcomes. Data from the 2004 KCPE records shows that over 20% of students made judgment errors in selecting their preferred schools that led them to miss opportunities to enroll in higher level schools. In addition, data from other settings has shown that individuals in developing countries are often misinformed about the economic (or pecuniary) benefits of education. Overall, the research has shown that individuals from poor backgrounds are more likely to be constrained by information. Providing individuals with more information on the benefits of education, the quality of secondary schools and on the school selection process could boost secondary school enrollments and also allow students from poorer backgrounds to access better quality schools. This is a very cost-effective way of improving the outcomes of students from disadvantaged backgrounds. Given the high incidence of judgment errors committed by students in the secondary school selection process, it may be instructive to explore reforms to the secondary school assignment system.
Vocational Education
There is a growing consensus that youth unemployment in less developed countries is a major economic and social problem, especially in Sub-Saharan Africa. A recent World Bank report states that youth account for approximately 60% of the unemployed in this region, and that 72% of adolescents in Sub-Saharan Africa live below the “$2 a day” poverty line (World Bank 2009). Data from the 2005 KIHBS shows that approximately 21% of youths aged 15-29 are unemployed and a further 25% are neither in school nor working. Vocational education has been identified as a promising avenue through which young adults can acquire marketable skills that will enable them to obtain employment.
Although government subsidies have reduced the fees in the vocational training sector, the current fee levels are still significant barriers for many. The current fee levels at the cheapest government schools account for approximately 15 percent of annual per capita expenditures. Preliminary evidence from an on-going randomized vocational training project suggests that reductions in fees through scholarships (or vouchers) can significantly increase vocational training enrollments. Evidence from the project also suggests that students were often misinformed about the highest earning trades. Given the apparent misperceptions, providing more accurate information can enable individuals to make better informed decisions about vocational training.
There is a growing sentiment that the public provision of training produces students with skills that are not relevant on the labor market. The proponents of this view often argue that the private training institutes are more flexible, more adaptable and better able to provide trainees with market-relevant skills. While there is limited evidence on the ability of private institutes to deliver better training, preliminary evidence of an on-going randomized vocational training project suggests that providing students with access to the private sector through a voucher program can improve outcomes such as increased student enrollment and retention. Given the preliminary evidence from the on-going vocational training project, it could be constructive for the government to introduce and carefully evaluate a pilot voucher program that allowed individuals to access both public and private vocational training centres.
Cross-Cutting Issues
Poor health has been shown to impede educational access, attainment, and achievement for students in developing countries. School-based health initiatives could be introduced across all levels of the education system to boost the educational outcomes of students. School-based deworming programs have been proven to boost the schooling participation of Kenyan primary school students. School based micronutrient supplementation could also positively impact student educational outcomes. Additional programs that focus on HIV prevention, specifically those that warn girls about the HIV risk posed by older men have been shown to be very effective at reducing risky behavior.
The available evidence points to the need to rethink and explore innovative ways to boost learning in the education system. Research has shown that technology, such as computer aided instruction (or mobile phone aided instruction), can boost student learning. These programs can be especially important for less prepared students as these technologies can provide them with specifically tailored supplementary instruction. Remedial education programs across all levels of education could also benefit those who are falling behind. While there is evidence on the benefits of remedial education at the primary level, there is little evidence of the benefits at higher levels of education. This is an area for further research and exploration. Additional evidence has also identified the potential of using teacher incentives to boost learning. Exploring these possibilities could significantly boost the productivity of the education system.Vouchers that allow students to access private primary, secondary and vocational schools could also be introduced. As these programs allow students to “vote with their feet”, vouchers have the ability to increase productivity in the education sector by increasing competition among schools. These types of vouchers also allow governments to harness the burgeoning private market for education.
There is also a need for increased emphasis on improved monitoring and evaluation. Improved data collection can allow government to better design policy and identify key constraints in the education system. Making this improved data available to researchers, allows the government to benefit from additional insights generated by external researchers.
High-Impact and Cost Effective Approaches:
Taking into account the severe budget constraints facing the Ministry, we believe the highest priorities should include: 1. Deworming—a renewed implementation of the national school-based deworming program. At less than $0.50 per child per year, deworming is widely recognized as one of the most cost-effective ways to boost school attendance.
2. Need-based secondary school bursaries—a scholarship program for students from poor backgrounds whose KCPE score would qualify them for admission to a national or provincial secondary school.
3. Grants to finance remedial education—a program in which school committees are given grants to hire assistants for remedial education in lower standards.
4. Piloting vouchers for vocational education—an implementation of rigorously evaluated pilot programs providing vouchers for vocational education, redeemable at either public or private institutions.
5. Piloting early-childhood development—a rigorously evaluated pilot program to support local school committees ECD programs.
6. Piloting teacher incentives—a program to test several approaches to improving teacher incentives, including enhanced inspections and a contract- based assignment of head teacher positions.
7. Information campaigns—a program that provides primary school students with information about the secondary school selection process, including information on the popularity of each secondary school. The program could further provide secondary school students with information about post- secondary options and could also disseminate information on the wages associated with different levels of education to students.
8. School-based health initiatives—incorporation of other high-priority school health initiatives, including informing girls about the HIV risk posed by older men.
How the report is organized
The rest of the report is organized as follows. Section 2 covers Improving Access; Section 3, Improving Quality and Achievement; Section 4, Cross-cutting Issues; and Section 5, concludes. Sections 2 and 3 consist of 3 divisions: (1) Primary Education, (2) Secondary Education, and (3) Vocational Education.
All covers issues and potential reforms that touch on improving both access and quality in all three sectors.
Comparison of the Formal Education Systems in the Six Country. Primary Secondary Tertiary
Kenya 8 4 4
India 8+2+2 3
Enrolment in Secondary Technical and Vocational School as a Percentage of Total Secondary School Enrolments in Kenya & India Enrolment in Total Enrolment TVET as % technical and secondary education vocational Total (000) Enrolment of total education (TVET) in secondary Total (000) enrolment Kenya 28 1,390 2.01 India 710 81,050 0.88
Textile sector Summary
Enrollment Students Name Faculty Guide 117340592128 HIREN MAGANBHAI BAVISA 117340592131 ALIAKBAR ALIHUSEN BHARMAL 117340592132 SWATI LALITKUMAR MODI Prof. Priya Unadkat 117340592133 VASHAV HASMUKH MAKHECHA 117340592135 DINESH RAMJIBHAI KOTHIYA
Textile sector Summary Cotton production offers the greatest potential for increased employment, poverty reduction, rural development and generation of increased incomes in arid and semi-arid areas of the country. The sub-sector has been identified as one that could help bring rapid economic development in the country. It has therefore been classified as a core industry by the Kenyan government. Cotton production was introduced in Kenya in the 1900s by the colonial administration. However, it was not until the early 1960s that the crop was introduced in many parts of the country, being encouraged in areas with low rainfall and therefore unsuitable for other cash crops. Kenya’s cotton sector was still dominated by private colonial ginners till independence in 1963. Immediately after independence Kenya adopted an import substitution policy that ensured a backward integration of textile mills. Between that time and the end of 1990 the Government systematically introduced controls into the sector: it helped cooperative societies buy ginneries from the colonialists, controlled marketing margins, fixed producer prices and invested heavily in textile mills. Investments in growing and ginning of cotton, spinning and weaving operations, in addition to those in production of apparel and other products are assured of ready local, regional and international markets. Attractive investment incentives and production advantages are found in Kenya.
TEXTILE INDUSTRY OVERVIEW OF INDIA The Textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labour in textiles. The textile industry continues to be the second largest employment generating sector in India. It offers direct employment to over 35 million in the country. The share of textiles in total exports was 11.04% during April–July 2010, as per the Ministry of Textiles. During 2009-2010, Indian textiles industry was pegged at US$55 billion, 64% of which services domestic demand. India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors.
Indian textile industry can be divided into several segments, some of which can be listed as below:
Cotton Textiles Silk Textiles Woollen Textiles Readymade Garments
Hand-crafted Textiles Jute and Coir The archaeological surveys and studies have found that the people of Harappan civilization knew weaving and the spinning of cotton four thousand years ago .Reference to weaving and spinning materials is found in the Vedic Literature also. There was textile trade in India during the early centuries .A block printed and resist-dyed fabrics, whose origin is from Gujarat is found in tombs of Feostat, Egypt. This proves that Indian export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large extent. Large quantities of north Indian silk were traded through the silk route in China to the western countries.
COMPARE THE TEXTILE INDUSTRY BETWEEN KENYA AND INDIA
Contents Kenya Textile Industry Indian Textile Industry GDP contribution 0.24% 2.28% Export earning More than 50% 25% contribution Employment 3.7 million people opportunities 35 million people Generated Cotton production Cotton production was The Indian Textile introduced in Kenya in the 1900s byIndustry is the second largest in the the colonial administration. world. It has the largest cotton Currently the crop is acreage (9 million hectares). grown in Nyanza, Western, Coast, It is the third largest Central, Eastern and Rift Valley cotton producer. provinces, largely under rain fed It ranks fourth in terms of conditions. staple fibre production, and sixth in filament yarn production. India accounts for (circa) 25% of the Global trade in cotton yarn. It is the largest producer of Jute, the second largest producer of silk and the 5th largest producer of synthetic fibre / yarn. (Ref 6).
Major players Rivatex East Africa Ltd Welspun India Ltd Alpha Knits Ltd Vardhman Group Squaredeal Alok Industries Ltd Tarpo Raymond Ltd Bombay Dyeing
Strengths Lower labor cost Availability of Cotton Good ecological Lower Labor Costs environment Well educated Low country risk rating.supervisory staff Business start-up Well educated Technical procedures are minimal & Managerial skills Good rating on corruption perception.
Weaknesses High cost of electricity and High power costs it reliability Poor supply chain Cost of fabric productionmanagement in Kenya Huge unorganized and Poor transportation facilitydecentralized sector Sourcing of raw material
CURRENT AFFAIR BETWEEN INDIA AND KENYA:
India urges Kenya to lower import tariff on textile products. It is to be noted that, Kenya imposes high import tariffs (MFN Duty) on the imports of Man-made fibre textile items from India viz. Yarn and Fabrics up to 25%, and Made ups up to 50%. In addition to tariff, Kenya also imposes 16% Value Added Tax (VAT) on imports. Sharma later informed that, in the calendar year 2010, Indian Textiles & Clothing (T&C) exports to Kenya were US$ 100 million against US$ 77 million during 2009. Manmade Staple Fibre (MMSF), Manmade Filaments (MMF), Apparel articles and textile article nesoi / clothing are the major textiles export items to Kenya. As per latest available statistics, during the first seven months of calendar year 2011, there has been a decline in the exports of T&C items to Kenya by 13.81% moving to USD 50 million as against USD 58 million in the corresponding period of 2010. Imports from Kenya during the calendar year 2010 were USD 3.4 million and the majority of it was on account of the Wool and Veg Text Fib nesoi / paper yarns.
An India-Kenya Double Taxation Avoidance Agreement (DTAA) was signed in 1989. Negotiations for concluding a Bilateral Investment Promotion Agreement (BIPA) and to review the DTAA have been under consideration of the two governments for some time. POLICY AND REGULATORY FRAME WORK IN KENYA
The institutional framework for regulating the textile and clothing industry in Kenya is placed under two government ministries. The Ministry of Trade and Industry oversees issues related to trade while the Ministry of Agriculture gives the framework for cotton growing and irrigation schemes. There is a Cotton Board of Kenya, functionally placed under the Ministry of Agriculture to coordinate production and marketing of cotton in the country. The Board was established under an Act of Parliament, Cotton Act (Chapter 335).
The Act also provides for the promotion and regulation of the cotton industry. Other functions include to:
Plan, monitor and regulate cotton growing and ginning; License and control ginners and other persons dealing with cotton; Regulate the export and/or import of cotton lint and seed; Advise the minister on the pricing of raw cotton;
Regulate and control the quality and supply of planting seeds through ginneries; Carry out and promote research and development in cotton production and processing technology; and Provide and/or co-ordinate training for any sector of the cotton industry
The market has changed over the years and for this reason the Kenya government through the Ministry of Agriculture has prepared a bill which is currently before parliament that will change the Cotton Act and replace it with one that is more dynamic and responsive to the current market. This bill is awaiting debate in parliament to make it law.
POLICY AND REGULATORY FRAMEWORK IN INDIA
The Ministry of Textiles is responsible for policy formulation, planning, development, export promotion, and trade regulation in the textile sector. This includes all natural and manmade cellulosic fibre used to make textiles, clothing and handicrafts. National Textile Policy, 2000 -the policy was introduced for the overall development of the textiles industry.
THRUST AREAS In furtherance of the objectives, the strategic thrust will be on:
Consciousness Strengthening of raw material base Product diversification Increase in exports and Technological upgrades Enhancement of productivity Quality innovative marketing strategies Financing arrangements Increasing employment opportunities Integrated human resource development
PRESENT TRADE BARRIERS FOR IMPORT / EXPORT OF TEXTILES INDUSTRY There are some benefits offered by Indian Textile Industry: India covers 61 percent of the international textile market. India covers 22 percent of the global market. India is known to be the third largest manufacturer of cotton across the globe. India claims to be the second largest manufacturer as well as provider of cotton yarn and textile in the world. India holds around 25 percent share in the cotton yarn industry in the world. India contributes to around 12 percent of the cotton yarn industry across the globe i.e the production of cotton yarn and textiles. Not just the current time that is glowing like a brilliant begin but also the promise is also there for upcoming years. As the textile export market of India is expected to reach a high of $50 billion in the forth coming years. This will sooner or later put together revenue of 300%. In order to reach this goal Indian textile industry is already going ahead getting better their design skills, as well as a mixture of different fibres. Indian textile industry is all set to meet global standards and is scheduling to empower $5 billion in machineries in near future. A trade war, with ever increasing importance to U.S. cotton growers and U.S. textile workers continues to brew between Vietnam and U.S. textile industries. The 15th round of the ongoing cotton talks in the Trans-Pacific Partnership trade agreement hearings ended this past fall with much the same results — Vietnam walking out on the negotiations. The two sides are bitterly divided between two basic marketing principles: The Single Transformation Rule and the Yarn Forward Rule. U.S. cotton growers are caught squarely in the middle of the fight. The U.S. textile industry, U.S. cotton grower’s most loyal customer, favours the Yarn Forward Rule. Vietnam, one of the fastest growing customers of U.S. grown cotton, and China, by far the largest volume buyer of U.S. cotton, support the Single Transformation Rule. Vietnam is a partner in the Trans-Pacific Partnership talks, but China is not. However, some contend China would be the big winner should the Yarn Forward Rule of Origin loses out in the ongoing negotiations. China is the largest buyer of U.S. cotton, comprising 42 percent of total export cotton sales last year.Vietnam was the fifth largest buyer of U.S. cotton last year, with annual purchases near 500,000 bales. The country’s jump from seventh to fifth among U.S. cotton importers makes Vietnam the fastest growing purchaser of U.S. grown cotton. China typically buys 5-6 million bales of U.S. grown cotton, with Turkey and Mexico combining to account for about 25 percent of export sales. Pakistan and Vietnam each make up about five percent of total exports.
In a report in early February, the Vietnamese Minister for Industry and Trade noted that his country’s export of apparel and textile goods rose to $1.05 billion dollars last year. The minister termed the increase in production an optimistic sign of Vietnamese economic growth. However, of most concern to U.S. cotton growers, he also urged textile and clothing manufacturers to minimize dependence on foreign import of raw cotton and invest in domestic cotton production. The textile industry represents one of the more graphic examples of de-industrialization over the last few decades and raises the need for serious rethinking of national economic policies. From the 1970s into the early 1980s, the sector used to employ over 25,000 workers nationwide. The textile industry has suffered and continues to suffer unjustified ably from unbridled importation of all manner of textile and garment products, some through dubious means with questionable origin and quality. These products have flooded the local market and have led to the collapse of many local textile industries.
Cotton textile industry is obsessed with many problems. Two main factors which have wrecked die industry are… (1) Government's textile policy and (2) The growth of the power loom sector. The result was that many cotton mills became inefficient and uneconomic-one-dirt of the cotton mills became sick and was closed down. By 1992 as many as 130 cotton mills were closed down. Following are some of the problems faced by the industry.
KENYA OFFERS MANY ATTRACTIONS TO THE FOREIGN INVESTOR
These include the following: (1)A stable political environment: Kenya has enjoyed a stable political climate with smooth transition of government over the years. (2)A sound macroeconomic policy: Government’s macroeconomic policy is designed to accelerate the process of growth and transformation of the economy under competitive conditions. Monetary policy has been consistent and fiscal discipline is apparent from lower budget deficits. Inflation continues its downward course and access to foreign exchange is improving. (3)Warm and friendly people: Kenya is internationally recognized for her hospitality and warm affection for her investors. (4)Competitive labour cost:
Kenya also offers a large workforce of both skilled and unskilled labour available at competitive wages. (5)Fast developing financial infrastructure: banks, insurance, and brokerage firms, and a stock exchange that allows companies to raise long term capital at low cost.
(6)Availability of skilled and trained labour.
(7)Quota-Free access to USA & European Union markets.
(8)100% foreign ownership permitted in on-going privatization programmed.
(9)Good and ever improving physical infrastructure: Kenya has developed seaports, airports and roads network. Telecommunication facilities are available as are basic utilities like water and electricity.
ADVANTAGES FOR DOING BUSINESS IN KENYA
Stable, multi-party government
Demonstrated commitment to market liberalization
Ongoing privatizations in key economic sectors
Expanding stock market
Competitive labour force
Ongoing infrastructure development
Export free zones where goods traded with other countries are exempt from customs duties and laws
Immediate access to all markets of the Economic Community of West African States (ECOWAS)
Quota-free access to U.S. and European Union markets .
Fishery Sector Summery
Enrollment No Students Name Faculty Guide 117340592136 JALPA RAJESHKUMAR PARMAR 117340592139 CHARULA BAVANJIBHAI MAKADIA 117340592140 MOHSIN HUEESNBHAI MADAM Prof. Priyanka Mehta 117340592144 PRIYANKA MUKESHBHAI RADADIYA 117340592145 HARESH PRAVINBHAI DHANANI 117340592152 HARDIK JYESHBHAI CHAVDA
Fishery Sector Summary
The contribution of the world’s fisheries to national and global economies is substantially greater than generally recognized by decision-makers. Commercial fishing constitutes the economic base for an extended value chain through processing and marketing, through retailing and the restaurant and food service industry. Subsistence fisheries are important for food security and livelihoods while in some countries recreational fisheries are of greater economic importance than the commercial capture fisheries. About 120 million people are directly dependent on commercial capture fisheries for their livelihoods. Ninety-seven percent (116 million) of the ‘fish people’ live in developing countries and 92 percent are involved in the small-scale fisheries sector. In the small-scale fisheries, almost half (48 percent) work in inland waters (lakes, rivers, wetlands), and about half (47 percent) are women, mainly engaged in the post-harvest activities, handling the fish after it is caught and ensuring that this important source of nutrition reaches more than 1 billion consumers for whom fish is a key component of their diets.
Fishing season Kenya deep sea starts from early July through April. The southeast monsoon (Kusi) blows from mid-March to mid-November and is colder than the northeast (kaskazi) blowing the rest of the time. The seas are warmer and calmer in fish nonresident kaskazi months.Most but migrate through the waters of Kenya. We have a good idea of when is the best time to fish for individual species, but the exact time depends on the water temperature, food availability, clarity, power, water, etc.
The main season for billfish (sailfish and marlin) from October to mid to late March, however sailfish and black marlin are often near the coast in July and August numbers (these months have been fantastic for the black marlin on many occasions). If you want to target blue marlin and striped marlin is best to come between January and mid-March (book in advance if you want a decent ship between February 15 to March 15 many are booked a year in advance). With each individual fish species on this page cover a section on target dates and fishing. The vast majority of fish can be caught through the season and along the coast of Kenya, deadlines and are areas where I think it would have the best chance of recovering most of the fish. All boats are recommended wholeheartedly support the practice of "Tag and Release" of billfishes, sharks and many types of fish.
Below the graph is all tagged fish in the last two decades by the month they were labelled, giving a good indication of the different species migrating through the waters of Kenya. One thing to remember when looking at this chart is that about 60-70% of fishing days in Kenya takes place between mid-December and mid-March. This takes account of the July / August black marlin term is even more impressive to know that only 5-10% of Kenya charter boats are even in the water at that time.
1. Introduction Fisheries have impacts on the marine environment other than those that arise from the removal of a proportion of the population of the target species. These may be direct, such as impacts on marine populations or habitats from unselective gear, destruction of the seabed or interactions with rare or endangered species. Fishing impacts may also be indirect, for example contributing to climate change via the carbon emissions of fishing vessels. In this report, we i) rank EU fishing fleets according to their direct and indirect environmental impacts (as far as possible), from most to least environmentally damaging; ii) consider the hurdles that fishermen face in trying to switch from an environmentally damaging fishing technique to a less damaging one; and iii) consider the policy actions that could be taken at EU, Member State and/or local level to reduce or eliminate some of these hurdles. We analyse the relative impacts of different fishing techniques and fleets using fisheries data published by the European Commission and other published studies. We analyse the hurdles and potential policy actions using a series of 19 case studies taken from fisheries operated by European Union Member States. Information for the case studies was gathered either from published sources or from interviews with people in or close to the industry. Due to the sensitive nature of some of the information presented in the case studies we are obliged to keep sources anonymous where anonymity was requested, however as much information is provided as possible.
Analysis of environmental impacts by gear and fleet The European Commission categories fishing gears into three groups: towed, mobile and passive. Towed gears include all types of trawls and dredges. Passive gears (also known as ‘fixed’ gears) include fixed or drifting gillnets and trammel nets, fixed or drifting longlines and hand lines. Mobile gears (intermediate between passive and towed) include seines, towed longlines and trolling lines. In terms of vessel numbers, the most commonly used gears
in the EU are passive gears (fixed gillnets and trammel nets). In terms of total vessel tonnage or power, the most commonly used gear is towed – the demersal otter trawl. We first consider direct environmental impacts. It is clear that different types of gear will have different types of impact – selectivity, by-catch, habitat impacts and impacts on vulnerable species vary a great deal by gear. Gears that rank highly for one type of impact may rank low for another. We assessed gears according to these four types of impact (using a series of published studies) to produce a ranking according to the type of fishery. For pelagic fisheries, drifting gillnets were considered the 3 most damaging, particularly in terms of their impacts on vulnerable species. Lines were considered the most environmentally friendly option for pelagic fisheries, while midwater trawls and purse seines were intermediate. For demersal fisheries, dredging and beam trawling were considered to have the highest impact, followed by other demersal trawls, then nets. Again, lines were considered the best option to minimise direct environmental impacts. Secondly we consider carbon emissions. We found it much more difficult to rank gears by carbon emissions. An important consideration is whether carbon emissions are assessed per unit weight of catch or per unit value (i.e. per kg or per euro). If they were calculated per unit weight, highvolume fisheries (usually fisheries for small pelagic species) tended to rank high – however we note that the produce of these fisheries is usually processed into fish meal to produce other types of animal protein – if the emissions per unit weight of the final product were considered, doubtless these fisheries would perform a lot less well. If carbon emissions are calculated per unit value of catch, fisheries for very high value species tend to perform best. It was, however, possible to draw general conclusions from this analysis, if tentatively, as follows: i) generally demersal trawl fisheries and offshore longline fisheries both performed badly in terms of emissions per unit catch; ii) towed and mobile gears generally performed worse than passive gears; iii) with some exceptions, small vessels performed better than medium-sized vessels – however there was no evidence that mediumsized vessels performed better than large vessels (but data was sparse for this comparison); iv) depleted, poorly managed stocks led to higher emissions per unit of catch. The most striking result from our analysis, however, was the high and unexplained variability between fleets and Member States.
Analysis of policy actions to support change From the above case studies, we also identified policy actions that may reduce or remove some of the hurdles to change in EU fisheries. These are presented below: Decision-making by policy makers should be transparent and should follow stated EU policy (e.g. no subsidies which increase capacity, fisheries management according to the precautionary approach). This should apply to EU fisheries policy both inside and outside the EU. The information that supports management should likewise be public. It is clear that fisheries targeting well-managed stocks have lower environmental impacts, both direct and carbon-related. Where fish are more abundant, it requires less fishing effort to achieve the same volume of catch, therefore resulting in less incidental bycatch, habitat degradation and fuel consumption. Good fisheries management involves higher costs, for example to fund the research necessary to make sound decisions and to fund effective enforcement of the decision. Member States should recognize that meeting these costs are vital if fisheries are to result in sustainable economic benefits. The sustainable exploitation of depleted fish stocks will only be possible after a temporary (but meaningful) reduction in fishing effort. Further studies linking fish abundance and the economic performance of fishing fleets would be useful, particularly to support decision-makers when facing communities dependent on the economic returns from a depleted stock. Involving the fishing industry and other stakeholders in decision making is vital. The case studies show clearly that the most 5 innovative ideas for reduction of environmental impacts in fisheries come when policy-makers and the industry work closely together. Dialogue has improved markedly in recently years, but there remains a need to move from consultation to real participation. We note that the small-scale fleet is still largely excluded from this process in many Member States. The current regulatory regime micro-manages most fisheries in the EU, and prevents fishermen the flexibility required to innovate. If the management regime were to step back and give fishermen space in which to operate as efficiently as possible, the process of improving the sustainability of fisheries would likely progress more swiftly. This requires that regulators, scientists and other stakeholders have an excellent oversight of the fisheries within their sphere of influence and that stakeholders engage in meaningful dialogue underpinned by mutual respect – this is conspicuously absent in many instances at the present time.
Hidden subsidies and other perverse incentives that maintain the apparent economic viability of environmentally damaging fishing operations need to be urgently addressed and removed – likewise regulatory obstacles to innovation should be dealt with. For technical changes, it would be hugely beneficial to review best practice operations across EU fisheries (or even more widely) followed by a dissemination of information about how fishermen can reduce their carbon emissions and direct environmental impacts. This could usefully take the form of a central data repository that is open to all. Rising fuel prices give fishermen a significant incentive to participate in this process. This process should also reveal the regulatory obstacles to implementation of best practice, which can then be dealt with. It may be considered appropriate to provide some kind of support to fishermen in reducing their impacts – this might be in the form of training, technical advice or even loans. However it is extremely important that this support does not provide a de facto subsidy for increasing overall capacity – bearing in mind that if vessels owners can operate more efficiently they will have extra funds to invest in increasing their fishing capacity. Balancing policy between fleet sectors: We note above that in general, the small-scale fleet in the EU has lower environmental impacts per unit of catch than the large-scale / offshore fleet. This is because the small-scale fleet has lower carbon emissions and because it tends to use more benign gears. However, from a policy perspective, the large-scale fleet is much easier to deal with: it is easier to engage with, easier to manage, and easier to enforce. Compliance with regulations is therefore higher. Various policy initiatives, such as decommissioning, Regional Advisory Councils, quota distribution, Individual Transferable Quotas and other rights-based systems have tended on balance to favour the large-scale fleet. In particular, we note that the quota distribution system in many (perhaps most) Member States has not been good for the profitability of the small-scale fleet and has in addition led to a significant amount of discarding, high-6 grading or landing of ‘black fish’. A lower-impact future for EU fisheries will require policy-makers to shift the balance towards the small-scale fleet, making more of an effort to engage with this group and adapting the management system to better reflect their operational requirements. Gear conflicts can be eliminated by marine spatial planning – low-impact passive gears can only enter a fishery if they are given room to operate away from towed gears. There should be a presumption of zero discarding. At the same time, the management regime needs to adapt to ensure that this is possible for fishermen. For example, if fishermen catch alongside the target species a species for which they do not have quota, their only choice at present is to discard or illegally land the fish. In general, fishermen abhor discarding
and, we believe, would be willing to work with policy makers to ensure that a discard ban can be introduced in a coherent way.
Converting trash fish to surimi products is a booming industry in Southeast Asia for example. Support to improve the quality of the end product will increase income per unit of catch and should make the sector more viable and more sustainable. It is particularly important if EU fisheries are to compete with an influx on to the EU market of cheap tropical farmed fish. Overview of fishery in India Fishing in India is a major industry in its coastal states, employing over 14 million people. Fish production in India has increased more than tenfold since independence in 1947. According to the Food and Agriculture Organization (FAO) of the United Nations, fish production in India doubled between 1990 and 2010. India has 8118 km of sea coast, 3,827 1,914 fishing villages and traditional centers of landing fish. Freshwater resources of India consist of 195.210 km of rivers and canals, 2.9 million hectares of reservoirs, small children, 2.4 million hectares of ponds and lakes, and about 0.8 million hectares of wetlands floodplains and water bodies.As 2012, marine and freshwater resources offer a sustainable fisheries capture combined potential of over 4 million metric tons of fish. In addition, the Indian water and natural resources offer potential tenfold growth of aquaculture (fish farming), 2012 harvest levels of 3.9 million metric tons of fish, if India adopted fishing knowledge, reforms regulatory and sustainability policies adopted by China during the last two decades Marine fish collected in India consists of about 65 species / groups commercially important. The pelagic and mid-water contributed about 52% of all marine fish in 2004. India is a major supplier of fish in the world. In 2006 the country exported more than 600,000 metric tons of fish, about 90 countries, earning over $ 1.8 billion. Shrimp are one of the main varieties exported. The prawn (Penaeus monodon) is the dominant species chosen for aquaculture, followed by white shrimp (Fenneropenaeus indicus) Indian. Shrimp production of coastal aquaculture in 2004 was 120,000 tons. Farmed shrimp accounted for about 60% of shrimp exported from the country. Marine and fishing freshwater fishing combined with fish aquaculture is a rapidly growing industry in India. In 2008 India was the sixth largest producer of marine capture fisheries and fresh water, and the second largest producer of aquaculture farmed fish in the
world. Fish as food, both fish farms and fishing capture India offers one of the easiest and fastest way to address malnutrition and food security. Despite the rapid growth of the total fish production, average annual production of fish farmers in India is only 2 metric tons per person, compared with 172 tonnes in Norway, 72 tons in Chile and 6 tons per fisher in China. Increased productivity, knowledge transfer for sustainable fisheries, the continued growth of fish production with increasing fish exports have the potential to increase the standard of living of the Indian fishermen Distribution of fish industry in Indian states :
Rank State Total production (metric tones )
1 West Bengal 19,47,260 2 Andhra pradesh 11,10,830 3 Gujarat 9,21,910 4 Kerala 8,67,330 5 Maharastra 7,56,450 6 Tamil Nadu 6,59,360 7 Bihar 5,19,100 8 Karnataka 3,97,690 9 Orissa 3,49,480 10 Uttar pradesh 2,25,950
Laws and Regulations for Aquaculture :
Aquaculture is practiced mainly in water bodies leased private and public bodies.
private bodies or cooperative and use rights rests with the investor.
Aquaculture has developed as a commercial activity in the 1980s and shrimp.
culture reached the status of an industry in the 1990s. The laws relating to the shrimp farming in Kerala followed by filtration of shrimp and fish from Lunar cycles. Some of the laws relating to aquaculture are:
• Law on Environmental Protection, 1986 • 1955 Amendment to the Agrarian Reform Law of 1974 decision to lease land for exception aquaculture • 1997 Directive Court Authority to establish a Coastal Zone Management to apply the principle of "caution" and "polluter pays" • Constitution of Aquaculture Authority to issue licenses to traditional improve coastal aquaculture Regulated (CRZ) 1997 • Restricting the use of certain chemicals, antibiotics, pesticides and explosives, according to the Government of India Notification 2002. Projected supply, import and production of fish, India(million kg)
Year Scenario1 Scenario2 Scenario3 Scenario4 Scenario5 Supply
2002(base) 5481.6 5481.6 5481.6 5481.6 5481.6 2007 6741.8 6669.0 6576.3 6441.2 5460.1 2012 7833.7 7575.0 7275.5 6893.9 5445.0 2017 9119.4 8519.5 7894.1 7199.4 5430.1 Import
2002(base) 70.7 70.7 70.7 70.7 70.7 2007 75.6 75.4 75.1 74.7 71.6 2012 79.3 78.7 77.9 76.8 72.3 2017 83.3 81.9 80.3 78.5 73.0 Production
2002(base) 5410.9 5410.9 5410.9 5410.9 5410.9 2007 6666.3 6593.6 6501.2 6366.5 5388.5 2012 7754.4 7496.3 7197.6 6817.1 5372.7 2017 9036.1 8437.6 7813.8 7121.0 5357.1
THE GOVERNMENT OF INDIA PROGRAMS FOR FISHERIES DEVELOPMENT:
Genetic diversity, the preservation of the health of ecosystems, increasing the profitability of fishermen and fish farmers through an integrated approach from production to consumption. Promote healthy food fish and meet the changing needs of the domestic and export markets, strengthening the collection infrastructure, post-harvest, value addition and marketing and elevation of fishermen and communities "aqua-farmers, with gainful employment opportunities and capacity building. With regard to development programs for fisheries and aquaculture during the XI Five Year Plan, the objectives are: Increased production of Indian water fish in an environmentally sustainable and socially equitable, it is necessary to deal with the unexplored potential of India, for example fisheries fishing island and non-food fisheries, conservation of aquatic resources
The main thrust areas for XI Five Year Plan : 1. Optimization of production and productivity, 2. Increased exports of marine products, 3. Generation of employment, 4. Improving the welfare of fishermen and their socioeconomic conditions.
Comparison of fishing businesses in India v / s Kenya : Fishing India Act: New in 2011. Point of sale of hunting and fishing licenses. The Wildlife Division has signed a contract with The Active Network, Inc. to build and implement sales of web-based licensing and control system of the game. The new system will replace the existing hunting, fishing and trapping sales system license / permit on March 1, 2011. Benefits of new license sales and game operations systems verification is done in real time and available during the holidays, when many licensed outlets / check stations are closed. Times faster and easier, more efficient, reducing waiting for customers. Hunters and fishermen will save fuel costs, time and frustration licensed outlets closed / check stations, which equals more time in the field. It helps to ensure that customers are properly licensed. The system will not sell to minors under license suspension or other restrictions. Allow biologists and law enforcement to collect data electronically to manage wildlife and enforce Ohio hunting regulations -. India
Kenya Fisheries Act: The Fisheries Act was established to "provide for the reorganization, development and regulation of the fishing industry, to take measures for the protection of fish and for purposes connected therewith". Through this law, created the Department of Fisheries (FID). This department, in collaboration with other relevant agencies and other government departments, promotes the development of artisanal and industrial fishing. To do this, providing extension services and training, conducting research and studies, encouraging cooperation among fishermen, promote orderly marketing of fish, the provision of infrastructure, water storage with fish, and fish supply planting. In the course of fisheries management, IDF may take legislative measures to: • closures declare designated areas, species of fish or fishing methods; • Prohibit fishing for all fish species or designated or fishing methods; • Place the limits of fishing gear, such as net mesh that can be used for fishing; • Limit the amount, size, age, species or species composition of fish that can be caught, landed or traded; • Check the insertion or removal or removal of all water Kenya fishing any water plant. Employment in capture fisheries while fishing itself is clearly an important source for employment, the bulk of fisheries Employment is in the postharvest sector, that is, in fish processing and marketing on average, there are 2-3 people employed in post-harvest activities.
When postharvest activities are included, there are over 84million fulltime and part time fishers and fish workers in the case study countries. Over 90percent of this total workforce is employed in the small-scale fisheries sector and over half workin inland waters - lake, river, flood plain and wetland fisheries
Fulltime and part time fishing and post harvest employment : Country Number of fishers Postharvest fish % in small- scale workers India 2,063 8,254 82%
Kenya 196 30 89%
Table Estimates of country by country extended fisheries sector GDP
Country Harvest 1.765 GDP
Kenya 0.005 260 29509
India 0.0107 22114 1170968
country Fishing Post Fisheries Comment on fisheries GDP harvest GDP GDP GDP calculation India 1.07 - - GDP based on price of fish in 2003-04
Kenya 0.50 - - Producion only. Not including VA from various supply chain
Automobile sector Summary
Enrollment no Students Name Faculty Guide 117340592155 DIPTI PREMJIBHAI GOHEL 117340592157 MAHIPAL BHARATSINH GOHIL Prof. Ritesh Khatwani 117340592158 BHOOMITA CHANDUBHAI DUDHATRA
Automobile sector Summary
East Africa’s automotive industry is getting busier as new vehicle brands enter the regional market in anticipation for the economic boom resulting from economic integration. Data by consulting company Price waterhouse Coopers (PwC) indicates that the automotive industry in Kenya and by extension the East Africa has for long been dominated by Toyota (East Africa) , Cooper Motors Corporation (CMC), General Motors (GM), Simba Colt and DT Dobie. But other vehicle brands are digging in, either establishing assembly plants here or expanding their sales network across the economic community whose market is set to expand with the independence of South Sudan, East Africa Community’s planned sixth member. For example, South Korean auto maker Hyundai Motors on Wednesday announced an investment in East Africa of up to 22 million U.S. dollars in the next three years through its subsidiary Hyundai E.A. Holdings Ltd (HEA) to support Hyundai auto sales in the regions and make it easier to access genuine Hyundai spare parts in the region. “Hyundai has been absent from East African roads for over a decade. But we consider the region as a significant market and will be making strategic investments to make Hyundai cars the leading models in the region,” said Sam Lee, its regional Marketing Director. The company opened its show room in Nairobi in January. Last week, the company partnered with a Kenyan leasing company known as Vehicle and Equipment Leasing Limited (Vaell) as part of its strategy to increase sales in East Africa. “Our study of emerging trends in the East Africa auto market found that leasing is the fastest growing new industry. As an aggressive new-car seller, we see it as an enabler and are happy to announce partnership with local leasing company,” said Lee. China’s vehicle manufacturer Foton Motor has also set eyes on the East Africa market and is now building an assembly plant in Nairobi that will supply at least 10,000 units to the region, company officials said. The new plant, which will give the company competitiveness because it means it will avoid paying 25 per cent duty if it imported fully built units, will assemble prime movers, light commercial trucks, tippers, buses, and pick-ups. The company is currently in the process of recruiting dealers across the East Africa. Availability of spare parts could be major win for the company because consumer trends here indicate that buyers go for vehicles that they know they can buy spare parts at the nearest town.
Earlier, India’s Tata Motors said it will establish a USD 12.8 million bus assembly plant in the coastal city of Mombasa to serve the East Africa market.The company had said it planned to assemble up to 60 buses a month although it was not clear if the assembly has started operations. Just like Foton, the intention is to avoid the 25 per cent duty for the buses to be competitively priced. Toyota is also another global automaker that announced last year it plans to establish an assembly plant in Kenya to serve the East Africa market. Martin Owour of the Advisory Center for Trade and Investment Policy said the race to set up assembly plants in the country will result in lower priced vehicles because of competition and avoidind the 25 per cent duty.Price is a major issue in automotive industry in East Africa and is blamed for the consumer preference to second hand vehicles that command 70 per cent of the automotive market share in East Africa according to various studies. ”The new assemblers are looking to use Kenya as the launching pad for entry into the regional common market. The fragmented economies of the five East African countries had discouraged the auto dealers from setting up assembly plants, but the common market has made it possible for the dealers to capture a region of more than 130 million residents,” said Owour in an industry analysis report. Kenya currently has three motor assemblers, Kenya Vehicle Manufacturer, the Association of Vehicle Assemblers Limited of Mombasa and General Motors East Africa. The new assemblies will complement efforts by the East African Community (EAC) to encourage setting up of automotive assembly plants. EAC industrialization strategy for 2010-2030 has identified Numerical Machining Complex (NMC), Kenya’s state-owned company that once manufactured two prototype vehicles known as Nyayo Pioneer, as a possible automotive assembly hub. The company currently manufactures some vehicle spare parts.
The Automotive industry in Kenya is primarily involved in the retail and distribution of motor vehicles. There are a number of motor vehicle dealers operating in the country, with the most established being Toyota (East Africa), Cooper Motor Corporation, General Motors, Simba Colt and DT Dobie. There are also three vehicle assembly plants in the country, which concentrate on the assembly of pick-ups and heavy commercial vehicles. The established dealers face intense competition from imported second-hand vehicles, mainly from Japan and United Arab Emirates. These imports now account for about 70% of the market. The last decade witnessed a significant decline in the number of new vehicles sold in the country. There has been a steady recovery in the last four years, but the numbers achieved still fall far short of the numbers recorded a decade ago. In 2004, the
leading motor vehicle companies recorded sales of 9,979 units. Although 27% better than the previous year, this is still well below the levels achieved in the early 1990’s. The slump in the volume of new cars sold is attributable the increased competition from second hand vehicles and the depressed economic environment. The Kenya Motor Industry Association (KMI), the representative body of the corporate participants in the motor industry, has been lobbying hard to reverse this trend. Some of these measures have helped the industry recover from its lowest point in 2000, when only 5,869 units were sold. On their part, the companies themselves have become more innovative in responding to customer needs. Some of the measures that KMI has been advocating include
1. Implementation of strict criteria on importation of second hand vehicles. 2. Incentives to promote local assembling of commercial vehicles. 3. Export incentives aimed at encouraging car manufacturers to expand operations in the region. 4. PricewaterhouseCoopers provides services to major companies in the Automotive sector in Kenya and the East Africa region.
A. Kenya is now at the beginning its own auto industry. The first national factory is Mobius Motors. B. Mobius Motors is an automaker based in Mombasa, Kenya that builds inexpensive vehicles" by integrating off-the-shelf parts within a durable and safe tubular steel frame "
AUTOMOTIVE SECTOR IN KENYA
Kenya's automotive retail and distribution sector is rapidly expanding due to infrastructure development, increasing incomes and access to credit facilities. Market overview Kenya, the economic, commercial, and logistical hub of the entire East African region and the most developed economy in Eastern Africa, is growing rapidly. The economy grew by 5.3% in the year 2012 and is projected to reach 10% growth by 2017 as the government takes steps to enhance Kenya’s economic competitiveness. The Automotive industry in Kenya is primarily involved in the retail and distribution of motor vehicles.
There are a number of motor vehicle dealers operating in the country, with the most established being Toyota (East Africa), Cooper Motor Corporation (CMC), General Motors (GM), Simba Colt and DT Dobie with Honda Motors establishing operations in Kenya in January 2013 as Division of Trans Africa Motors (TAM) which is a Dubai based company representing commercial vehicle franchises in Kenya. There are also four vehicle assembly plants in the country, which concentrate on the assembly of pick-ups and heavy commercial vehicles. 98% of all goods imported into Kenya through the Port of Mombasa and major International Airports in the country are transported by road. The growing middle class is also driving this sector with demand for small cars and major franchises’ have been set up to meet the demand, but are facing major competition from imported vehicles from Europe and far East countries by second hand car dealers. The established dealers face intense competition from imported second-hand vehicles, mainly from Japan and United Arab Emirates. These imports now account for about 70% of the market. The last decade witnessed a significant decline in the number of new vehicles sold in the country. There has been a steady recovery in the last four years, but the numbers achieved still fall far short of the numbers recorded a decade ago. The slump in the volume of new cars sold is attributable to the increased competition from second hand vehicles and the depressed economic environment. The Kenya Motor Industry Association (KMI), the representative body of the corporate participants in the motor industry, has been lobbying hard to reverse this trend. According to data from the KMI, growth in the agriculture, manufacturing and trade sectors is driving demand for pick-up trucks, which accounted for 35% of total vehicle sales in the nine-month period. Sales of heavy commercial vehicles still account for 26.8% of the market, behind pick-ups. We also believe that construction projects in the region will fuel sales in the heavier segments over our forecast period. Further growth in Kenya's construction sector is forecast over the next two years by BMI's Infrastructure team, supporting the favourable conditions for the commercial vehicle segment. The government has development plans with a total cost of US$22bn that include significant improvements to roads, railways, seaports, airports, water, sanitation and telecommunications. According to the government, Kenya is focusing on these in the hope of attracting, accelerating and retaining investors who often complain its dilapidated facilities increase the cost of doing business, rendering Kenya's products uncompetitive in the global market.
Kenya Facts and Figures 2012 Registration of motor vehicles Type of vehicle 2008 2009 2010 2011* Saloon Cars 18,686 16,930 16,165 11,026 Station Wagon 24,747 27,599 37,553 31,199 Panel Vans, pick-ups etc 8,983 7,120 6,975 7,442 Lorries/ Trucks 6,691 6,037 4,924 5,247 Buses and Coaches 1,243 1,057 1,264 1,662 Mini buses 5,206 4,483 3,600 451 Trailers 2,100 2,883 2,379 2,556 Wheeled tractors 1,262 1,115 1,161 1,179 Motor and auto cycles 51,412 91,151 117,26 140,21 6 5 Three Wheelers 704 863 1,521 2,140 Others 797 2,575 3,648 2,724 Total Units Registered 121,83 161,81 196,45 205,84 1 3 6 1
Market research of Kenya Data from the Kenya Motor Industry Association (KMI) show that while the total new vehicle market grew 10% year-on-year (y-o-y) in 2011, the Japanese earthquake and tsunami had the biggest impact on the country's larger dealers. As a result, those that the association groups as smaller dealers saw their market share increase from 6.5% in 2010 to 10%, while their sales rose 69% compared with 6.1% growth for the combined larger dealers. General Motors East Africa (GMEA) offset some of the negative impact of restricted supplies for its Isuzu truck brand, however, through its domestic production, which underlines the advantages to be gained in an increasingly competitive vehicle segment. According to data from the KMI, growth in the agriculture, manufacturing and trade sectors is driving demand for pick-up trucks, which accounted for 35% of total vehicle sales in the nine-month period.
Sales of heavy commercial vehicles still account for 26.8% of the market, behind pick- ups. We also believe that construction projects in the region will fuel sales in the heavier segments over our forecast period. Further growth in Kenya's construction sector is forecast over the next two years by BMI's Infrastructure team, supporting the favourable conditions for the commercial vehicle segment. BMI expects growth in construction industry value to remain at roughly the same level as 2010 in 2011 and 2012, with industry value reaching KES159bn (US$2.1bn) by 2012. There could also be good news on the pricing front if the Central Bank of Kenya's monetary tightening measures result in the shilling's appreciation.
BMI has previously commented on the effects of a weakening Kenyan shilling on the country's used car segment and new data show the extent of the problem, with figures not expected to improve in the short term. Data from the Kenya National Bureau of Statistics show that used car sales for the eight months to August 2011 were down 20% year-on-year (y-o-y) to 33,073 units, from 39,790 in the same period of 2010 previous year.
Dealers have reported a 30% increase since the start of 2011 in the charges associated with importing used cars, including the exchange rate against the yen and US dollar and higher freight costs. The shilling reached a record low of below KES100.0/US$ on September 26 2011, and the Central Bank of Kenya expects sustained currency volatility over the next six months. Inflation has exacerbated the situation and, according to Kwame Owino, chief executive of the Institute of Economic Affairs, this has particularly hit the middle class, which is the biggest customer base for used cars.
Domestic production is one solution to such issues and Kenya is attracting investment, particularly from Chinese companies. Commercial vehicle manufacturer BeiqiFoton Motor launched its first domestically produced trucks in June 2011, after establishing a local subsidiary in the country in late 2010. The Foton Slip Double Cab pick-up truck was assembled at the Kenya Vehicle Manufacturers facility, where it will be assembled until Foton's own plant comesonstream. As part of a growing focus on Africa by Chinese auto companies, the company is building its own vehicle assembly plant, which is scheduled to begin operations in May 2012. Chery Automobile will be the next Chinese carmaker to invest in Kenya. According to Justus Nguu, director of Chery's local franchise holder Stantech
Motors, Chery is now in negotiations with the Chinese government to secure financing of US$50mn for the Kenyan plant, which the carmaker plans to open in 2013.
MOBIOUS MOTORS History :-- The company was founded by Joel Jackson, a computer engineer who came to Kenya in 2009 to help farmers increase productivity. He decided that the most pressing barrier was the state of the transport system, saying "It became clear that the lack of appropriate transport affected many parts of rural Africa". Mobius One :-- 1. Mobius One is the company's first prototype. "Mobius One is our first prototype vehicle and represents a major step towards a safe, functional and affordable form of transport for the African market."
Mobius Two :-- 1. The second prototype, unveiled in Mid-2011. “Mobius Two is our next generation prototype. A highly affordable, functional and durable vehicle, designed and built for the African market.Mobius Two omits many non- essential features while maintaining essential functionality. It has already been driven over 2,500 Kilometres around Kenya on varied terrain and proved its rugged capability."
Features :-- 1. Tubular steel frame to reduce build and repair cost. 2. 35 cm ground clearance. 3. Rated load of 500 kg. 4. Easy and inexpensive service by using steel frame and "proven components".
KENYA MOTOR INDUSRTY
ABOUT KMI :- The KMI is the leading federation of companies in Kenya’s formal motor sector, embracing distributors of all the major vehicle marques, vehicle assemblers, component manufacturers, equipment agents, parts suppliers and many ancillary services.Its role is to mobilize and represent the sector on all commercial, industrial and related national policy issues.The KMI acts as a forum between all its members, and as a co-ordinated link with government, other associations, the media and the general public.
HONDA SETTING UP IN KENYA :-
Honda are setting up a new dealership in Kenya, with full sales, spares and service facilities. Their model range will include the Brio, CR-V and Accord. The operation will be run as a division within TransAfrica Motors (TAM), a Dubai-based industrial conglomerate that already represents four commercial vehicle franchises in Kenya, supported by Honda Motor South Africa. Premises will be on Mombasa Road, Nairobi. Although Honda has not been formally represented in this market for the past seven years, there are several hundred existing owners in this country. The new dealership will be geared to service these as well as new car buyers, and will have a special R&D department to optimize specifications for local conditions. Honda motorcycles have been a leading brand in Kenya for many decades, and the marque’s cars were first introduced here with the 1500cc Civic in the late 1970s by Hugh Lionnet of Doughty Ltd, then part of the Marshalls Group. They have since had other representatives, but this is the first time Honda Motor Company (Japan) itself has established an operation in East Africa, as part of its expansion plans for sub-Sahara. Honda EA is currently building facilities, recruiting, training and stocking. It expects to open its doors in early 2013.
Our Vision, our Dream To be the benchmark vehicle builder and mass fabricator in East Africa.
Mission, our direction To delight our customers and stakeholders by providing efficient manufacturing and
transport solutions. Core Values - Guiding Principles
Quality through standards
Customer and supplier intimacy Teamwork and individual employees participation Environmental Management Uncompromised Integrity
INCORPORATION Incorporated in Kenya as Leyland Kenya Limited on 2 nd July 1974. Through a Special Resolution of the Shareholders the Company changed its name on 16 th May, 1989 to “Kenya Vehicle Manufacturers Limited”.
SHAREHOLDING
Kenya Government 35.0%
CMC Holdings Limited 32.5% D.T.Dobie & Co (K) Ltd 32.5%
FIRST It was the first vehicle assembly plant to be incorporated in Kenya. PRODUCTION
Started production in 1976 with the first vehicle rolling off the assembly line in August, 1976. Cumulative production since inception now stands at approximately 60,000 vehicles. The plant was originally designed to produce light and heavy commercial vehicles including Land Rovers, Range Rovers, VolksWagen Microbuses, Leyland trucks and Buses. The vehicle model range produced at Kenya Vehicle Manufacturers Limited has increased over the years and now stands at 11. The range today includes Nissan Series, Mazda, Land Rover, Mercedes and Iveco.
INVESTMENT Investment in buildings and plant now stands at 4 million US Dollars. AREA
The plant covers an area of 40 acres of which 18 acres are reserved for further development. INSTALLEDCAPACITY Installed capacity is 6,600 vehicles per annum, single shift. The company undertakes contract assembly i.e the customer (distributor) buys imports and transports kits to the plant at Thika. The customer buys all special jigs and tools and provides all local content except paint, fuel, oil and consumables.
MARKET SNAPSHOT: Mixed prospects in Kenya's vehicle market
New vehicle dealers in Kenya sold 1,525 units in January-February 2012, compared with 1,775 vehicles sold during the same period of 2011, according to data released by the Kenya Motor Industry Association (KMI), reports Business Monitor International (BMI). The slump has been attributed to several factors, including the forthcoming general elections and strict measures by the government to reduce new car orders, according to CMC Motors CEO Bill Lay. In addition, sales dropped due to high interest rates, owing to the Central Bank of Kenya's measures to tighten liquidity. High interest rates had a direct affect on showroom prices of vehicles, since new vehicle sales are primarily funded by bank credit. Although data from the KMI shows that the total new vehicle market grew 10% year-on- year (y-o-y) in 2011, not all local distributors are capitalising on the trend. The growth in demand for pick-up trucks is leading to a shift in the competitive landscape. Total vehicle sales in 2012 are expected to increase by 9.42% y-o-y to 12,769 units, reaching 17,828 units in 2016.
CHINA DRIVES INTO THE KENYAN CAR MARKET
Workers toiling in the sun while tarmacking the African landscape have become synonymous with a Chinese economic push that emphasises infrastructure in its commercial dealings. The promise that to end poverty one need only build a road has become something of a slogan for China’s African engagement. Characterized by their low costs and efficiency, Chinese companies have been building roads in Africa at a frenzied pace as they offer their services in exchange for the continent’s natural riches.It is time for phase two. The newly-constructed weaving homages to Chinese
efficiency will now be complemented by trucks and cars made by China’s car giant, Chery Automobile. Car plant comes to Kenya
Last week Chery Automobile, China’s biggest motor exporter since 2002, became the second Chinese vehicle-maker to construct an automobile plant in Kenya. It joins the truck manufacturer Beiqi Foton Motors, in seeking to tap into Kenya and the regional East African market. Stantech Motors, Chery’s franchise in Kenya, is looking to make a $50 million investment in Kenya for an assembly plant to act as the focal point of Chery’s East Africa strategy. Kenya is viewed as an ideal base for the regional East African market. Hanningtone Gaya, a regional vehicle analyst based in Nairobi elaborates that: "(The delay in) lead time for orders ... has made it strategically important for automobile manufacturers targeting Africa to want a serious presence in Africa". The Chinese are renowned for their perspicacity and the cynic might suggest that China tapped into Africa’s insatiable need for infrastructure with one eye towards Chinese automobile exporters. These low-end vehicle manufacturers would then find themselves well- placed when the inevitable demand for cars arose. Chery aims to sell over 120,000 vehicles overseas in 2011, an increase of 30% on 2010.
New entry in the Kenyan automotive industry General Motors South Africa (GMSA) exported its first shipment of 60 Isuzu KB pick-ups to Kenya on 3rd of march 2012. Kenya is the latest addition to the company’s existing right- hand drive export markets of Mozambique, Zimbabwe, Zambia, Malawi and Mauritius.
The Isuzu brand is already well established in Kenya where it last year achieved a 30% share of the new light commercial vehicle market. GMSA exports manager and East Africa MD Rita Kavashe says the expansion of exports of the locally assembled Isuzu KB into key sub-Saharan Africa markets will continue to build momentum over the coming months.
“When production of the new generation Isuzu KB commences at the company’s Struandale facility next year, this will represent the first time that the vehicle will be built [locally] in both right- and left-hand drive. “This will open up new opportunities for us to export the Isuzu KB beyond our existing markets to rapidly growing countries, like Angola and Nigeria.”
Kavashe says GMSA is working closely with Isuzu Motors Company to leverage resources to “robustly grow our footprint in key markets. Key to achieving this is strengthening our distribution network, improving logistics efficiencies, ensuring that the right product portfolio is in place and providing excellent after sales support to our customers.”
Increased export volumes will ensure that the company reaches the incentive threshold under government’s new Automotive Production and Development Plan of 50 000 units a year, which comes into effect in 2013. According to the International Monetary Fund, Africa is the fastest-growing region in the world, notes Kavashe, with its gross domestic product jumping an average of 5.5% a year between 2000 and 2012, compared to a global average of 4.4%.
“We are implementing aggressive measures to ensure that we are able to grow our vehicle sales volumes as the economies in these countries grow. “With all the development happening in sub-Saharan Africa as countries improve road infrastructure, agriculture and invest in construction of new buildings, there is opportunity to sell our tough commercial vehicles in these markets,” she says. The Isuzu KB has a production history in Port Elizabeth that spans 40 years. GMSA is investing R1-billion in its three new vehicle assembly programmes, which include the Chevrolet Utility that came on stream at the end of last year, the new Spark, which will roll off the company’s production lines later this month and the sixth-generation Isuzu KB, which is set to be launched in sub-Saharan Africa during the first half of 2013.
SUPPLY CHAIN OF AUTO MOBLIE INDUSRTY
Pharmaceuticals Industry Summary
Enrollment no Students Name Faculty Guide 117340592166 MEHULKUMAR MOHANLAL JOGADIYA 117340592167 YOGESH KHIMAJIBHAI AHIR 117340592169 ANJALI RAJENDRABHAI JADIYA Prof. Ritesh Khatwani 117340592170 ROHITKUMAR JAYNATHBHAI JAYESH 117340592172 YASH JAYANTKUMAR RAVAL
Pharmaceuticals Industry Summary
Kenya spends about 8% of its GDP on health. Per capita expenditure per person stood at about US$ 11 per person in 2003. Out of this, US$ 6 came from budgetary resources, which also included donor contributions and the balance of about US $5 came mainly from out-of-pocket expenditure. This expenditure fell far below the WHO's recommended US$34 per capita.
Out -of-pocket expenditure thus accounted for 53% of the total cost of healthcare, with the remainder being Government contributions from general taxation (25%), Social Health Insurance (15%), private prepaid health plans (5%) and non-profit institutions expenditure at 2%. The above scenario means the current healthcare financing system depends mainly on out-of-pocket expenditure and therefore 75% privately financed.
The health system in Kenya is organized and implemented through a network of facilities organized in a pyramidal pattern. The network starts from dispensaries and health clinics/ posts at the bottom, up to the health centres, sub-district hospitals, district hospitals, provincial general hospitals and at the apex there is the Kenyatta National Hospital, and more recently the Moi Referral Hospital, Eldoret.
The Ministry of Health (MoH) is the major financier and provider of health care services in Kenya. Out of all the health facilities in the country, the MoH controls and runs about 52% while the private sector, the mission organizations and the Ministry of Local government runs the remaining 48%.
The public sector controls about 79% of the health centres, 92% of the sub-health centres, and 60% of the dispensaries. The NGO sector is dominant in health clinics, maternity and nursing homes controlling 94% of the total while also controlling 86% of the medical centres in the country.
In urban rural distribution, the health sector is faced with inequalities. 70% of urban population has access to health facilities within 4 km, as opposed to 30% of the rural population.
The health sector in Kenya is one of the sectors that has experienced remarkable development in the recent years. The country has made great efforts in controlling diseases like Malaria, TB and Cholera while actively fighting the AIDS/HIV pandemic. Similar efforts have been made in controlling communicable diseases like poliomyelitis, neonatal tetanus and measles. The targets for eradication of the guinea worm disease and elimination of lymphatic filariasis and leprosy have been attained. Other parasitic diseases of epidemiological concern such as schistosomiasis, helminthiasis and leishmaniasis are seriously being addressed.
The efforts at different levels to control diseases have seen the adoption of the Directly Observed Treatment Short-course (DOTS) as a national strategy in Kenya to contain Tuberculosis. The treatment success rate had improved to about 80% by end of 2003. During the same period, Kenya had attained a national zero-prevalence rate of 6.7% for its population affected by HIV/AIDS.
In order to control Emerging diseases and epidemics the government has put into place strategies that include the Participatory Hygiene and Sanitation Transformation (PHAST), Healthy Cities initiative, Hazard Analysis Critical Control Points (HACCP), water quality surveillance and occupational health strategies. The Pharmaceutical sub sector
The pharmaceutical industry consists of three segments namely the manufacturers, distributors and retailers. All these play a major role in supporting the country’s health sector, which is estimated to have about 4,557 health facilities countrywide.
Kenya is currently the largest producer of pharmaceutical products in the Common Market for Eastern and Southern Africa (COMESA) region, supplying about 50% of the regions’ market. Out of the region’s estimated of 50 recognised pharmaceutical manufacturers; approximately 30 are based in Kenya.
It is approximated that about 9,000 pharmaceutical products have been registered for sale in Kenya. These are categorized according to particular levels of outlet as free- sales/OTC (Over The Counter), pharmacy technologist dispensable, or pharmacist dispensable/ prescription only.
- National policies on healthcare and pharmaceuticals
National Health Sector Strategic Plan (NHSSP) 1999-2004
The Kenya Health Policy Framework (1994) sets out the policy agenda for the health sector up to the year 2010. To operationalize this framework paper, the National Health Sector Strategic Plan (NHSSP, 1999-2004) was developed in 1994.
The tasks specified in the plan include:
Strengthening of the central public policy role of the Ministry of Health. Adoption of an explicit strategy to reduce the burden of disease. Definition of an essential cost effective health care package. Emphasis on decentralization of health care delivery through redistribution of health services to rural areas. Special focus on essential key priority packages based on the burden of disease and the required support systems to deliver these services to Kenyans.Currently, medical care is a pre-requisite among employers; the law requires that every employer ensure the provision of proper medicines and attendance to employees, unless otherwise provided for by the government.
Policy on pharmaceuticals The patent protection of pharmaceuticals in Kenya is based on the African Regional Industrial Property Organization (ARIPO) patent system. Kenya’s patent laws have been revised from the traditional British based format to the ARIPO system, which was created by the Lusaka agreement in 1976.
ARIPO is based in Harare, Zimbabwe; the organization was mainly established to pool the resources of its member countries in industrial property matters together in order to avoid duplication of financial and human resources. Additionally, the Kenyan government passed the Kenya Industrial Property Bill in 2001. This bill allows Kenya to import and to produce more affordable medicines for HIV/AIDS and other diseases.
The National Social Health Insurance Fund (NSHIF)
The NSHIF is a proposed health scheme that seeks to waive charges at the district hospitals. The scheme is part of a wider policy reform programme initiated by the government to ensure all Kenyans have access to health care. It forms part of the economic reform strategy operating under the theme: ‘Ensuring Provision of Basic Health Package to All Kenyans and increasing Coverage of Quality Healthcare for the Poor.’ The scheme is approximated to cost Sh5 billion, targeting about 9 million poor Kenyans. The scheme is yet to be implemented, and is under review following implementation procedure and funding concerns raised by several groups that included among others, the National Nurses Association of Kenya (NNAK), the Kenya Medical Association (KMA), the Kenya National Union of Teachers (KNUT), the Central Organisation of Trade Unions (COTU) and the Federation of Kenya Employers (FKE), among others.
National Hospital Insurance Fund (NHIF)
The NHIF is Kenya's single largest financier of health services apart from the Government. It was established by an act of parliament in 1966 as a department of the MOH. In 1972, the NHIF Act was amended to incorporate voluntary membership. In 1990, the Act was repealed to allow contribution on a graduated scale of income. In 1998, the old Act was repealed and in its place is NHIF Act of 1998, which also transformed NHIF into a state corporation, delinking it from the Ministry of Health, thus ceasing to be a government department.
The fund facilitates members' access to quality health services. It works closely with public and private health care facilities countywide and professional medical associations. Currently, about 400 hospitals and health providers that offer generalized, specialised and emergency healthcare services are accredited by the Fund. The NHIF Act gives the fund power to declare/accredit hospitals where contributors can seek services.
NHIF membership is open to Kenyan residents aged 18 years and above from either the formal or the informal sectors. The formal sector membership is drawn from the government and NGOs, corporate firms etc. Members are required to pay a monthly premium of KShs 30 – KShs 320 depending on one’s basic salary.
Health Management Organizations (HMOs)
Health Management Organizations (HMOs) are health insurance agencies that provide heath facilities and services to registered members at a fee. Kenya is estimated to have about 10 large and medium sized HMOs, who between them support about 200,000 medically covered persons.
For registration, the capitalisation requirements of HMOs are Kshs 25 million for organisations that conduct total business below Kshs 250 million annually. HMOs whose annual business is over Kshs250 million need to top up their capital base at a ratio of Kshs 1 million for every Kshs 10 million of business, maintaining capitalisation at 10 per cent of collected premiums.
Traditional / herbal medicines
Traditional medicine (TM) refers to health practices, approaches, knowledge and beliefs incorporating plant, animal and mineral based medicines, spiritual therapies, manual techniques and exercises, applied singularly or in combination to treat, diagnose and prevent illnesses or maintain well-being.
In Africa, up to 80% of the population use traditional medicine for primary health care. In industrialized countries, adaptations of traditional medicine are termed “Complementary“ or “Alternative” Medicine (CAM).
The World Health Organization (WHO) launched its first ever-comprehensive traditional medicine strategy in 2002. The strategy is designed to assist countries to:
Develop national policies on the evaluation and regulation of TM/CAM practices Create a stronger evidence base on the safety, efficacy and quality of the TM/CAM products and practices Ensure availability and affordability of TM/CAM including essential herbal medicines Promote therapeutically sound use of TM/CAM by providers and consumers Document traditional medicines and remedies.WHO estimates the global market for herbal medicines to currently stand at over US $ 60 billion annually and is growing steadily.
The roles of traditional and herbal forms of healthcare are important and cannot be underestimated in Kenya’s healthcare system. The government is looking at ways to bring some practices used in traditional medicine into mainstream healthcare. Already, the government offers licenses to healers from China and India to open traditional health-care practices. 2 Industry structure
The pharmaceutical industry in Kenya consists of manufacturers, distributors and retailers, who all actively support the Ministry of Health and other key players in developing the health sector.
Manufacturers
The pharmaceutical sector consists of about 30 licensed concerns include local manufacturing companies and large Multi National Corporations (MNCs), subsidiaries or joint ventures. Most are located within Nairobi and its environs. These firms collectively employ over 2,000 people, about 65% of who work in direct production.
The industry compounds and packages medicines, repacking formulated drugs and processing bulk drugs into doses using predominantly imported active ingredients and excipients. The bulk of locally manufactured preparations are non-sterile, over-the- counter (OTC) products.
The number of companies engaged in manufacturing and distribution of pharmaceutical products in Kenya continue to expand, driven by the Government’s efforts to promote local and foreign investment in the sector.
The Kenya Medical Suppliers Agency (KEMSA), a division of the Ministry of Health, largely carries out the distribution of pharmaceutical products in Kenya. It distributes drugs to government public health facilities and private health facilities.
KEMSA has been an autonomous body since 1st July 2003. Its policy is to make available essential drugs and equipment primarily but not exclusively, to public facilities. KEMSA competes with other suppliers, e.g. the mission based medical supply facility (MEDS) and private wholesalers.
Retailers
Pharmaceutical products in Kenya are channelled through pharmacies, chemists, health facilities and shops. There are about 700 registered wholesale and 1,300 retail dealers in Kenya, manned by registered pharmacists and pharmaceutical technologists.
The drugs on sale in Kenya are sold according to the outlet categorization, which can be described as free-sales/OTC, pharmacy technologist dispensable, or pharmacist dispensable/prescription only. Health institutions
The country continues to have remarkable expansion in the number of health facilities in all provinces. This is in line with the government’s effort to avail accessible health facilities and services to all Kenyans.
The number of health institutions grew from 4,499 in 2002 to 4,557 in 2003, a marginal increase of 1.3%. Rift valley reported the highest number of health facilities, with a total of 1,267 (27.8%), while North Eastern province, with 88 health facilities had the least number, accounting for 1.9% of the total.
The World Health Organization estimates the global market for herbal medicines to currently stand at over US $ 60 billion annually and is growing steadily.
Medical Personnel
The country continues to lay emphasis on continuous training of more medical personnel to compliment the growth in the health sector. The number of registered medical personnel rose by 2.6% from 59,049 in 2002 to 60,603 in 2003. Enrolled nurses accounted for half of the registered medical personnel.
Production of pharmaceutical products
The products manufactured by the pharmaceutical companies in the country for both local and international markets include Antibiotics, Antimalarials, Antiamoebics, Analgesics, Antidiarrheals, Antacids, Tranquillisers, Antispasmodics, Vitamins and Antiulcers. These drugs are used in various medical areas including Anti-Infective, Gastrointestinal, Analgesic/Anti- inflammatory, Cardiovascular and Respiratory therapeutic segments
The pharmaceutical sector in Kenya is also engaged in assembling capsules, disposable syringes, paracetamol, and surgical gauze amongst others.
Development in production of pharmaceuticals has been enhanced by the decision by Glaxo SmithKline PLC (GSK) to license Cosmos Ltd, a Kenyan company to produce generic versions of two of its life-prolonging AIDS drugs Zidovudine and Larnivudine, as well as a combination of the two, for sale in Burundi, Kenya, Rwanda, Tanzania and Uganda. Kenya becomes the second African country after South Africa to start producing generic antiretroviral drugs in the continent. Production of these drugs by Cosmos Ltd. will start in the course of October 2004 although Glaxo SmithKline will also continue manufacturing Zidovudine and Larnivudine in Kenya
Raw material availability & Locations
Kenya has minimal raw materials for pharmaceutical products and relies a lot on imported sources. The industry imports over 95% of the raw materials. The availability of raw materials locally is limited to only about 5% of the total industrial requirements. The locally sourced raw materials include:
Maize starch Refined sugar Glucose syrup Rectified spirit and ethanol Sodium chloride Packaging materials
In efforts to increase supply, the Government has embarked on specific growth measures, which include:
Drug development from natural sources for the local industry
Continued research by institutions like Kenya Medical Research Institute (KEMRI) and the University of Nairobi on extracts from medicinal and aromatic plants. Supplementing mainstream research with herbal medicine by involving local traditional health practitioners and biomedical researchers in research processes.
NGOs and AIDS/HIV work
Kenya is estimated to have around 2.3 million adults living with HIV; with about 700 people dying daily of HIV related infections. One of the key factors affecting Kenyans is the high cost of anti-retrovirals (ARVs) and other essential medicines.
In 2001, the Kenyan parliament passed the Kenya Industrial Property Bill 2001, which greatly impacted on the health sector, allowing the importation and production of more affordable medicines for HIV/AIDS and other diseases.
The bill includes most of the WHO recommended ‘safeguards’, which include:
Parallel importing - the right to shop around the world for the cheapest patented drug Compulsory licenses - issuing licenses for the production or importation of cheaper generic medicines - the new Kenya IP Bill specifically mentions high drug prices as a ground for issuing compulsory licenses The ‘Bolar provision’ - which allows generic manufacturers to do the appropriate trials, registration process etc, to be ready to roll off the production line as soon as the patent expires.
The deadline for developing and least developed countries to amend the laws to make them WTO/TRIPS compliant is 2000 and 2006 respectively.
Market Conditions
The market for pharmaceutical products in Kenya is estimated at KShs 8 billion per annum. The government, through Kenya Medical Supplies Agency (KEMSA) is the largest purchaser of drugs manufactured both locally and imported, in the country. It buys about 30% of the drugs in the Kenyan market through an open-tender system and distributes them to government medical institutions. There are about 700 registered wholesale and 1,300 retail dealers in Kenya, manned by registered pharmacists and pharmaceutical technologists. These pharmacies are accorded a 25% mark-up on retail drugs. Anti-infective products (chiefly antibiotics, antimalarials, sulfonamides), analgesics, antipyretics, bronchial relaxants and cytotoxins account for the bulk of government and private sector purchases of medicines in the Country.
Exports Kenya enjoys preferential access to the regional market under a number of special access and duty reduction programmes related to the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) among others. The country exports its medicinal and pharmaceutical products to Tanzania, Uganda, DRC, Rwanda, Burundi, the Comoros, Ethiopia and Malawi among other destinations.
The value of Kenyan medicinal and pharmaceutical products exported increased from KShs 1.6 billion in 1999 to 2.1 billion in 2003.
Planning and National Development Imports
Control of the profession of pharmacy and the trade in pharmaceutical products is administered by the Ministry of Health (MoH), through the Pharmacy and Poisons Board, as provided for by Chapters 244 (The Pharmacy and Poisons Act) and 245 (The Dangerous Drugs Act) of the Laws of Kenya.
Kenya largely imports medicinal and pharmaceutical products from sources such as Great Britain, India, Germany, France, the USA and Switzerland. Importers are expected to meet legal requirements, which include:Provide samples to the Kenya Bureau of Standards (KEBS) for quality checks and registration Meet the regulations of the national policy, which has been adopted by the MOH. This includes an essential drugs list, using WHO guidelines, whose objective is to promote the availability of quality pharmaceutical products at affordable prices.Pass regulatory quality control, monitoring and market surveillance as stipulated by the Pharmacy and Poisons Board and the National Drug Quality Control laboratory.
Medical research & development
There are great efforts being made in the area of research and development in the field of pharmaceutical and healthcare development in Kenya.
Research institutions undertaking or supporting medical research in Kenya include Kenya Medical Research Institute (KEMRI), Kenya Industrial Research and Development Institute (KIRDI), African Medical Research Foundation (AMREF) and academic institutions like Moi University’s School of Medicine, the Medical faculty of the University of Nairobi among others
Legal & regulatory framework
The organization of Kenya's health care delivery system revolves around three levels, namely: The MoH headquarters - The headquarter sets policies, coordinates the activities of NGOs and manages, monitors and evaluates policy formulation and implementation.
The provinces - The provincial tier acts as an intermediary between the central ministry and the districts. It oversees the implementation of health policy at the district level, maintains quality standards and coordinates and controls all district health activities. In addition, it monitors and supervises District Health Management Boards (DHMBS), which supervise the operations of health activities at the district level. The districts - district level concentrates on the delivery of health care services and generates their own expenditure plans and budget requirements based on the guidelines from the headquarters through the provinces.
Other key players in the healthcare sector include the private sector, which consists of the churches, private healthcare providers, pharmaceutical companies, NGOs, and the traditional herbal medical practitioners. MOH / Pharmacy and Poisons Board role and objectives
The Ministry of Health (MoH) has the responsibility of overseeing both the pharmacies and the trade in pharmaceutical products. This is done through the Pharmacy and Poisons Board, as provided for by Chapters 244 (The Pharmacy and Poisons Act) and 245 (The Dangerous Drugs Act) of the Laws of Kenya.
Product registration is effected after a thorough evaluation of efficacy, safety and quality. As part of a national drug policy, the MoH has adopted an essential drugs list, using World Health Organization (WHO) guidelines.
Kenya, like all other developing nations adopted the ‘Alma Alta’ declaration of ‘Health for all by the Year 2000’, setting various policy measures to achieve this goal, which included the establishment of a national drug policy.
The Pharmacy and Poisons Board was established by the Pharmacy & Poisons Board Act. The Act also confers, to the Board, the right to declare an epidemic. Breaking of any of the Boards’ rules is illegal and criminal under the Act. The Pharmacy and Poisons Board ensures:
For Manufacturers:
Manufacturers register their premises The products are registered with the Board Product labelling in either English or Kiswahili Ensures Batch Number, Date of manufacture, Expiry Date and Address of Manufacture is labelled
For Pharmacists: All pharmacists have practising licenses Register their premises with the Board Employ qualified personnel Observe the laid down professional ethics.
Pharmaceutical Society of Kenya role and objectives
The society issues licenses to pharmacists, as well as ensuring the drug store managers are members of the Pharmaceutical Society of Kenya (PSK) and have sworn allegiance to the pharmacy practitioners' professional oath.
PSK equally plays the role of raising queries as and when they believe its members are committing malpractices. It ensures standards, which include:
Monitoring and advising its members on new disease control programmes
o Promotes increased quality training of pharmacy personnel
o Ensure proper distribution of pharmaceutical and non- pharmaceutical products o Compound sterile and non-sterile pharmaceutical products according to guidelines o Compound extemporaneously – that is to compound any non- sterile pharmaceutical product prepared in a single item for
patients; o Undertake pharmacy management
Kenya Medical Association role and objectives
The Kenya Medical Association, founded in 1968, is the representative body for medical doctors licensed to practice in the Republic of Kenya. Elected officials who serve on a voluntary basis run KMA. KMA’s o jectives inc ude:
To promote and uphold medical ethics and practice of medicine in Kenya. To advise the Government, other medical bodies and the general public on matters related to health and medicine.
To support Continuing Medical Education through its publications, the East African Medical Journal and Medicus, monthly seminars and scientific conferences. To maintain the honour and interests of the medical profession. To liase with other medical associations around the world.
KEMSA role and objectives Kenya Medical Supplies Agency (KEMSA) is a semi-autonomous unit in the Ministry of Health. Its policy is to make available essential drugs and equipment primarily but not exclusively, to public facilities. It is the largest purchaser of drugs in the country, through an open-tender system and distributes them to public medical institutions. The tendering system for drugs is open to both local and foreign manufacturers and distributors.
KEMSA gets its funding from the MoH, which in turn receives an annual budget from the Exchequer for drugs and medical supplies based on an estimate of national public health delivery requirements. This budget is available for payment to both foreign and local suppliers as and when required. The medical supplies comprise both proprietary and generic pharmaceutical products.
KEMSA faces the challenge competing with other suppliers, e.g. the mission based
medical supply facility (MEDS) and private wholesalers. Kenya Bureau of Standards role and objectives The Kenya Bureau of Standards (KEBS) was established by an Act of parliament, THE STANDARDS ACT, chapter 496 of the Laws of Kenya. It started its operations in July 1974. The aims and objectives of KEBS include preparation of standards relating to products, measurements, materials, processes, etc. and their promotion at national, regional and international levels; certification of industrial products; assistance in the production of quality goods; quality inspection of imports at ports of entry; improvement of measurement accuracies and dissemination of information relating to standards.
The services offered by KEBS include:
Sale of Kenya’s and foreign standards
Product certification (Issuance of Diamond Mark of Quality) Handling consumer complaints
Calibration of measuring instruments Maintenance of standards of measurements Quality inspection of imports at port of entry
ISO 9000 certification ISO 14000 Certification Training Programmes and Technical advice
Laboratory Testing Standards Development and Implementation
Standards Information Resource Centre
Quality Inspection of Imports started in Kenya on 1st July 1995 after the gazettement of Legal Notice No. 227 of 14th June 1995, while Legal Notice No. 66 of 10th jun
1999 declares all imports into Kenya which do not meet the requirements of Kenya Standards or any other standards approved by KEBS as prohibited imports. NHIF role and objectives
Apart from the government, the NHIF is Kenya's single largest financier of health services. It is a statutory social insurance fund, whose public responsibility is to provide health insurance coverage for its members and their dependents. The fund currently reimburses only in-patient care.
NHIF pays fixed rates for in-patient days, covering the bed costs. All other fees for treatment, diagnosis and pharmaceuticals have to be paid out-of-pocket by the NHIF- insured patient.
easons to invest in Kenya’s hea th and pharmaceutica industry
Kenya is one of the most stable democracies in Africa. The Government welcomes, promotes and protects private enterprise. In addition, Kenya’s competitive advantage for the health and pharmaceutical sector investment is supported by various investor friendly factors that include:
Trademark and patent protection
Kenya is a member of most major international and regional intellectual property conventions – the World Intellectual Property Organization (WIPO), the African Regional Industrial Property Organization, the Paris Convention on the Protection of Industrial Property, and the Berne Convention on the Protection of Literary and Artistic Works.
Access to the regional market
Exports from Kenya enjoy preferential access to world markets under a number of special access and duty reduction programmes. These include regional markets (EAC, COMESA), EU-African-Caribbean-Pacific/Lome Convention and the African Growth & Opportunity Act (AGOA).
Stable political climate
Kenya has been one of the very stable countries in Africa since independence. The country has had three presidents with smooth transition taking place from one government to the next and peaceful elections held regularly. This is also manifested in the number of international and regional organizations headquartered in Nairobi including the UN, IGAD etc.
Investment insurance
The Constitution of Kenya provides guarantees against expropriation of private property. In addition, capital repatriation, remittance of dividends and interest are guaranteed to foreign investors under the Foreign Investment Protection Act (FIPA) (Cap 518).
Kenya as a member of MIGA (Multilateral Investment Guarantee Agency) provides investors with an opportunity to insure their investment in Kenya against a wide range of non-commercial risks. Kenya is also a member of the African Trade Insurance Agency (ATI), a multilateral export credit and political risk agency for COMESA member states as well as the International Council for Settlement of Investment Disputes (ICSID).
Strategic location
Located on the East African coast and having the port of Mombasa, Kenya is strategically located for investors wanting to access the East and Central African market. Kenya is also a regional hub for airlines allowing for easy access from and to any part of the world. Investor friendly arrangements
The Kenya government can guarantee investor friendly arrangements such as: the Export Processing Zones (EPZ) program which offers attractive incentives to export-oriented investors and EPZ Authority to provide one-stop-shop service for facilitation and aftercare the Investment Promotion Centre (IPC) to promote all other investment in Kenya including in Manufacturing under Bond (MUB) program the Tax Remission for Export Office (TREO), a program for intermittent imports for export production Generous investment and capital allowances Double taxation, bilateral investment and trade agreements
Availability of affordable labour Kenya provides potential investors with an abundant supply of affordable labour. Kenya also has a well-trained labour force that is capable of handling all sorts of pharmaceutical procedures.
Good quality of life Kenya hosts a number of international organizations and foreign embassies and provides very good and up to standard living conditions for foreign investors wishing to reside in Kenya. With recognized international hotels, airports and entertainment centres, Kenya provides as much comfort for foreigners as in any European capital.
Investment opportunities
Opportunities for investment in the health/pharmaceutical sector in Kenya include: Manufacture of disposable surgical gloves, latex gloves and condoms. Commercial processing of traditional medicines, considering the diverse flora available in the country. Multipurpose chemical plant for bulk production of intermediate inputs such as paracetamol, aspirin, etc. Processing of locally available sugar, salt (sodium chloride) and ethanol to pharmaceutical grade for pharmaceutical industry use. Chemical plant to manufacture anti tuberculosis, anti-leprosy, antibiotic rifampicin from the penultimate state.
Manufacture of Quinine by extraction from Cinchona bark and subsequent purification and synthesis to Quinine sulphate. Extraction of Hecogenin from sisal waste and synthesis of Betamethasone from Hecogenin. Manufacture of medical supplies e.g. syringes, catheters, gauzes, etc, and medical equipment for the regional market.
Prospects for the pharmaceutical industry in Kenya Export of high quality products Increased quantity of production Expand product portfolio and intensify the search for new markets and marketing opportunities Support for medical research Ensure strict adherence to the national code of conduct and the industry’s code of practice.
Key Players in the industry Companies
The key players in the industry include MNCs like Glaxo SmithKline, Boots Pharmaceuticals, Bayer, Pfizer, Aventis, Norvatis, Astra Zeneca, Eli Lilly, Pharmacia, Roche, and local establishments like Dawa Pharmaceutical Ltd and Cosmos Pharmaceuticals among others. Institutions and collaborating agencies
Pharmaceutical Society of Kenya (PSK) Kenya Medical Association (KMA) Kenya Medical Suppliers Association (KEMSA) Kenya Association of Manufacturers (KAM) Ministry of Health (MoH) Kenya Bureau of Standards (KBS) Kenya Forestry Research Institute (KEFRI) National Health Insurance Fund (NHIF)
Telecom Sector Summary
Enrollment No Students Name Faculty Guide 117340592173 SOYABMAHAMAD ABDULGAFAR MANASIYA 117340592175 HINABEN CHANABHAI RANPARIYA Prof. Hemali Tanna 117340592176 SAGAR SHARADBHAI CHOTAI
Telecom sector – Summary
In today’s era of global business activities, we can understand that all of the countries are trying to become a global one. So they are connecting their business activities with the countries of the world. And from the earlier system of bartering the goods, monetary aspect has been synchronized and modern business system has been established.
There are majorly three kind of divisions are made according to the economy of the country i.e. developed country, developing country and under-developed country. Each under- developed countries of the world will consume the resources and become developed gradually. These African countries are coming under under-developed stage and Kenya is one of them.
The telecom services have been recognized the world-over as an important tool for socio-economic development for a nation. It is one of the prime support services needed for rapid growth and modernization of various sectors of the economy.
The Kenyan Information and Communication Technology (ICT) sector is poised for a technological explosion in future as the government is bracing itself to supply the human resources, legal structures, finance and infrastructure in order to support ICT initiatives. Also, all the technology-related equipments are readily available in the country due to the presence of distribution centers of various technology and hardware manufactures.
Expanding the scope and enhancing the quality of the telecommunications services offered to rural and urban businesses yields economic benefits far in excess of the costs incurred;
Despite major expansion of the public network during the 1980s and early 1990s, there are still un-served or underserved user requirements of major economic significance; there are large direct and indirect benefits in foreign-exchange earnings to be derived from improving telecommunications services; these benefits are particularly valuable to a country like Kenya with an economy strongly linked to international trade.
The challenges faced by the makers of telecommunications policy in Kenya are exceptionally demanding. To meet of economic needs, it will be necessary to expand the network, enhance service quality and features, and upgrade operational efficiency and productivity. Kenya has a rapidly expanding economy, but also has one of the world's highest population growth rates--by the year 2000 its population is expected to reach 38 million.
Kenya will also need to invigorate agriculture and enhance the lives of those in its rural areas to stem the tide of migration into the towns. Five million new jobs will be needed in the urban areas if the country is to avoid massive unemployment and social unrest.
The substantial net in-payments of hard currency accruing to Kenya from telecommunications carriers in other countries through the international settlements process could be used as collateral for the financing of major investments in telecommunications. This approach could help sustain the high rate of telecommunications sector investment that is clearly require--a rate that might otherwise be difficult to sustain because of the financial state of the Kenya Post and Telecommunications Corporation (KP&TC).
The history of economic development from the 1970s to the 1990s, especially the spectacular success of export-led growth in certain newly industrialized countries in Asia such as South Korea and Thailand, and the equally spectacular failure of many national economies in Africa and Asia under nationalization and central planning, makes the Kenyan case of wide interest and significance for those concerned with development strategy. The economic role of the telecommunications sector in Kenya has been the subject of significant economic and business research. Based on that research and on a series of field interviews carried out in June 1991, we have drawn several conclusions:
The fast-growing mobile sector is characterized by competition between two operators: Safaricom, a 60/40 percent joint venture between the government-owned Telkom Kenya and Britain’s Vodafone; and Celtel, a subsidiary of Africa’s third – ranked phone company. Both companies have made considerable growth and profits since their inception but still there is enormous potential remaining in the mobile phone sector.
Kenya’s internet sector has managed to grow considerably over 10 years with what started as a handful of dial-up modems in 1995 evolving into a dynamic industry with numerous internet hosts, nearly 100 licensed internet service providers (ISPs) and roughly 2.7 million internet users in the country. There is an abundance of internet cafes in the main urban centers and wireless technologies are available throughout Nairobi.
The government is now supporting several projects aimed at boosting the country’s broadband infrastructure with the most high-profile projects being the East Africa Marine System (EAMS) and the East Africa Submarine cable System (EASSY), initiatives that will connect the countries of eastern Africa via a high bandwidth fibre optic cable system with the
rest of the world. TEAMS, a multi-million dollar fibre optic cable link from Mombasa to Fujaira in the United Arab Emirates, are expected to link East Africa to the rest of the world.
Development of the Public Telecommunications Network Kenya's earliest telecommunications connections to the outside world were the submarine cables linking Zanzibar, Mombasa, and Dar-es- Salaam laid by the Eastern & South African Telegraph Company in 1888. Internally, the construction of a telegraph net work began with a 200-mile coastal line linking the port city of Mombasa with Lamu. Extension into the interior of the country began in 1896 in conjunction with the building of the railway system, forming a dual "backbone" for Kenya's communications infrastructure.
The subsequent history of Kenya's network was one of gradual but sustained expansion. By 1980, there were 73,932 direct exchange lines (DELs) in use in the public telephone network; just over 84% were connected to automatic switching equipment and 75% ha d direct long-distance dialing (STD or subscriber trunk dialing) capability. There were 1,228 telex lines in use and 50 leased data transmission circuits in use. The network of 1980 represented a solid foundation for future expansion even though it had significant shortcomings: 33% of long-distance call attempts failed due to congestion, and at any given time 15% of exchange lines were not in working order. [KP&TC Annual Reports; Tyler and Jonscher, 1982.]
The last five years has seen rapid growth due to new players entering the market, the introduction of 3G services by the telecom operators and, very recently, duty being waived on new mobile handsets and the allowance of number portability.
Major players in Kenyan market
• Beeper Communications Limited
• Broadcast Automation Technologies Ltd.
• Cellular Services (K) Ltd.
• Monier International Limited
• Telebell Limited
• Safaricom Ltd
The continuing concerns expressed by users focused mainly on the availability of service and the degree of service reliability and congestion in rural areas; specific local problems in the Nairobi industrial area (where a large amount of industrial activity takes place)
and the Jomo Kenyatta Airport area outside Nairobi; delays and unpredictability in the installation of new exchange lines and leased lines; and delays in repairing faults.
the telecommunications picture in Kenya is one of significant but uneven improvement in service quality, with the most extreme problems of service interruption being overcome in most locations (with important exceptions) and congestion, slow installation, and repair as continuing concerns. It is indicative of the significance of these problems that telecommunications difficulties figured prominently in the controversy in the early 1990s over an (unsuccessful) proposal to relocate the world headquarters of the United Nations Environment Program (UNEP) from Nairobi to Geneva.
In order to respond to today's dynamic business nature many firms have implemented enterprise resource planning (ERP) systems. ERP can be defined as a large - scale information system that integrates all business functions into one unified function.
Companies are realizing that they have to implement ERP in order to remain competitive.
This research project sought to identify and understand the factors affecting such implementation in Telecommunication firms in Kenya, focusing on a case of Telkom Kenya.
PHENOMENAL MOBILE PHONE GROWTH
In 2000, some 180,000 Kenyans had access to a mobile phone. Bye the end of 2006 that figure had grown to 7.3 million people – an increase of more than 4000 %.
The fast-growing mobile sector is characterized by competition between two operators: Safaricom, a 60/40 percent joint venture between the government-owned Telkom Kenya and Britain’s Vodafone; and Celtel, a subsidiary of Africa’s third – ranked phone company. Both companies have made considerable growth and profits since their inception but still there is enormous potential remaining in the mobile phone sector. In March 2007, global telecommunications giant Ericsson opened a regional hub in Nairobi as part of its ongoing emerging markets expansion programmed. The mobile phone sector currently accounts for 5 percent of Kenya’s GDP and analysis show the sector as holding great potential for further growth once a third mobile phone services operator is introduced and mobile phone taxes are lowered.
Accordingly, the Department of Telecom has been formulating developmental policies for the accelerated growth of the telecommunication services. The Department is also responsible for grant of licenses for various telecom services like Unified Access Service Internet and VSAT service. The Department is also responsible for frequency management in the field of radio communication in close coordination with the international bodies. It also enforces wireless regulatory measures by monitoring wireless transmission of all users in the country.
Kenya side said that the site will have been identified by end of October 2010. The national coordinator has already been identified and the contact details will be conveyed. All the equipment has been received and cleared by Kenya ICT Board. The equipment will be dispatched to the identified sites for installation. ICT Board will cooperate with TCIL in establishing a call center for the agricultural sector to revolutionalise flow of information benefitting farmers immensely and also creating a database for other organizations.
Kenya had initiated an MOU for cooperation in some of the areas discussed during the 5th JTC. The Indian side will respond so as to fast track implementation especially in areas of capacity building.
There is unlimited discretion on the appointment of the members, whose terms of appointment are set out in an individual letter of appointment. The government will continue to have a controlling ownership of TKL and it is the duty of the Ministry of Finance representative in the CCK to safe-guard that interest. Government ownership of the dominant player in the sector may be viewed to be in conflict with independence in decision-making in actions against the commercial interest of TKL.
Results not satisfactory due to
Actual revenue realizations far short of projections leading to operators being unable to arrange finance for their projects and complete rollouts.
Government appreciates the concern of the operators and allows for mid-course corrections.
This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provides easy market access for telecom equipment and a fair regulatory framework for offering
telecom services to the Indian consumers at affordable prices. Presently, all the telecom services have been opened for private participation. The paper examines the changing landscape of telecom sector in the terms of challenges and opportunities.
The growth of India as a knowledge based economy will not be possible without the growth and expansion of the Indian telecommunications and IT sectors. This symbiotic relationship is not lost on the government which has attempted to back the telecommunications sector by fostering an encouraging regulatory scenario. This has not only helped the telecommunications sector to evolve in a dynamic manner but has enabled it to attract foreign investments.
The Government of Kenya has embarked on a series of initiatives to revitalize and transform the economy into a modern market-oriented one. The aim is to improve the economic well being of Kenyans by establishing Kenya, in the medium term, as the centre of industrial and financial activities in the region.
TELEPHONES - MOBILE CELLULAR PER CAPITA comparison with India
This entry gives the estimated number of mobile phone lines per 100 people. It is also known as the mobile phone penetration rate.
2001 2003 2005
India 0.29 2.49 6.32
Kenya 1.76 5.03 13.63
2006 2007 2009
India 25.79 31.07 64.1
Kenya 18.73 30.99 64.02
70
60
50
40 India 30 Kenya
20
10
0 2001 2003 2005 2006 2007 2009
TELEPHONES - MAIN LINES IN USE PER CAPITA COMPARISION WITH India
This entry gives the estimated number of fixed telephone lines per 100 people.
2000 2003 2005
India 2.73 4.66 4.61
Kenya 1.01 1.04 0.83
2008 2009 2010
India 3.38 3.24 2.99
2.30 Kenya 0.72 1.18
5
4.5
4
3.5
3
2.5 India Kenya 2
1.5
1
0.5
0 2000 2003 2005 2008 2009 2010
The sector policies aim to define the framework within which telecommunications and postal services will be provided. The overall Government objective for the sector is to optimize its contribution to the development of the Kenyan economy as a whole by ensuring the availability of efficient, reliable and affordable communication services throughout the country.
Kenya's telecom market has had great potential for growth because of its previous low penetration levels in both fixed and mobile markets.
2004 saw significant changes in the country's telecom industry, with the incumbent operator Telkom Kenya losing its monopoly in the fixed-line and internationals bandwidth sectors. Licenses were also issued to a regional carrier, third mobile operator and several new data carriers, thereby marking a significant change in the competitive landscape for telecom services across the country.
The last five years has seen rapid growth due to new players entering the market, the introduction of 3G services by the telecom operators and, very recently, duty being waived on new mobile handsets and the allowance of number portability. There is currently no significant export of ICT products and services. However there are several start-ups who have successfully tapped into the outsourcing industry, primarily call centers, business process and data entry, and this area seems to have great potential for growth in the medium and long term. Mecer, a South African computer manufacturer, has set up its regional assembly plant of desktop computers in Kenya. This plant exports 50 per cent of its output to other countries in the greater East African region. Finally a lot of imported ICT equipment, especially mobile phone handsets, is re-exported to the neighboring countries – however with no value addition taking place in Kenya.
Political risk
There are no perceived political risks in the ICT industry in Kenya. The current government and any likely future governments are bound to value to potential ICT brings to the private and public sectors. Besides developing the 2006 Kenya ICT Strategy and pushing for the implementation of the ICT act, the government has committed itself to digitize its operations by 2008, e.g.
Regulatory framework
The establishment of Communications Commission of Kenya (CCK) as the regulatory body provides an investor with a one-stop body for registration and facilitation thus reducing bureaucracy. The regulation of the sector and granting of licenses remain the responsibility of CCK.
India has begun a process of telecom reform without any coherent long term plan. For the benefits to be available to the economy a number of actions would have to be taken, viz., separation of policy and operation, corporatization of at least some divisions of telecom service, and implementation of a long term training policy and monitoring systems to ensure fair access to the network. Ad-hoc nature of the reform process would lead to minimal benefits and at times may be dysfunctional. The speed of implementation of reforms needs to be accelerated. Implementation of many of these suggested measures may require strong political will and a concerted effort. This paper highlights the role of political will and employees concerns in implementing reforms and the need for top management in addressing them. A well laid out plan for reform is likely to bring greater success and remove uncertainty from investors and employees and bring in support for the reform process.
FUTURE OPPORTUNITIES
Kenyan government drives to develop the sector through improved policy and supportive regulation that encourages private public partnerships and increased ICT investments. Public sector spending in ICT running in the region of USD I.0 BN over 5 years in various areas including connectivity, & national broadband investments government automation, R& D and capacity development. Kenya’s growing role as the Africa’s hub for ICT investment. Kenya’s market size sits at USD 2.5bn in 2012 growing to 4.5Bn in 2017. Kenya’s flagship investment of Konza technology city will undertaken as a 20 year PPP worth USD 8bn development of 6M sq meters of development to cement Kenya’s role as Africa’s silicon savannah. Site sits on 5,000 acres developed in 4 phases over 20 years Kenya intends to be the leader in Africa Global ITES market by creating 200,000 Jobs in ITEs across BPO, IT Software development, business services Current ICT and related graduates in Kenya sit at 20,000 growing to 50,000 a year by 2012. Kenya is already the hub for international IT investors in marketing and now R&D
Kenya provides investment opportunities in the ICT sector targeting both local and export markets. As a regional hub and a financial capital of the East and Central Africa region, Kenya’s Competitive advantage as an ICT investment destination is supported promising investor friendly competitiveness factors that include:- Regulatory Framework
Communications Commission of Kenya (CCK) - the telecommunications regulatory body is responsible for facilitating the development of the information and communications sectors (including broadcasting, multimedia, telecommunications and postal services) and electronic commerce. This responsibility entails:
Licensing all systems and services in the communications industry, including telecommunications, postal/courier and broadcasting.
Managing the country’s frequency spectrum and numbering resources,
Facilitating the development of e-commerce.
Type approving/accepting communications equipment meant for use in the country
Protecting consumer rights within the communications environment.
Investment insurance This provides potential investors with insurance for their investment in Kenya against a wide range of non-commercial risks. Strategic location Located on the East African coast and having the port of Mombasa, Kenya is strategically located for investors wanting to access the East and Central African market. Kenya BPO market A port that is served by an overland road network and railway feeding into Uganda, Tanzania, Rwanda, Ethiopia and Sudan.
Recent economic growth has been supported by a significant increase in development spending by government on energy and infrastructure – a 120% CAGR increase between 2002 and 2005. This has been complemented by ongoing investments in social services, housing and community welfare, agriculture, mining, construction and manufacturing.
Growth has further been fuelled by significant investment on the part of Kenyans themselves –capitalization of the Nairobi Stock Exchange has grown by 31% CAGR since
2001. This indicates there is significant investment appetite and capital available in Kenya, and successful partnerships with international firms will create value for all parties.
COCLUSION
Indian telecom industry continued to register significant growth in 2008-09. Indian Telecom network with about 414 million connections in February 2009 is the third Largest in the world, while it is credited with the second largest wireless network in the World (see below section on Mobile Telephony for details). At the current pace, the target of 500 million connections by 2010 is well within reach. The Government of India has reiterated its commitment to reach out to remote and uncovered areas and to augment broadband facilities in rural areas.