2011 / 2012 Republic of Kenya Priority Value Chain Analysis Study in Selected Districts Kenya Youth Employment Regional Programme 2011 / 2012 Priority Value Chain Analysis Study in Selected Districts Kenya Table of Content Abbreviations and Acronyms ii Foreword iv Acknowledgements v Executive Summary vi Chapter 1: Introduction 1 1.1 Background Information 1 1.1.1 Situational Analysis 1 1.1.2 Situation of Youth at National Level 2 1.1.3 District/ Constituency Level Statistics and Current Engagements 4 Chapter 2: Problems Confronting the Youth and Proposed Resolution Efforts 9 2.1 Problem and Justification 9 2.2 Study Objectives 10 2.3 Resolution Mechanisms 11 Chapter 3: Methodological Approach 14 3.1 The Evaluation Framework 14 3.2 Interrogation of the Value Chains 19 Chapter 4: The Value Chain Analyses Results and Discussions 26 4.1 Formation of the Value Chain Clusters: 26 4.2 The Generic Value Chain Mapping Outcomes 35 4.3 Engagement Options or Business Cases 36 Chapter 5: Articulation of The Youth Engagement Options 38 5.1 Detailed presentation of the youth engagement options 39 5.2 Skills Gap in the 24 Selected Constituencies 41 Chapter 6: Conclusions And Recommendations 44 6.1 Conclusions 44 6.2 Recommendations 45 References 47 Annex 48 Quantification and Costing of a Model 48 i Priority Value Chain Analysis Study in Selected Districts Kenya Abbreviations and Acronyms AGRA Alliance for a Green Revolution in Africa AIDS Acquired Immune Deficiency Syndrome ASAL Arid and Semi Arid Land BAACH Business Alliance Against Chronic Hunger BDS Business Development Services CDA Constituency Development Association CDF Constituency Development Fund DDP District Development Plan DVO District Veterinary Officer DYO District Youth Officer EPZ Export Processing Zone ESP Economic Stimulus Programme FAO Food And Agricultural Organization of the United Nations FGD Focus Group Discussion FTC Farmers Training Centre GDP Gross Domestic Product GOK Government of Kenya Deutsche Gesellschaft für Technische Zusammenarbeit GmbH GTZ (German Agency for Technical Cooperation) HCDA Horticultural Crops Development Authority HIV Human Immunodeficiency Virus ICT Information Communication Technology IFAP International Federation of Agricultural Producers ILO International Labour Organization IMF International Monetary Fund JK Jua Kali KARI Kenya Agricultural Research Institute KCPE Kenya Certificate of Primary Education KCSE Kenya Certificate of Secondary Education KEBS Kenya Bureau of Standards KENFAP Kenya National Federation of Agricultural producers KEPHIS Kenya Plant Health Inspectorate Services KEPSA Kenya Private Sector Alliance KIE Kenya Institute of Education KIPI Kenya Industrial Property Institute KIRDI Kenya Industrial Research Institute KNBS Kenya National Bureau of Statistics KNEC Kenya National Examination Council KSL KENFAP Services Limited LRA Long Rains Assessment MDG’s Millennium Development Goals ii Priority Value Chain Analysis Study in Selected Districts Kenya MIG Metal Active Gas Welding MoA Ministry of Agriculture MoE Ministry of Education MoEST Ministry of Higher Education, Science & Technology MoL Ministry of Labour MoL&F Ministry of Livestock and Fisheries MoTR Ministry of Trade MoW Ministry of Water MoYAS Ministry of Youth Affairs and Sports MP Member of Parliament NEMA National Environment Management Authority NEP North Eastern Province NGO Non-Governmental Organization NYS National Youth Service PDYA Provincial Director of Youth Affairs PHO Public health Officer SMEs Small and Medium Enterprises Stichting Nederlandse Vrijwilligers (Netherlands Development SNV Organization) SWOT Strength Weaknesses Opportunities and Threats UN United Nations UNDP United Nations Development Programme UNEP United Nations Environment Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNICEF United Nations Children’s Fund UNV United Nations Volunteers USAID United States of America for International Development VC Value Chain VSO Volunteer Service Organization (United Kingdom) VTC Vocational Training Center WEDF Women Enterprise Development Fund YEC Youth Empowerment Centre YEDF Youth Enterprise Development Fund YEF Youth Enterprise Facility YERP Youth Employment Regional Programme iii Priority Value Chain Analysis Study in Selected Districts Kenya Foreword enya’s economy can gain great benefits from the “youth bulge”. This can be achieved by investing in the right sectors with high potential for job creation. The Kcountry currently has a high proportion of 15-to-29 year olds relative to the adult population. According to recent studies, a large youth bulge can both have a positive impact on a country’s economy, being a vital resource which can be tapped to promote its development, and a negative impact due to its associated problems such as high unemployment rates, idleness and likelihood of misuse. Although effort by Governments and other stakeholders in addressing these issues have been put in place, more still needs to be done towards poverty alleviation and the youth unemployment situation. In view of this realization, the UNDP/Regional Programme for Social Cohesion and Youth Employment (YERP) funded by the Spanish cooperation commissioned this study to investigate the existing value chains and to identify those with the highest potential to maximize economic growth and youth absorption. In order to obtain this result, a value chain analysis was conducted in 24 economic constituencies in Kenya with the objective of identifying the two lead sectors in each constituency. The applied criteria to select the lead sectors were the following: quick return on investment, market availability, growth potential, availability of skills required and supportive services locally, business and employment opportunities for the youth. The report selected eleven lead categories of value chains. Along the various stages of the selected value chains, twenty one entrepreneurial possibilities were identified in the form of constraints, resolution mechanisms or uptake of opportunities. The majority of the identified priority value chains are agricultural based. At the same time the entrepreneurial possibilities are mainly focused on transformation of the goods, a largely missing aspect of African agricultural sector. The report furthermore indicates that pre-inception physical investments requirements, supportive services and infrastructure are key factors to fast track realization of the identified entrepreneurial options. The report concludes that clear possibilities for absorption of youth exist in the rural setup of Kenya, but lots of efforts and resources are required to release those potentialities for up take. Although grants will be necessary to initiate the adoption of engagement possibilities, the report’s findings cast light on the existence of devolved funds and competing financial products as a clear possibility for investments and as an alternative to grants. Aeneas C. Chuma Resident representative United Nations Development Programme, Kenya iv Priority Value Chain Analysis Study in Selected Districts Kenya Acknowledgements his report was prepared with the support and generous contribution of the youth and rural communities, Government departments and the private sector Tamongst other organizations. My sincere appreciation goes to the Resident Representative, Mr. Aeneas C. Chuma for his leadership and to other UNDP staff who supported the study. Specifically, I wish to register my sincere appreciation Boniface M. Kitili (UNDP-Programme Analyst) for coordinating the study and providing the much needed guidance and technical inputs to the draft reports. I also wish to thank Ms. Couty Fall, the Coordinator for the Regional Programme for Social Cohesion and Youth Employment (YERP) and her team for providing the back-stopping support services while in Dakar-Senegal. Special recognition goes to Dr. Dinah C. Mwinzi (Director-Youth Training) for co- coordinating the study with UNDP and to Isaac Odek (Principal Youth Training Officer) and Provincial Directors of Youth Affairs and Sports for linking the consultants with key respondents. The field coordination and other logistics were provided by District Youth Training Officers in the respective districts. I therefore take this opportunity to thank them and the youth leaders for guiding the process at the at the grassroots level. The financial support by the United Nations Development Programme (UNDP)/ Regional Programme for Social Cohesion and Youth Employment (YERP) funded by the Spanish Cooperation demonstrates the importance UNDP and the Spanish Cooperation has placed on developing viable options with a special focus on the youth and women in this country. I therefore wish to commend UNDP and the Spanish Cooperation for supporting this study which will inform the design and implementation of viable economic options in this country. Finally to the Kenya Agricultural Federation of Agricultural Producers (KENFAP) for undertaking this study Thank you all. Mr. James M. Waweru, CBS Permanent Secretary Ministry of Youth Affairs and Sports v Priority Value Chain Analysis Study in Selected Districts Kenya Executive Summary he priority value chain analysis study aimed at accomplishing several objectives in line with youth engagement. Such engagement may fall into employment, business and entrepreneurial opportunity creation or actual participation in some chain based Tactivity. The study was conducted in 24 selected political constituencies in Kenya as guided by several objectives