ABBREVIATIONS ACP African, Caribbean and Pacific AEAF Aureos East Africa Fund AERC African Economic Research Consortium AFD L'Agence Française de Développement AI Avian Influenza (bird flu) ALRMP Arid Lands Resource Management Programme ANC Ante-Natal Care APR Annual Progress Report APRM African Peer Review Mechanism ARSP Agricultural Research Support Programme ASALs Arid and Semi-Arid Lands ASCU Agricultural Sector Coordination Unit AU/IBAR African Union/Inter-African Bureau for Animal Resources BCP Biodiversity Conservation Programme BOT Balance of Trade BoT Board of Trustees BPI-K Business Partners International - Kenya CBK Central Bank of Kenya CBO Community-Based Organisation CBP Capacity-Building Programme CCM Country Coordinating Mechanism CDE Centre for the Development of Enterprise CDEMP Community Development for Environmental Management Programme CDP Community Development Programme CDTF Community Development Trust Fund CEF Community Environment Facility CEO Chief Executive Officer CEP Country Environmental Profile CET Common External Tariff CMAP Collaborative Masters Programme in Economics for Anglophone Africa COMESA Common Market for Eastern and Southern Africa CPIA Country Policy and Institutional Assessment CPP Collaborative PhD Programme in Economics CSOs Civil Society Organisations CSP Country Strategy Paper CTA Centre for the Development of Agriculture DANIDA Danish International Development Agency DBR Domestic Budget Revenue DCF Drought Contingency Fund DFID Department for International Development (UK) DGSP Democratic Governance Support Programme DHSSDP District Health Services and Systems Development Programme DMI Drought Management Initiative DRI Debt Relief International DS Debt Sustainability DSA Debt Sustainability Analysis EAC East African Community EADB East African Development Bank EC European Commission ECHO European Commission Humanitarian Aid Office ECK Electoral Commission of Kenya EDF European Development Fund EFA Education For All EIA Environmental Impact Assessment EIB European Investment Bank EIDHR European Initiative for Democracy and Human Rights EMCA Environmental Management and Coordination Act EPA Economic Partnership Agreement ESA Eastern and Southern Africa EU European Union FDI Foreign Direct Investment FIDA International Federation of Women Lawyers FMO Framework of Mutual Obligations FP Financing Proposal FPE Free Primary Education FTI Fast Track Initiative FY Financial Year GAA German Agro-Action GAVI Global Alliance for Vaccines and Immunisation GBS General Budget Support GDP Gross Domestic Product GER Gross Enrolment Ratio GFTAM Global Fund to Fight Tuberculosis, AIDS and Malaria GJLOS Governance, Justice, Law and Order Sector GNI Gross National Income GNP Gross National Product GoK Government of Kenya GTZ Gesellschaft für Technische Zusammenarbeit HAC Harmonisation, Alignment and Coordination HDI Human Development Index HIPC Heavily Indebted Poor Countries HIV/AIDS Human Immuno-deficiency Virus/Acquired Immune Deficiency Syndrome HMIS Health Management Information Systems HPAI Highly Pathogenic Avian Influenza HQ Headquarters ICAP Investment Climate Action Plan ICRC International Committee of the Red Cross and Red Crescent ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation IFMIS Integrated Financial Management and Information System IGAD Inter-Governmental Authority on Development IMF International Monetary Fund IOM International Organisation for Migration IP-ERS Investment Programme for Economic Recovery Strategy IPO Initial Public Offer IRAI IDA Resource Allocation Index IXGS Imports and Exports of Goods and Services JAOR Joint Annual Operational Review JFE Joint Facility for Electives JRES Joint Review of the Education Sector KARI Kenya Agricultural Research Institute KASAL Kenya Arid and Semi-Arid Lands KBI Kenya Bribery Index KCA Kenya Community Abroad KDHS Kenya Demographic and Health Survey KenGen Kenya Electricity Generating Company Limited KeNHA Kenya National Highways Authority KENYA COUNTRY STRATEGY PAPER/NATIONAL INDICATIVE PROGRAMME, 2008-2013 ii KEPHIS Kenya Plant Health Inspectorate Service KEPLOTRADE Kenya/European Union Post-Lomé Trade Programme KeRRA Kenya Rural Roads Authority KES Kenya Shilling KESSP Kenya Education Sector Support Programme KfW Kreditanstalt für Wiederaufbau KIPPRA Kenya Institute for Public Policy Research and Analysis KJAS Kenya Joint Assistance Strategy KNA Kenya National Assembly KNCHR Kenya National Commission on Human Rights KPA Kenya Ports Authority KPLC Kenya Power and Lighting Company KR Kenya Railways KRA Kenya Revenue Authority KRB Kenya Roads Board K-REP Kenya Rural Enterprise Programme KTB Kenya Tourism Board KURA Kenya Urban Roads Authority LATF Local Authorities Transfer Fund LRC Law Reforms Commission LTDS Long-Term Debt Sustainability Indicators LVFMP Lake Victoria Fisheries Management Plan M&E Monitoring & Evaluation MCM Matrix of Corrective Measures MDF Management Development Foundation MDG Millennium Development Goal MEFMI Macroeconomic & Financial Management Institute of Eastern and Southern Africa MENR Ministry of the Environment and Natural Resources MESPT Micro-Enterprise Support Programme Trust MFIs Micro-Finance Institutions MoALD Ministry of Agriculture and Livestock Development MoCM Matrix of Corrective Measures MoRPW Ministry of Roads & Public Works MoT&C Ministry of Transport and Communications MoTI Ministry of Trade and Industry MPs Members of Parliament MS Member States (of the EU) MSEs Micro- and small enterprises MTAP Meteorology Transition Africa Project MTEF Medium-Term Expenditure Framework MTR Mid-Term Review NACC National Aids Control Council NAO National Authorising Officer NARC National Rainbow Coalition NCRP Northern Corridor Rehabilitation Programme NDCF National Drought Contingency Fund NDF Nordic Development Fund NEAP National Environmental Action Plan NEMA National Environment Management Authority NER Net Enrolment Ratio NGO Non-Governmental Organisation NHSSP National Health Sector Strategic Plan NIP National Indicative Programme NLP National Land Policy NPV Net Present Value NSAs Non-State Actors KENYA COUNTRY STRATEGY PAPER/NATIONAL INDICATIVE PROGRAMME, 2008-2013 iii ODA Official Development Assistance ODL Open and Distance Learning OVC Orphans and Vulnerable Children PACE Pan-African Programme for the Control of Epizootics PCM Project Cycle Management PEC Poverty Eradication Commission PEM-AAP Public Expenditure Management - Assessment and Action Plan PFM Public Financial Management PIP Pesticide Initiative Programme PMU Project Management Unit POPs Persistent Organic Pollutants PRBS Poverty Reduction Budget Support PRGF Poverty Reduction and Growth Facility PRSP Poverty Reduction Strategy Paper PS Permanent Secretary PSD Private-Sector Development PTA Preferential Trade Area PV Present Value RBM Results-Based Management RIFF Regional Integration Forum Facility RIP Regional Indicative Programme RMLF Road Maintenance Levy Fund RPR&LGSP Rural Poverty Reduction and Local Government Support Programme SEA Strategic Environmental Assessment SERECU Somali Ecosystem Rinderpest Eradication Coordination Unit SES Somali Ecosystem SIDA Swedish International Development Authority SMEs Small and Medium-sized Enterprises SRA Strategy for Revitalising Agriculture SSP Support Services Programme STABEX Stabilisation of Export Earnings SWAP Sector-Wide Approach TA Technical Assistant/Assistance TB Tuberculosis TCF Technical Cooperation Facility TISMPP Tourism Institutional Strengthening and Market Promotion Programme TIVET Technical, Industrial, Vocational and Entrepreneurship Training TSC Teachers Service Commission TTF Tourism Trust Fund TWGs Technical Working Groups UK United Kingdom UN United Nations UNDP United Nations Development Programme UNICEF United Nations Children’s Fund UPE Universal Primary Education US United States USAID United States Agency for International Development USD United States Dollar VOC Vehicle Operating Costs VSO Volunteer Service Overseas WB World Bank WPCE Work Plan and Cost Estimate WTO World Trade Organisation KENYA COUNTRY STRATEGY PAPER/NATIONAL INDICATIVE PROGRAMME, 2008-2013 iv TABLE OF CONTENTS ABBREVIATIONS .......................................................................................................................................i SUMMARY................................................................................................................................................vii PART 1 THE COUNTRY STRATEGY PAPER ...................................................................................... 1 1. FRAMEWORK FOR RELATIONS BETWEEN THE EC AND KENYA .......................................... 1 1.1. General objectives of the EC’s external policy ............................................................................... 1 1.2. Strategic objectives of cooperation with the Republic of Kenya .................................................... 1 1.3. Main bilateral agreements ............................................................................................................... 2 2. COUNTRY DIAGNOSIS...................................................................................................................... 3 2.1. Analysis of the political, economic, social and environmental situation ........................................ 3 2.1.1. Political and institutional situation ........................................................................................