Dr. Mary Amuyunzu-Nyamongo Ms. Alice Sereti Sinkeet& Mr. Gabriel Oguda. African Institute for Health & Development (AIHD)

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1 Dr. Mary Amuyunzu-Nyamongo Ms. Alice Sereti Sinkeet& Mr. Gabriel Oguda African Institute for Health & Development (AIHD)

2 A decline in the demand for Kenyan exports Collapse of external institutions with links to Kenyan banks and other monetary institutions Decline in remittances as disposable incomes decline in the countries experiencing global recession Decline in tourism revenue through postponement and cancellation of bookings Source: Nyangito (January 2009)

3 Reduced value of exports and increased cost of imports Depreciation of the Kenya shilling against the US dollar with adverse implications on transaction costs A fall in the stock markets A decline in international aid to the country and to non-governmental organizations

4 Kenya s GDP recorded a major decline in 2008 of 1.6% due to three adverse shocks: effects of the global economic downturn which depressed Kenya s main export markets the erratic, delayed and shorter rainfall had a negative impact on the agricultural and energy sectors the prolonged effects of the 2008 post-election violence depressed investor confidence and had adverse effects on the whole Kenyan economy and population

5 There was a rise in October 08 and slumped in Nov Dec 2008 The sources are North America 52% and Europe 30% The pick up in April 2010 indirectly attributed to improving economic conditions in the source regions, and improved prospects for economic recovery at home SOURCE: COMMENTARY ON REMITTANCES FOR APRIL 2010 MR. CHARLES GITARI KOORI, DIRECTOR RESEARCH DEPARTMENT

6 Inflation is closely linked to GDP growth Some of the effects of high inflation included high cost of food

7 Restoring investor confidence Expansionary fiscal policy (e.g. establishing an economic stimulus package) Monetary policy focusing on achieving and maintaining price stability within a single digit inflation rate of 5.0% The budget, with a focus on infrastructure and business, is aimed at job creation as a measure of addressing poverty

8 Data were collected in four sites with a total of 11,845 households: Tana River (July October 2010): 5,882 (poverty level at 72%) Murang a Local Authority: 2,286 (39% below the poverty line) Kilifi Local Authority: 2,649 (65% of the people classified as poor) Kisumu Local Authority: 1,028 (48% live below the poverty line)

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10 Few households received remittances Substantial declines experienced in Murang a, Kilifi and Kisumu Source: CBMS data ( )

11 Source: CBMS data ( )

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14 Source: CBMS data ( )

15 Source: CBMS data ( )

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18 The study population was not engaged in any major export activity that could expose them to inflation and currency depreciation The impact on tourism was not felt directly mainly due to the location of the four sites - although Kisumu and Kilifi are tourist destinations, the study communities were removed from the mainstream activities Most of the households engaged in this study did not have savings either in bank accounts or in the form of shares therefore they were cushioned from the impact on the stock market

19 Decline in remittances, for affected households, led to high levels of food shortage (especially Kilifi), borrowing and reduced expenditure on healthcare, education and clothing Loss of jobs had effects on the households affected in terms of food shortages, limited access to healthcare, education and clothing Access to Government programmes, apart from food relief in Tana River, was also limited

20 Government should invest in poor areas to create employment opportunities and provide alternative coping strategies during shocks The country has an array of poverty mitigation funds through devolved funding, which do not seem to reach the people there is need to refine targeting mechanisms The implementation of the National Social Protection Policy would mitigate the impacts of shocks on the poor and vulnerable

21 THANK YOU