Results_Framework_Public_Document.pdf

USAID/KENYA’S NEW

COUNTRY DEVELOPMENT COOPERATION STRATEGY (CDCS)

“The journey towards the transformation of our country has begun … we must not turn back. We must keep our eye on the goal of building a great Kenya for us, our children and the future generations.” Former President Kibaki (December 2012 – National Day Speech)

INTRODUCTION

The United States and Kenya have enjoyed a close relationship over the past 51 years, providing a unique platform for achieving our common development, diplomatic, economic and security objectives. Kenya is a critical country for President Obama’s new strategy for sub-Saharan Africa, and for U.S. Government (USG) and U.S. Agency for International Development (USAID) initiatives in key areas such as food security, trade, climate change, maternal and child health, HIV/AIDS, malaria, education, biodiversity, and energy. Our partnership goes beyond Kenya, including cooperation on countering extremism emanating out of Somalia, building resilience to drought emergencies throughout the Horn of Africa, and supporting Kenya’s leadership in African regional organizations such as the East African Community.

With the historic 2013 elections declared free and fair, Kenya now faces a critical five-year time period in which to implement a broad array of difficult and complex reforms. These include a comprehensive devolution of power and authority under the new Constitution; economic reforms to accelerate growth, create jobs, reduce corruption and poverty, and expand domestic and international markets; and building sustainable systems to ensure that all its citizens are healthy and educated, with the skills and knowledge to effectively participate in the transformation of the country’s economy and governance.

Such transformational change requires USAID to adopt a new business model in Kenya for implementing its next five year country strategy for the period FY 2014-2018.1 The Country Development Cooperation Strategy (CDCS) will employ a model in which our partnerships are more strategic, mature and mutually accountable; in which we pursue new and innovative alliances with the private sector and other development partners to leverage resources, impact and expertise; in which Kenyan leadership is at the forefront of the country’s development agenda; and in which we apply USAID Forward2 and collaborative learning approaches to adapt and respond to change.

However, the development context in Kenya remains fragile and marked by numerous complex challenges. These include a poor enabling environment for economic growth; half of the population lives in poverty with limited access to basic services; chronic drought and food insecurity; stubbornly high maternal and under-five mortality rates; weak rule of law and high

1 FY 2014‐2018 refers to the period October 1, 2013 – September 30, 2018.

2 USAID’s institutional reform—USAID Forward— aims to strengthen USAID’s core competencies and elevate its role as a premier development agency. It focuses on seven areas: policy capacity; budget management;

monitoring and evaluation; innovation; science and technology; local capacity; and talent management.

levels of corruption; natural resource degradation; and a growing youth population with limited employment options putting pressure on social services systems.

GOAL

The proposed Kenya CDCS Goal is: Kenya’s Governance and Economy Sustainably Transformed. Working within the framework of Kenya's Vision 2030 and its 2013-17 Medium Term Plan, the Mission believes that this is an achievable goal.3 It is also consistent with the objectives of the USG Policy Directive for sub-Saharan Africa, the Joint Regional Strategy of the Bureau of African Affairs of the U.S. Department of State, and U.S. Embassy priorities.

The CDCS goal statement reflects Kenya’s aspiration for irreversible, transformational change.

A positively transformed Kenya will be a place where its people have the opportunity to fully participate in the democratic process, where citizens believe that government listens and responds to their needs, where the powerful do not have impunity, and where young people look forward to gainful employment. Such a transformation will include high economic growth rates and more equitable distribution of resources and income, and improved security. A Kenya thus transformed helps guarantee a vital and strategic partner to the United States for decades to come. Conversely, failure to positively transform could lead to deteriorated public services, economic stagnation, and exacerbated ethnic tensions all contributing to an unstable Kenya.

The Kenya CDCS works to achieve the Goal through three mutually reinforcing development objectives (DOs) and twelve intermediate results (IRs) aligned with the three pillars of Kenya Vision 2030. It treats the effective implementation of devolution as the game changer. Done well, it will propel all other reforms and address important economic, social and governance issues. If it fails, then Kenya’s ability to respond to popular will, and achieve the transformational change required for its people to realize their aspirations, will be compromised and stability threatened.

3 Kenya’s Vision 2030 is the country’s long‐term development strategy for the period 2008‐2030 that is being implemented through five‐year medium term plans. The overall aim of Vision 2030 is to transform Kenya into a newly industrializing, middle‐income country providing a high quality of life to all its citizens in a clean and secure environment. Three pillars undergird Vision 2030: Economic, Social and Political.

Our development hypothesis hinges on devolution as the strategic entry point. Devolution (DO2) targets building effective and accountable government systems, primarily at the county level; and essential linkages at the national level and with civil society, an enabling environment, and engaged citizens. Health and human capacity (DO1) is a critical input to DO2 and inclusive economic growth (DO3), with a focus on equity, participation and sustainability.

Our overall hypothesis is summarized as follows: Kenya's vision to become a middle-income country able to support its people and nurture their aspirations requires sustained economic growth and responsive governance. The means to achieve this vision is a free market economy and a decentralized government. USAID assistance will support this transformation by applying human, financial and institutional resources to: support the devolution process; sustain rapid economic growth; strengthen human capacity; preserve the environment; and dramatically expand the political and economic participation of vulnerable and marginalized populations.

DEVELOPMENT OBJECTIVE 1: HEALTH AND HUMAN CAPACITY STRENGTHENED

“With a devolved system of government the county is the next frontier in tackling development challenges, especially related to access to health and education.”

March 26, 2013 External Consultation4

The future of Kenya lies in its people, and in their ability to actively and effectively promote transformational change. Such change is a direct outcome of people participating in and contributing to both governance and economic growth. DO1 enables and empowers the people of

4 USAID has embarked on an extensive series of consultations to develop the CDCS, involving a wide range of stakeholders including government, private sector, development partners and civil society.

Kenya to be agents of transformation in their country. It contends that, if health and human capacity in Kenya are sustainably strengthened, then Kenyans will be able to effectively participate in and contribute to the transformation of its governance and economy. USAID support will significantly impact health and human capacity in the next five years. A particular emphasis will be on working with the youth of today to increase health and skills, and with the youth of tomorrow to lay the foundation for the future. This will help forge dependable, productive workers who will be more engaged and politically active citizens over the long term.

Our investments will progressively enable Kenya’s people to take advantage of political and economic opportunities in the short term, generating transformational momentum. It will also build the capacity of health and education institutions and systems to sustainably deliver quality services in the long term, strengthening the human capital needed to fuel Kenya’s development.

The DO will be accomplished by increasing Kenya’s proprietorship of its health, education and social systems and building the country’s own capacity to sustainably provide quality services in the long term. Kenya’s transition to a new governance structure will profoundly impact social services delivery over the next five years. It provides an opportunity for USAID to do business differently and engage stakeholders in ways that foster increased Kenyan responsibility for service delivery. This will be complemented by improving the accountability and quality of social services delivery, increasing the equitable use of these services, and building the adaptive capacity of marginalized and underserved populations – especially youth and women – to withstand and spring back from stresses and shocks. The result will be the strengthened health and human capacity which enables and empowers Kenyans to be agents of political and economic transformation in their nation.

DEVELOPMENT OBJECTIVE 2: DEVOLUTION EFFECTIVELY IMPLEMENTED

“Devolution is at the heart of the new Constitution and a key vehicle for addressing inequities, and has generated tremendous hope and expectations amongst Kenyans.”

Devolution Without Disruption, World Bank, June 2012

Kenya’s 2010 Constitution and Vision 2030 provide the foundation for transforming its governance and economy. Devolution is arguably the single most significant governance issue facing Kenya over the next five years. It will impact every facet of life, and especially public service delivery. If done right, it will propel all other reforms (public financial management, land, security, etc.) and address governance issues related to corruption and conflict. If it fails, then Kenya’s ability to respond to the will of its people will be compromised. Therefore, DO2 deliberately seeks to achieve transformational change by helping make devolution work. It contends that, if the devolution process is effectively implemented, then Kenya’s governance and economy will be sustainably transformed. USAID support will significantly impact the effectiveness of devolved governance over the next five years. Our efforts will improve county level democracy and governance systems, contribute to local government legitimacy, build service delivery support capacity, respond to needs, and forge a stronger link between citizens and their government. These efforts will build the foundation for effective, sustainable delivery of public services in support of DO1 and DO3 at the county level.

The DO will be accomplished by strengthening governance systems in targeted counties – making them more competent, transparent, accountable and inclusive; supporting the institutions and structures that enable them to cooperate and advance their interests with the national government; and building civil society organization capacity to be more sustainable and effective at representing citizen interests and aspirations to county governments. DO2’s approach and focus is based on the recommendations of the USAID 2011 Devolution in Kenya Study, and the World Bank 2012 Devolution Without Disruption report. We will coordinate our devolution support efforts with other development partners by working with and through the Transition Authority. Target counties will be selected by applying criteria which describe synergy with DO1 and DO3, and will include a mix of rural and urbanized counties, impoverished and better off counties, large population centers, and sparsely populated areas spread across Kenya.

DEVELOPMENT OBJECTIVE 3: INCLUSIVE, MARKET-DRIVEN, ENVIRONMENTALLY

SUSTAINABLE ECONOMIC GROWTH

“Paying attention to the human side of economic growth is important to achieving prosperity.”

March 26, 2013 External Consultation

Kenya’s governance and regulatory system hinders private sector investment and business expansion in an economy otherwise on the cusp of transformational change. The vibrant informal sector and some of the formal sectors provide a glimpse of the potential impact of unlocking human and financial capital across Kenya. Kenya’s tourism industry is its great wealth, and agriculture is the largest employer and drives the nation’s GDP. As a result, progress cannot come at the expense of the land and environment. Therefore, DO3 seeks to support inclusive and environmentally sound economic growth, creating widespread economic opportunities, increasing employment, and generating the revenues Kenya needs to meet its social commitments. It contends that, if there is inclusive, market-driven, and environmentally sustainable economic growth led by the private sector in a more positive business environment, then the economy of Kenya will be sustainably transformed. USAID support will significantly impact economic growth over the next five years by increasing food security, ensuring more sustainable use of natural resources, improving the business and regulatory environment, and increasing competitiveness and investment. This will generate the economic opportunities and employment needed to sustainably transform Kenya’s governance and economy.

DO3 will be accomplished by increasing household food security and resilience, and by improved environmental management to enable the sustainable use of natural resources, building more resilient people and ecosystems. The emphasis is on increased value chain competitiveness to improve the livelihoods of poor rural households to advance our Feed the Future5 strategy and on improved environmental management consistent with our natural resource management strategy. These efforts will be complemented by increased public and private capital flows, an improved enabling environment for private sector investment, and facilitated private sector engagement in infrastructure development, particularly for energy and trade. This will generate the enabling environment and investment needed for Kenya to achieve inclusive, market-driven, environmentally sustainable economic growth.

5 Feed the Future is the U.S. Government's global hunger and food security initiative. It represents a $3.5 billion pledge to address the root causes of food insecurity and poverty across the globe.

HOW WE WILL WORK

Kenya’s achievement of its Vision 2030 middle income status goal 2030 should be fueled by economic growth, trade and investment, and good governance. USAID’s relationship with Kenya will increasingly reflect that kind of maturity. We will align with Kenya’s core vision, providing support and advice. But, as in any partnership, we have a responsibility to affirm our priorities even as a democratic Kenya pursues its own course.

The USG has provided Kenya with an average of $400 million per year in development assistance over the past five years. Humanitarian assistance in terms of both food and non-food aid has averaged $133 million over the same period. We expect Kenya to continue to receive significant resources to: withstand and recover from disaster, further its development agenda, and strengthen our two countries’ bilateral relationship over the next five years.

Towards a Maturing Partnership: Implementation will be guided by USG strategy and policy, reinforcing the Busan Agreement on Aid Effectiveness. We will work to increase Kenyan proprietorship of their country’s development agenda, and spur private and entrepreneurial initiative to find and scale up sustainable solutions. We will deemphasize direct service delivery where the public and private sectors are equipped to respond. This maturing relationship will be characterized by using a more facilitative approach to development assistance as a catalyst for transferring U.S. know-how, expertise, technology, and providing access to U.S. markets, and institutions of higher learning.

Whole of Government: The U.S. Mission in Nairobi has a strong track record of teamwork which we will build upon to increase collaboration across USG agencies. USAID will continue consulting with its sister agencies, working closely to develop the upcoming USG Integrated Country Strategy for Kenya and its complementary investments, and to coordinate policy reform efforts.

Geographic Focus: USAID has a broad presence throughout Kenya, and is trying to determine the best focus for our program. Our focus areas for county-specific implementation of Feed the Future and Global Climate Change have applied criteria such as economic potential, population size, poverty rates, and land use. Our water, supply, and hygiene activities use criteria such as supply coverage gaps, integration with Feed the Future, HIV/AIDS, and natural resource management programming. Since disease prevalence is heterogeneous our resources necessarily tend to be geographically oriented for HIV/AIDS and malaria, but we expect to help deliver integrated health packages focused on maternal and child health in all 47 counties as the strategy begins.

Our devolution support activities will occur in counties where activities are being implemented under DOs 1 and 3 to maximize potential for focusing resources and integrating activities. They will also consider: political and strategic significance, political will, economic need, potential for conflict, large urban area, and clustering of counties to achieve economies of scale. We are working with other development partners to agree upon an appropriate division of labor and make certain we do not duplicate activities.

Collaborating, Learning and Adapting: The Kenyan context is extremely dynamic. Success will require keeping track of real time policy and implementation changes, understanding their importance and rapidly adapting design and implementation. There are no real roadmaps to devolution or private sector engagement, and opportunities to move policy dialogue come along quickly. We will use programmatic flexibility, continuous dialogue, and a culture of adaptive management to enable CDCS implementation and help us be true catalysts of change.

Doing Business Differently: USAID/Kenya will draw on the good will and trust developed in Kenya across the years. However, as the development paradigm shifts from service provision to institutional development and collaboration so must we change how we do business. USAID Forward has given the Mission new tools, and other provisions have become more commonplace to facilitate leveraging resources. As our work in Kenya evolved over time we have learned from our interlocutors what we have done well and what we could do better. We have explored how our programs and our dialogue might be more effective. In response, we propose to:

Implement an effective mutual accountability framework between development partners and the GOK at the national and local level;

Leverage increased private sector resources for development;

Seek increased collaboration with a more diverse range of implementing partners;

Capture feedback more effectively through advisory councils and better use of social media; and Create an effective coordination mechanism for USAID operations at the county level.

As we engage with the new county governments we will stress their investment in development plans and introduce new, more sustainable models. Our aim is to build a more dynamic, collaborative partnership with Kenya’s government, private sector, and civil society.