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Reality and Reform Needs in Development Cooperation. The Case of Kenya

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By Gottfried von Gemmingen and Axel Harneit-Sievers

Executive Summary

1. Kenya is East Africa’s economic hub, with a comparatively well-developed private sector and educational standards, a multi-party democracy and a largely free press. While development aid funding plays a less important role for Kenya than for many other countries in Sub-Saharan Africa, Kenya provides a test case for evaluating both: the efficacy of attempts at aid coordination and the improvement of aid effectiveness, and the efficacy of development aid as an instrument to improve governance and to exert political influence in a crisis situation.

2. After the National Rainbow Coalition (NARC) electoral victory in 2002 expectations ran high. International development aid to Kenya rose significantly, due to substantial economic growth and despite much disappointment about continuing large-scale corruption. The post-election violence crisis of 2007-08, while settled through the creation of a Grand Coalition government, drastically changed political perceptions of Kenya as an “island of stability”, with distinct consequences for the mode of operation of development cooperation.

3. From 2003, the Kibaki government embarked upon a major economic reform programme. This was supported by donors, some of which began to provide budget support. Policies, instruments and institutions of joint development planning and implementation began to flourish; the Kenya Joint Assistance Strategy (KJAS) was (and continues to be) the embodiment of this approach. They are developed further in a process of continued learning and negotiation. Principally, newly recognized challenges, such as climate change and the global economic crisis, can be (and are) addressed within this framework, although often in a gradual manner only.

4. In practice, aid coordination in Kenya has made progress, to a certain extent, by defining joint goals and indicators of success, agreed upon by government and donors. But it suffers from a range of problems, common to development cooperation in general: Institutional competition and resulting parallel processes of planning continue, as do concerns about lack of ownership or “absorptive capacity”; coordination processes require a lot of time; no consensus has been reached about the viability of basket funding and general budget support.

5. The Kenyan experience shows that efforts at improved aid efficiency are not mere “technical matters”. They do not operate independently of the recipient country’s political environment and are strongly shaped by donors’ more general perceptions of the political situation. Donors’ readiness to employ government systems in their delivery of aid in Kenya has strongly depended on their evaluation of governance criteria, especially the corruption problem – and these evaluations differ from donor to donor. In some cases, very (and perhaps all too) optimistic judgements (2003-07) have been replaced by extremely negative ones (after the post-election crisis).

6. The results of attempts to use ODA as an instrument to exert political pressure during and after the post-election crisis 2007-08 are mixed, at best. Donors did not find a joint position on this issue, while the Kenyan government regards the politically-motivated withdrawal of donors from formerly agreed positions as breach of trust. The development of a mutual accountability framework, with truly jointly agreed indicators, may provide a way forward.

6. German development cooperation in Kenya has consistently supported efforts at coordination, with a special strength in the area of sector policy reform. New challenges are most effectively addressed as a cross-cutting issue, if pushed by the BMZ (e.g., the strengthening of the human rights-based approach). The integration of climate change as an issue in the local programmes is still at the beginning. However, German support for the Truth, Justice and Reconciliation Commission (TJRC) has been courageous in contributing to an important reform process that had a high risk of failure. The same counts for supporting a study carried out by the Kenyan National Commission on Human Rights to investigate post-election violence. Overall, coordination is expected to improve by the harmonization or merger of the institutions of technical and financial cooperation.

7. Among the new global actors, only China has begun to make a major mark in Kenya, by providing substantial support for infrastructure development (especially road construction). While standing outside of existing ODA/DAC institutional mechanisms, it has begun to participate as an observer in some coordination meetings and co-funds some projects. The Kenyan government clearly expects that China provides a balance to Western development partners. Some, but not many government representatives take a closer and more critical look at the conditions and implications of the tied aid provided by China.

1. Kenya Country Profile

1.1. Background

The low income country Kenya is the economic hub of East Africa. Compared to many other African states (within the region and beyond), Kenya’s dependence on foreign development support is relatively small. The country has a well-developed private sector, a comparatively well-educated/trained workforce and a largely free press. Since its independence in 1963, Kenya has been stable, compared to the countries in its vicinity. Kenya’s capital Nairobi is the only developing country hosting headquarters of UN organisations. Besides Addis Ababa as headquarter of the African Union, it is an important location for international conferences as well as the hub of logistics for numerous international organizations in a crisis-ridden regional environment. In recent years, Kenya has repeatedly supported initiatives for peace and security in the region, and is traditionally supplying troops for UN peace missions. In Western public perception, Kenya is a preferred target destination of advanced safari (“Out of Africa”, “The White Maasai”) and coastal tourism.

But Kenya can hardly claim to be an African paragon. Kenya is notorious for largely unrestrained corruption and a political elite that has massively enriched itself since independence in 1963. It is also notorious for wide ethnic, regional and social disparities and tensions, and for violent crime and periodical outbreaks of violent conflict (especially in the context of elections). The worst case of the latter occurred after the 27th December 2007 presidential elections when – after a close run-up and disputed results – violence broke out in which more than 1.100 people lost their lives and about 600,000 became internally displaced.

In spring 2008, the post-election crisis was resolved through the formation of a Grand Coalition government under President Mwai Kibaki (Party of National Unity – PNU) and Prime Minister Raila Odinga (Orange Democratic Movement – ODM). The coalition pursues a demanding reform programme. Even though political conflicts have put into question, from time to time, the coalition’s ability to perform, positive expectations are high since the acceptance of a new constitution in a referendum in August 2010.

1.2. Kenya’s development: Progress, but stagnation as well

Not least due to substantial donor/“development partner” support, Kenya has made considerable developmental progress e.g. in the fields of infrastructure, primary education and access to information and services (e.g., mobile banking) for the broad population. As regards the indicators “governance and corruption, Kenya is at the regional average – even compared to countries that receive budget support from the international community (which Kenya does not, see below). Kenya’s institutions are – also due to support from Germany and other development partners – increasingly able to address corruption problems themselves. By means of a sound macroeconomic policy, Kenya has been able to survive rather well the quadruple crisis of the years 2008-10 – political violence, food price inflation, drought, and global economic crisis. For 2011, the Central Bank projects a GDP growth rate of 4.5%.  The constitutional referendum on 4th August 2010 proved the capacity of the country’s political elites to build a fundamental political compromise and work jointly towards societal progress.

However, all the positive developments should not obscure the fact that Kenya still has major developmental deficits. A population growth rate of 3% p.a. indicates major challenges in the areas of reproductive health and family planning. This growth implies a strain on natural resources and the environment which is additionally and severely stressed by problems of governance and resource utilization, as well as climate change. Three quarters of all Kenyans are below the age of 30 years. Youth unemployment is very high, and so are the crime rate and a general readiness in the population to employ violence. The reforms of the judicial and the penal systems – decisive for improvements in the rule of law – largely stagnate. There are large social discrepancies, but systems of public support (public services, social security systems) do not work well. The Gini-Index (2007: 42.5) remains on a high level.

2. Development cooperation in Kenya: Overview

2.1. Political background

Since its independence in 1963, Kenya is a recipient of development aid, including aid from Germany which was the first country to diplomatically recognize independent Kenya. The total amount of German development aid to Kenya up to the year 2010 amounted to about 1.3 billion Euro, but the amounts fluctuated strongly over time. In the 1990s, under the autocratic regime of President Daniel arap Moi, development co-operation was reduced from time to time, due to widespread corruption, human rights violations and general democratic deficits. However, whenever there were positive developments, the donor community reacted immediately. But often those developments turned out to be of short-term character only (for example, until the next IMF loan had been disbursed). There was a widespread perception that Kenya knew well “how to dance with the donors”.

After the electoral victory, in 2002, of the National Rainbow Coalition under President Kibaki, expectations ran high. International development aid to Kenya rose significantly in 2003-04 and reached about 1 billion USD in the budget year 2009-10. Currently, towards the end of 2010, commitments have reached 1.4 billion €.

Kenya’s country indicators in the years 2003-07 were generally judged very positive, especially so as there was a widespread optimism about the new government’s commitment to reform, and because of GDP growth rates of 5-7%, despite growing disappointment about lack of progress (and sincerity) as regards the fight against corruption. The optimism of these years was reflected by an ambitious economic and development programme (Economic Recovery Strategy, ERS, formulated by the Ministry of Planning in 2003 and extending to 2007), increased co-ordination between national and international actors and especially by an increased role of budget support in development co-operation. The IMF re-started a programme within the Poverty Reduction and Growth Facility (PRGF), carrying the character of budget support. The European Union followed-up with budget support as well, within the 9th European Development Funds (EDF). Furthermore, some more or less successful attempts were made at sector-wide approaches (SWAp) and programme-based financing.

In order to increase aid efficiency and implement the Paris Declaration on Aid Efficiency, the Kenya Joint Assistance Strategy (KJAS) was formulated in 2007. For the first time, this created a joint framework for the Kenyan government’s development policy and the most relevant international donors, including an extensive list of quantitative indicators designed to allow impact measurement and evaluation.

The crisis after the elections of 27th December 2007 marked an unexpected turning point – politically, as well as with regard to development co-operation with Kenya. In autumn 2007, when the IMF undertook its periodical evaluation of Kenya’s development indicators, it had refrained from including a number of unfulfilled governance indicators. However, by early 2008, many actors drastically changed their opinion about Kenya’s political development. Optimism was replaced by a stronger orientation towards (especially social and political) risks. The EU stopped budget support for the time being.

Nonetheless, external development aid for Kenya grew further after the crisis – despite negative evaluations about the state of political reform from some quarters.

During the post-election crisis in the first few months of early 2008, virtually all international actors put joint pressure on the Kibaki government and the opposition under Odinga to arrive at a negotiated solution of the crisis, in the form of some power-sharing government. The outcome was successful. After the formation of the Grand Coalition government in April 2008, however, different actors began to hold different views and perceptions of the Kenyan post-crisis political and governance realities, influencing the policy towards Kenya in general and also impacting upon their respective development cooperation. The spectrum extends from scenarios of severe crisis (some describe Kenya as being close to state failure) to those of “business as usual”.

2.2. ODA volumes and actors

Table 1 provides an overview about ODA financial transfers to Kenya over the last decade. With a disbursed amount of about 85 million USD in 2008, Germany belongs to the largest bilateral donors, after the US and the UK, and (for some years) Japan. On the multilateral side, major actors are World Bank and IMF, the European Union, and the African Development Bank.

China’s role in development cooperation with Kenya does not show in the DAC ODA-data, as provided by table 1, because China is not a member of the DAC and does not report to it. However, from the Kenyan government’s budgeting perspective, China has become a major donor; according to an overview of donor commitments for the 2009-10 budget , China contributes about 8.3 billion KShs (over 100 million USD), making it the third-largest donor after the World Bank and the African Development Bank (however, these figures are not necessarily compatible to the DAC data provided in table 1). The focus of China’s aid is on road and energy infrastructure; its contribution consists largely of low-interest loans (1-1.5%) and its aid is largely tied to Chinese suppliers.

2.3. Aid effectiveness and coordination: Core documents and institutions

The Grand Coalition established after the 2007-08 post-election crisis through the mediation of former UN Secretary-General Kofi Annan pursues an ambitious political reform programme (“National Accord”). Within this framework, the coalition government in April 2008 passed the long-term development strategy Vision 2030 which replaced the ERP of 2003. The Vision 2030 had been in preparation since 2006, but its successful launch sent a positive signal with regard to the ability of the new coalition government to work together.

Core documents  in Kenya’s efforts at coherence in development planning are:

 

  • the five-year Medium-Term Plan (MTP) for the budget years 2008-09 to 2012-13), developed by the Ministry of Planning;
  • the Medium-Term Expenditure Framework (MTEF), a rolling 3 year plan put up every year by the Ministry of Finance for purposes of medium-term finance planning ;
  • the currently updated and revised Kenya Joint Assistance Strategy (KJAS), which had originally been passed in September 2007 and was evaluated in the course of the year 2010.

 

Furthermore, a Mutual Accountability Framework is currently under discussion (though far from finalized), with the aim of reaching at jointly agreed indicators that are expected to define more clearly the mutual commitments of the Kenyan government and international donors in the implementation of development policies.

In order to strengthen development aid coordination institutionally, the Development Partnership Forum (DPF) was introduced with strong World Bank support in late 2009 and is being held twice a year. It constitutes the highest level forum of consultation between the government and development partners; it has replaced the Kenya Consultative Group, which had met irregularly in the years before.

Development partners coordinate (on Head of Mission/agency level) at the Donor Coordination Group, in monthly meetings. The aid effectiveness agenda is pushed forward by the Aid Effectiveness Group co-chaired by the Ministry of Finance and an elected development partner (currently UK/DfID).

2.4. Joint objectives, diverse perceptions

In this complex mesh of actors, institutions, processes, coordination fora, strategy papers and detailed planning documents, a number of joint objectives can be identified, but different views as well:

 

  • All development partners generally subscribe to the overall goal of poverty reduction in Kenya and to the broad development goals formulated in the Vision 2030. However, there are different perceptions about how to support Kenya in achieving it. Some development partners (see above) rather focus on support to social services, some on infrastructure, some on inclusive market development.
  • There are various and differing perceptions and assumptions about Kenya’s political situation which is highly influencing the way how aid is provided to Kenya. Whereas some partners (such as Sweden, Denmark, the World Bank and the AfDB) almost exclusively work through government systems, some partners tailor their modes according to the readiness of the partners (such as the UK, Netherlands and Canada), others merely work through integrated of independent project management units of their implementing organisations or consultants (France, Japan, Germany, the US, EC and the UN).
  • Budget support is a highly contentious issue, given this diversity in assessing Kenya's political situation and designing the modes of aid delivery. It was provided before the elections in 2007 by the IMF through a programme under the Poverty Reduction Grant Facility and the European Commission. The IMF programme phased out in 2007. The EC disbursed a tranche one day after the elections in 2007. This move drew strong reactions from EU member states and in particular Germany. EC is currently re-considering how it should deal with the still outstanding tranches in the 9th and 10th EDF.

 

3. Specifics, Achievements and Challenges of German Development Cooperation in Kenya

3.1. Institutional setting

German development cooperation's general feature is the institutional separation between the political guidance provided by BMZ as the ministry with the lead for development cooperation in the Federal German Government and GTZ, KfW, DED and InWEnt as implementing organisations. These implementing organisations are commissioned by BMZ for each project or programme. In BMZ's budget, the provisions for technical cooperation (TC) and financial cooperation (FC) are separated, such as those for the smaller organisations of technical cooperation, such as DED and InWEnt, which are to be merged with GTZ by 01.01.2011 to become GIZ, the German Agency for International Cooperation.

This institutional setting ensures high technical and professional standards in facilitating change in complex institutional, societal and political systems. However, it has high overhead costs, is quite demanding in coordination and limits the scope for political guidance. Also, reluctance is being felt within the system to consistently strive to increasingly work through partner systems. Reasons for this may be KfW's strict internal safeguards and GTZ's interest as an advisory enterprise to gain as much implementing experience in as many sectors as possible as potential fields for doing business with other donors.

German development cooperation in Kenya is represented by a Development Cooperation Counsellor, seconded by the Federal Ministry for Economic Cooperation and Development (BMZ) to the German Embassy. All four implementing organisations (GTZ, KfW, DED, InWEnt) tasked with the implementation of German development cooperation have offices in the so-called "German House" in Nairobi. This plethora of institutions coordinates internally in a „country team“ with monthly meetings. Also, there are sector group meetings among the implementing organisations in the priority sectors, sometimes formalised in extensive cooperation agreements, for example in the water sector.

Bilateral Negotiations between Kenya and Germany are held every three years in order to set priorities and agree on future programmes and projects. They follow a rather formalized format. However, this format ensures an intensive clarification of mutual expectations and thus provides a good reference for the subsequent commitment cycle.

3.2. German development cooperation in donor coordination

The co-ordination of the German development cooperation’s focal areas – health, water, and private sector promotion in agriculture – as well as the head of the GTZ governance programme participate in the respective sectoral working groups. In regular turns, they take over the chair or co-chairmanship and contribute actively to the improvement of coordination between donors and partners in the respective sectors. The German-supported “Private Sector Development in Agriculture” programme, for example, supports a sector coordination unit in the Ministry for Agriculture.

Germany has provided limited funding to basket funds in the Governance, Justice, Law and Order Sector Reform Programme (GJLOS), in Public Financial Management and Agriculture. KfW is working on establishing procedures and safeguards for using government systems for procurement and distribution of drugs and contraceptives in the health sector.

German development cooperation funds the current evaluation and revision of the KJAS joint development strategy. It is playing an undisputed leadership role in some thematic areas, such as health financing, urban water supply, and value chains in the agricultural sector.

German development cooperation has furthermore shown courage to support, at an early stage, a number of politically highly relevant reform commission, such as the Truth, Justice and Reconciliation Commission (TJRC) (which has virtually failed by now) and the National Cohesion and Integration Commission (NCIC), both of them core elements of the National Accord that ended the post-election crisis in 2008. The high political risk involved here was always covered by the German Government (BMZ and Foreign Office). Germany also pioneered the treatment of victims of gender-based violence during and after the crisis as a starting point to strengthen victims' access to justice and to proper medical and psychological care.

GTZ and KfW pursue various projects of the EU Commission (sanitary sector, rural road construction) and those of other donors (e.g., a Dutch project on biogas and fuel wood-saving stoves) within the framework of mandated implementation, co- and combined financing.

The overall volume of German development cooperation finance in Kenya, as dealt with in the negotiations with the Kenyan government, amounts to about 30-40 million Euro (KfW) and 10-12 million Euro (GTZ). Contributions by the DED (2-2,5 Mio Euro) and InWent are not part of the government negotiations.

German ministries other than the BMZ are involved only in a few cases. The Ministry for the Environment (BMU) cooperates with GTZ in two agricultural projects; the Ministry for Agriculture (BMELV) is involved in the support of one or two FAO projects. The Foreign Office supports some non-governmental organizations in conflict resolution and provides emergency aid. Support to Somali refugees in Dadaab is provided by BMZ (through a partnership with UNHCR) and by the Foreign Office through direct contributions to UNHCR.

Apart from bilateral aid, Germany also provides significant resources to multilateral organisations such as the European Commission, World Bank, African Development Bank and the UN family, as well as to non-governmental organisations such as German Agro Action (Deutsche Welthungerhilfe) and the aid organisations of the German Catholic and Protestant Churches.

German development cooperation integrates cross-cutting issues such as gender, human rights and environment into the design of the programmes. In the past, strong emphasis has been laid on strengthening the human rights perspective. This led to some fine examples of pro-poor development, such as the Water Services Trust Fund, a financing instrument geared towards poverty-related investments in water supply and sanitation. Another example are a voucher programme for poor women for delivery in qualified clinics and a programme to strengthen access to justice for victims of gender-based violence. An obligatory “climate proofing” of German development cooperation activities in Kenya is expected to start by January 2011.

3.3. Linkages to private sector actors

Support for German trade and investment does play little, if any, role in German development cooperation in Kenya. The GTZ uses public private partnerships (PPP) as an instrument in the health programme (workplace safety, HIV/AIDS prevention). But such partnerships with private enterprises are not limited to German or European companies (partners are Lafarge, Safaricom, Kenya Airways etc.).

Hermes export insurance – a major instrument of German international commercial policy – plays little role in Kenya as well. As far as known to the authors, there was only one inquiry regarding a water power generating facility (Kindaruma on the Tana River) to be funded by German Financial Cooperation .

At any rate, German investment in Kenya, as regards manufacturing, is very limited; Beiersdorf is the only larger German company with own production facilities in the country. There are some smaller operator-owned companies of German nationals (Henkel (different from the chemical company); City Clocks; etc.).

Other representatives of German companies active in Kenya are usually distributors/sales promoters, or are travel agencies (especially at the Coast). The trade balance is skewed towards German imports to Kenya (largely machines, cars, chemicals – volume 2009: 197 Mio EUR), whereas Kenya exports mainly food and horticultural products (2009: 107 Mio EUR). 

The German private sector is represented in Kenya through the German Business Association.  The posting of a representative of German business has been discussed for several years, but has not been approved by the Government of Kenya yet.

4. Basic Challenges

4.1. Parallel processes and institutional competition, despite efforts at creating coherence

Parallel management processes and institutional fragmentation do not only occur within German development cooperation or amongst development partners. They are also part of everyday practice in the Government of Kenya. As the Ministry of Planning is in charge of the Vision 2030 and Medium-Term-Planning (MTP), Ministry of Finance is in charge of annual budget planning and the (rolling) Medium-Term Expenditure Framework (MTEF). Even sector definitions vary between MTP and MTEF and also, priorities can be set differently in the annual budget. Besides MTP sector indicators often comprising various ministries, each ministry has just put up individual strategic plans, which are not necessarily in line with MTP and Vision 2030. Sometimes, budget provisions even contradict the plans put up by line ministries. For example in the current budget, a significant part of the support for the health sector (such as provisions for health centres and its staff) is channeled through the Constituency Development Fund, i.e. implemented by the members of parliament and not by the Ministry of Health.

It should not be overlooked that the pursuit of institutional self-interest exists on the side of the donors as well – it is always difficult to “give up” an area of work and expertise one has worked on for long. Concentration on few sectors and division of labour thus remains an uphill battle. Also, a reluctance can be perceived on the side of the Government of Kenya to more strictly guide development partners to concentrate, to phase out respectively to delegate provision of aid to other partners.

Thus, there is a proliferation of internal and external actors in particular in “fashionable” sectors like governance and health. There are also various parallel planning processes even within the Government of Kenya. In addition to this, the limited and varying extent of development partners aligning to Government systems leads to a multitude of planning processes which can be a burden.

4.2. „Ownership“ and development aid efficiency

Discussions around „ownership“ are part of the standard repertoire of development policy debates, especially so in the context of the aid efficiency debate.

Both categories are largely donor-induced (as complaints around “lack of ownership”, or around lack of impact). Debates around ownership often include a moral dimension (“we are doing something for you, but you don’t take it serious”), which at times makes a goal-oriented, functional debate difficult.

„Lack of ownership“ can have numerous effects. A typical problem is that commitments are not being kept; resources that have been committed by the government are not released; parallel processes emerge.

At the same time, it should not be overlooked that the much-criticized lack of transparency, and the disorganization resulting from it, can also constitute a resource: it may increase the space for manoeuvring for political and bureaucratic actors intent on pursuing special interests.

A good example for these difficulties is provided by the water sector reform in Kenya, supported by German development cooperation. The Kenyan government systematically deprives the water sector reform of the resources required to make it work. This, among others, results from the fact that certain institutions continue to exist (and continue to receive funding) which, if the reform was properly implemented, should not exist anymore at all. However, they persist because of the interest to provide for the employees, for using them as cash cows and as instruments to attract the support of potential voters a clientelistic manner.

However, there are also good examples of donor coordination and alignment of efforts behind government strategies. Generally, coordination seems to be easier in infrastructure sectors such as roads, energy and also water. In many sectors, a core group of development partners are most active in coordination, policy dialogue and alignment, whereas other development partners work in a rather uncoordinated manner, e.g. in the health sector. In “soft” sectors and politically sensitive sectors such as governance, aid is provided in very different modes ranging from basket funds with or without government involvement, NGO support and bilateral direct support. Coordination in such sectors is much more cumbersome and often intentionally happening purely amongst donors as an instrument of policy dialogue of the international community with the government.

4.3. „Absorption/absorptive capacity“

“Absorptive capacity” (or rather, the lack of it) is another common issue in the debates around aid impact and aid efficiency.

Ideas about “lack of absorptive capacity” often imply rather mechanical concepts of the relationship between finance and institutional capacity. “Absorptive capacity” is often regarded as a rather technical category; in consequence, it is suggested that just “capacity building” is required in order to increase the capacity of Kenyan institutions to properly use (increased) development finance.

In reality, categories such as “absorptive capacity” and “ownership” are very much political categories, reflecting aspects of priority-setting on the national political level.

One fine example was the constitutional referendum of August 2010. Some months before, Kenyan government institution had asked the donors to provide about 80% of the total costs of the referendum; in reality the donors finally provided only about 10%. Still, the referendum was conducted well. To conclude: While there are sometimes stumbling blocks and all types of problems, Kenyan institution are capable of realizing large-scale and difficult objectives, if the political will to do so exists.

4.4. To what extent are the objectives and impact evaluation indicators in development cooperation really jointly defined?

KJAS (2007) came up with a comprehensive set of objectives which are different from the objectives formulated in the Economic Recovery Strategy (2003-08) and its successor, the Vision 2030 and the MTP (2008-2013). The KJAS indicators are intended to be measurable and achievable up to 2012. However, there has not been any monitoring or reporting based on these indicators, which thus proved to be ineffective.

In the currently ongoing revision/update of KJAS (KJAS II, 2010-12) it is proposed to use the Government's MTP indicators. However, trade-offs might have to be accepted in terms of measurability and effectiveness. Some ministries and sector specialists admit that they hardly follow these indicators, but merely their ministries' own objectives and indicators. These shortcomings can only be overcome in the next MTP.

The discussion about development indicators blurs the fact that priority setting is always highly political. It is not only a question of what objective is defined, but also of who defines it. Apart from development partners trying to influence government's priority setting, there is a constant power gamble between Ministry of Planning, Ministry of Finance, the newly created Vision 2030 delivery secretariat under the Office of the Prime Minister and the line ministries. The result is the above-mentioned plethora of planning documents and an increased scope for deliberate and politically motivated action.

4.5. Despite the hype and the efforts: lackluster performance of basket funds, sector budget support and general budget support

Since 2004, starting with the GJLOS basket, a number of joint funding instruments was established. Some funds, like the basket fund in agriculture and sector support to basic education, were managed by the government using more or less government's own systems. However, basket funds tend to lack the performance hoped for. There are various reasons for this: Government's procedures – if followed more thoroughly as required by development partners – can be quite cumbersome. The same is true for basket management procedures, if the fund is managed by a financial management agent. Also, having bagged in the basket funds, some government institutions tend to focus more on acquiring additional bilateral support rather than managing the funds according to tedious procedures. Some partners informally indicate that they appreciate the flexible approach of bilateral partners and personal contacts through international technical assistance.

Sector budget support (such as exists de facto in the education sector) and overall budget support have until now not proven their effectiveness. The discussion about the disbursement of the last tranche of the 9th EDF just one day after the December 2007 elections showed that criteria for disbursement should also include political reform indicators.

4.6. Inconsistent donor reactions, despite a joint strategy (KJAS)

The Kenya Joint Assistance Strategy (KJAS) linked Kenyan development scenarios (e.g., progress with regard to rule of law, transparency and poverty alleviation) to the volume and mode of operation (e.g. whether funds should be channeled through NGOs or to the government, as project aid, basket finance or budget support) of development aid. KJAS formulated so-called “low case”, “base case” and “high case” scenarios. However, donors disagree in which of these scenarios Kenya finds itself today. For some donors, the criteria for the various scenarios are too vague, for others too strict. Only budget support was stopped after the 2007-08 crisis by the EU commission. Currently, especially the multilateral donors (World Bank and EU) prepare a gradual re-entry into budget support funding, within a positive (base or high case) scenario.

The Kenyan government regards these scenarios as contradicting the Paris Declaration’s principles regarding the predictability of aid. The government demands a stricter separation between the daily business (“politics”) and the long-term orientation within development cooperation. This view is shared by some development partners (such as Japan, the African Development Bank and the UN) and hotly contested by others (e.g. US, UK, Netherlands and Germany).

4.7. Priority of political assessments, despite “objective” impact measurements

Despite all attempts at „objectivisation“ of impact measurement etc. within coherence efforts, concrete action in development policy remains very much dependent on (sometimes short-term) political and governance evaluation, undertaken by donors.

The case of Kenya shows that the perception of a recipient country’s political and governance conditions can change fast; there may even be a risk to move from one extreme to another. Despite a catalogue of jointly-agreed “objective” criteria (as formulated in KJAS), different actors continue to have very different opinions about the situation of the country. Of course, it is positive to formulate objectives in the area of governance, as part of a development programme. But there is a risk that these opinions are influenced by major events (short-term, thoroughgoing), and may thus become contradictory.

4.8. Different donor perceptions on using government systems despite corruption and governance deficits

As corruption is still widespread and deficits with regard to the implementation of the rule of law continue to exist, donors widely regard these factors as the main stumbling blocks on the way to a broad use of Kenyan systems for implementation and monitoring. For this reason, many donors continue to use their own procedures and systems of implementation. This is true particularly for the organisations of German development cooperation.

Other donors, such as the World Bank, the UK (at least in the past) and the Scandinavian countries use Kenyan systems of implementation to a much larger extent. However, this requires a long-term oriented strengthening of Kenyan structures of control and monitoring. For example, the internal audit of the Ministry of Finance, strengthened through support by the World Bank, was able to uncover a widespread corruption scandal in the national primary education programme – a success story of how improved monitoring and accountability can be supported by donors. At the same time, however, the slow pace of dealing with this and other corruption scandals shows that overall, these control and audit structures are still weak. Cases are not brought to court, or only with serious delays.

It has become clear that gradual progress in the transparent realization and accounting of government programmes can be achieved through a use of Kenyan implementation programmes, accompanied by technical cooperation. However, the risks involved remain high.

Furthermore, basic prerequisites still have to be met with regard to the judicial treatment of corruption cases. But there is hope that efforts at judicial reform will receive a new stimulus through the new constitution.

4.9. New global actors in Kenya's development – towards gradually increased coordination

Up till today, the new global actors play a comparatively small role, as regards development cooperation in Kenya. The only relevant player is China. China pursues its own priorities (infrastructure, especially road construction), but shows interest in participating (at least with an observer status) in the coordination meetings. Chinese representatives appear to have similar concerns, as regards the efficiency and reliability of Kenyan institutions, like their Western counterparts. While China’s financial contribution to Kenyan infrastructure developments have been growing fast to the current substantial levels, it does not (yet) provide an alternative to Western development cooperation financing.

China is a constructive development partner particularly in the infrastructure sector and engages in joint or parallel funding of projects e.g. with AfDB in the roads sector or in the energy sector (wells-drilling for jointly funded geothermal power plants). China sees the need for political dialogue in order to strengthen political stability in the country.

On the Government's side, there is the clear expectation, that China funds and quickly implements large-scale infrastructure projects and provides a balance to Western development partners. When President Kibaki visited China in May 2010 to attend the launch of the Shanghai World Expo, the main question in the Kenyan press was about the volume of infrastructure projects bagged in. Some, but not many government representatives take a closer and more critical look at the conditions and implications of such tied aid.

5. Observations and Conclusions

5.1. Mixed effectiveness of development cooperation to support political change and development

After the post-election crisis 2007-08, Kenya provided an opportunity to test the opportunities and limitations of foreign (development) policy intervention in a critical period. At the height of the crisis, all major actors cooperated and pushed into the same direction, exerting pressure which, as generally acknowledged, had an impact. More long-term development finance commitments, however, were only partly affected/used, and thus constituted only a rather limited instrument of pressure.

The impact of external political pressure during the Kenya crisis in 2007/08- including the "no business as usual" announcement by the development partners in January 2008 and its consequences – was higher as in Zimbabwe, for example – because the international community unanimously united behind the mediation efforts of Kofi Annan. This was unique and did not sustain after the crisis ended.

The newly-introduced Development Partnership Forum aims at engaging in a more structured, regular and development-oriented dialogue. Government and Development Partners commit themselves to certain priority measures and are to report on their respective implementation. One of the highest priorities was the implementation of the political "Agenda 4"-reforms. This was backed up by various support programmes particularly in the governance sector. Irrespective of the open question of attributing Government's - and in particular Parliament's - (re-)action on international pressure, Kenya's seriousness on these reforms has been strong such as was the pressure of the international community.

5.2. Donor coordination is a necessity, but efficiency needs to be taken more seriously

Efforts in aid coordination have increased significantly since the launch of the KJAS. This is positive, since the burden of donor coordination is more and more taken away from the often overburdened partners. In particular in the field, the negative impact of lacking donor coordination often becomes too obvious. However, the aim of increased coordination and alignment often remains unclear and thus aid coordination ends up in endless meetings without a clear roadmap towards strengthening coherence and joint aid delivery. Some sector coordinators of German development cooperation indicate that up to 80% of their capacity is consumed by donor coordination.

5.3. The aid effectiveness agenda may have a leveraging effect in a difficult political environment – but not necessarily so

For development partners the question remains, whether further steps in using government systems are a means to effectively improve them or whether they have to improve first, before aid provision can be aligned to them. The answer cannot be easy. The corruption scandal in the education sector was revealed by the Government of Kenya itself in 2009. It was made possible, after the Internal Audit Office of Treasury had been trained within an aid programme. The scandal probably wouldn't have been revealed, if there hadn't been any sector support by the UK, Canada and the World Bank.

In contradiction, the joint support for the GJLOS reform programme mutated into a mere modernisation programme for the government administration instead being a programme for political reforms. Sector-related issues like the raid of the offices of the newspaper “Standard” in 2006 was never effectively discussed within the programme dialogue. Also during the crisis, the elaborate GJLOS coordination structures were dysfunctional.

5.4. Development cooperation in Kenya remains characterized by mutual mistrust

In practice, development cooperation in Kenya remains clouded by mutual distrust between donors and government.

From the donors’ perspective, the Kenyan government (or specific institutions therein) sometimes may show an insufficient will to reform and to actively shape development cooperation, combined with a still high risk of corruption. This impedes the consequential/systematic use of Kenyan procedures in budgeting, tendering and implementation.

From the Kenyan government’s perspective, the unilateral announcement by the donors in the course of the post-election crisis to pursue a policy of “no business as usual” implied a severe breach of trust. This view is particularly held by the PNU side in Government (President Kibaki's party); Prime Minister Raila Odinga – leader of the ODM opposition during the crisis and later on partner in the Grand Coalition government – thanked the international community for its clear positioning during the time of crisis, at the meeting of the Kenya Consultative Group in May 2008.

5.5. Distrust can only be overcome by gradually developing a framework of mutual responsibility

The difficult relationship between Government and development partners might only be improved, if mutual expectations become clearer for both sides. Both sides depend on each other to a certain degree. Expectations on aid coordination and alignment on the one side and progress in political reforms and public accountability should be formalised in indicators. This is difficult enough for both sides, but a stepwise approach in an updated KJAS could be worth a trial.

5.6. Germany on the road to Paris/Accra: Active in coordination, good in performance, reluctant in alignment

Germany is an active partner in various sector coordination groups (through the sector coordinators and programme leaders) and also an active member in the aid effectiveness group. Its strengths lie in supporting sector policy reforms on various level (policy advice, implementation of innovative pilot investments, technical back up on lower institutional levels) – i.e., supporting policies that work.

German development cooperation's analytical strengths on national and macro-level lie particularly in areas where ongoing programmes require acknowledged expertise and coordinate with other partners, e.g. in public financial management and governance. The analytical power is, however, very much focused on its actual areas of work and not necessarily on new issues.

New overall and cross-cutting issues are often sensibly and pro-actively dealt with by the individual implementing organisation, but not necessarily by German development cooperation as a whole. This only happens, if pushed by BMZ, such as in the field of strengthening a human rights-based approach: in a series of sector studies, German development cooperation managed to strengthen the human rights-orientation in Kenya in a extraordinary manner. This is e.g. still lacking in its approach to deal with the impacts of climate change.

5.7. Reorganisation of German technical cooperation – an important step ahead

The merger of GTZ, DED and InWent is an important step towards increasing the efficiency of German development cooperation. It will lead to a more coherent aid delivery.

Germany is not the only country with a problem of institutional inefficiency in the area of development cooperation. The US surely has a similar institutional problem, with many different organizations and programmes (e.g. funded by the administration or by Congress). Other countries have already undertaken steps to integrate their actors in the field, for example Japan with the reform of JBIC/JICA.

The main future challenge will be the harmonization or merger of German Technical and Financial Cooperation. This is where the main efficiency gains can be achieved. It is definitively more complex, but could be a next goal for further strengthening German development cooperation.

 

About the Authors:

 

Gottfried von Gemmingen, since 2007 until July 2010, was the Development Cooperation Counsellor at the German Embassy in Nairobi, Kenya, seconded by the Federal Ministry for Economic Cooperation and Development (BMZ). Since then, he works as desk officer at the BMZ’s department for climate policy and climate finance in Bonn.

Axel Harneit-Sievers heads HBF’s Regional Office for East Africa and the Horn of Africa in Nairobi, Kenya, since December 2006.

Disclaimer: Opinions expressed in this paper do not necessarily represent official views held by the German Federal Ministry for Economic Cooperation and Development (BMZ) or the Heinrich Böll Foundation (HBF). Instead, they represent the authors’ personal views, derived from observations and experiences made while working in development cooperation in Kenya over recent years.