Kenya

Daniel Edmonds

Current Development Status Natural Factors 1:

Location & Geography

• Location: Eastern Africa boarding the Indian Ocean between Somalia and Tanzania

• Climate: from tropical along the coast to arid toward interior

• Arable Land: 8% (USA 18%, CH 10%)

• Natural Hazards: reoccurring droughts, flooding during heavy rain falls

Current Development StatusNatural Factors 2: Land Resources

Limestone, gemstones, zinc, wildlife etc.

Current Development StatusHuman Factors 1: Health

Kenya USA Switzerland

Population 39,002, 772 307,312,123 7,604,467

Age structure years0-1415-6466+

42%55%3%

20.2%67%12.8%

15.6%68.1%16.3%

Birth rate populationDeath rate population

37 births/1000population10 deaths/1000 population

13.83 births/1000population8.38 deaths/1000 population

9.59 births/1000 population8.59 deaths/1000 population

Infant mortality rate 55 deaths/1000 live births

6.22 deaths/1000 live births

4.18 deaths/1000 live births

Fertility rate 5 children born/woman

2 children born/woman

1.45 children born/woman

HIV/AIDS 6.3% 0.6% 0.6%

Current Development StatusHuman Factor 2: Education

Kenya USA Switzerland

Population (million) 39,002,772 307,212,123 7,604,467

Literacy rate (%) 85% 99% 99%

School lifeexpectancy (years) m/f

10 years totalMale 10 yearsFemale 9 years

16 years totalMale 15 yearsFemale 16 years

15 tearsMale 15 yearsFemale 15 years

Education expenditure (% of GDP)

7% 5% 6%

Military expenditure (% of GDP)

3% 4% 1%

Current Development StatusEconomic Factors 1: GDP Growth

Kenya USA Switzerland

GDP per capita $1,600 $46,600 $41,400

Unemployment % 40% 9.4% 4%

Inflation rate 27.8% -0.7% -0.6%

Labor force-agriculture-industry & service

75%25%

1%99%

4%96%

Household income-lowest 10%-highest 10%

2%38%

2%30%

3%26%

Public debt % of GDP 60% 39.7% NA

Population below poverty line

50% 12% NA

Obstacles to DevelopmentInternal Factors 1

• Unemployment of 40%-> higher crime rate, more instability, stress etc-> -> poverty trap

• Corruption in government (144th of 159 countries) -> less funding from government, reduced donor support, less income distribution among the people (rich get richer poorer get poorer), less tourism, less aid, slower infrastructure development-> -> poor government trap

• Political and economic hangover from violence during 2008 elections-> resentments

Obstacles to DevelopmentInternal Factors 2

• Reliance on goods whose price has remained low

• Recent drought

Obstacles to DevelopmentExternal Factors 1

• Unstable neighbors (e.g. Sudan, Somalia, Ethiopia

-> refugees, possibly spreading tribal conflicts and reduced trade

• Global food crisis

• Global financial turmoil

Resources and Potential Internal Advantage 1

• Relatively high literacy (85%)

• Regional hub for trade and finance in East Africa

• Industries:

-small scale consumer goods (soap etc)

-agricultural products (tea, coffee, etc)

-tourism

Formal ProposalBackground information for Micro-

credit scheme 1

• 7.5 million Kenyans live in slums

• 1.5 million (60%) of Nairobi’s population live in slums (little/no access to water, electricity, basic services, infrastructure etc.)

-child mortality: 15% die before 5 years old (6% for Kenya as a whole)

Formal ProposalBackground information for Micro-

credit scheme 2

• Aaron Wegmann/Pamoja Trust (NGO):

-redevelopment of slums (Kibera vs. Kambi Moto)

-Kambi Moto (burnt earth), 1/10 finalist project for World Habitat 2009(UNO): 270 homes of lava stones, $3,200/house, 20% own capital

• Challenge: building of infrastructure, shop creation, public transport etc. in redeveloped former slums

Formal ProposalProject Goal

• To help develop an environment for investment and sustainable growth by a micro-credit scheme for people building the infrastructure in redeveloped former slums

Formal ProposalProject Details

• World Bank would give loan of $5,000,000 to local microfinance institutes (e.g. Equity Bank) who then would give micro-credits for people building the infrastructure in redeveloped former slums in Kenya (preferably redeveloped “Aaron style” not “Kibera style”)

-> average loan balance/borrower: $280.6

-> $5,000,000/$280.6= 17,819 people

Formal ProposalExample of similar successful projects1

• Julie Amunga lives in the slums of Mathare

• Amunga and her friends received a loan from the Jamii Bora Trust.

• She now runs a successful business selling vegetables and fresh fruit in the local market

• Her children can now go to school

Formal ProposalExample of similar successful projects2

• Anna Leoni Muschi lives in a small town close from Mt. Kilimanjaro

• Before she received money she had to beg to provide for her family and her daughter

• Relatives gave her money to sell fruits but not enough to survive

• Anna received credits from the Akiba Commercial Bank, partner of responAbility

• Now she built a shop at the foot of Mt. Kilimanjaro selling meat and is able to keep a loyal clientele

Formal ProposalSuccess for refinancer

Formal Proposal Financial Analysis of Project 1:

Expenses & Expected Rates of Return

• 20%/day interest to informal money lender

• responAbility: 34% interest/year to MFI

-expenses: 19%

-provision: 2%

-refinancing: 7%

-profit for MFI: 5%

Formal Proposal Financial Analysis of Project 2

Repayment Schedule• Proposal: payment of 7%/year interest to the

World Bank on the capital of $5,000,000 for 3 years

• Repayment of capital or renegotiation of interest rate for a new period to be determined