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Saving is the key to future growth for Kenya

Wolfgang Fengler's picture

How do countries and individuals become rich? Human history provides a clue. One of our most defining moments as a species took place some 10,000 years ago, when a group of humans started to switch from hunting and gathering food to growing it. This allowed them to settle down (in an area called Mesopotamia). If they produced more than they consumed, they could save for the future. With proper storage facilities, they no longer needed to eat and drink everything they had; instead they could put some aside literally for "rainy days", and, even more importantly, invest some of the agricultural output to produce even more.

Now zoom forward several thousand years: saving has become central to individual and collective prosperity. As a rule of thumb those who save more become wealthier because foregoing consumption today allows one to invest in the future (e.g. you can save to buy a bicycle, a car, or a house). Businesses can invest in new equipment and governments in new roads, schools and health facilities. All of these investments are associated with better economic futures.

People and companies tend to save and invest if they can trust the institutions that manage their money and the economy at large. In the past, it was not always safe to keep deposits at banks in many African countries. It is different today. In fact some may feel more secure entrusting their savings to African banks than those in Europe (as depositors in Cyprus’ banks recently realized). But you need more than robust and credible banks for increasing savings and investments. Investors will only enter and stay in large numbers if they can trust that the state won’t change the rules of the game in mid-course.

Mosquito Nets in Kenya: Driving Africa’s Fastest Reduction in Infant Mortality

Kavita Watsa's picture


Growing up in India, mosquito nets were an essential part of life. I slept under them as a child in Bangalore, with their ropes tied to bedposts, doors, closets, window grills—anything that would offer support at the right height. It was like pitching a tent every night, and the occasional dramatic collapse would result in much helpless laughter. Later, going to college on the banks of the slow-flowing Koovam river in Madras (now Chennai), I tucked myself under a net in my dormitory at about 6 p.m. to avoid the twilight assault of mosquitos from the water. In fact, particularly after a bad attack of malaria when I was a child, a lot of my life was lived perforce under a mosquito net, until electric repellent gadgets reached the market and nets somewhat lost their popularity.

Recently, sitting in Halima Ibrahim’s house in Majengo, a neighborhood in the coastal city of Mombasa, and talking about the new mosquito nets her family had just received from the Kenyan government, I felt instantly at home in her tiny living room. It was packed from corner to corner with family and friends, all brimming with opinions about nets old and new. Everybody talked about malaria and what a problem the disease was in the community. The nets that had just been distributed to them free of cost would make a huge difference, they said, protecting them from being bitten by mosquitos, and saving them considerable expense. Many of the families on the street simply could not afford to buy durable and effective nets at the prices they commanded in the local market.

Women's Untapped Potential: Examining Gender Dynamics in Global Trade

Cornelia Staritz's picture

A woman inspects her broccoli crop in Honduras. Source: http://www.flickr.com/photos/feedthefuture/6942506316/Maria knows she is good at selecting ripe tomatoes, but she doesn’t know any women who own nurseries like the one where she works in Honduras. Susan does housekeeping for a hotel in Kenya, but there is little chance that she would ever lead a safari. Salma, at a call center in Egypt, can calm down angry customers, but she has never seen a female manager in her office.

Global value chains (GVCs) are essential to modern trade, and women’s labor is essential to many products and services that are traded across countries. But many limitations hold women back from participating more fully and equally to men in this important and growing global labor force, as we show in a collaborative project by the International Trade Department and the Gender Division at the World Bank. Though the names above are fictional, the situations are representative of what we found in case studies in the horticulture sector in Honduras, the tourism sector in Kenya and the call center sector in the Arab Republic of Egypt.

Understanding “Foregoing” Behavior at the Base of the Pyramid in Kenya

Tim Kelly's picture

At the end of 2012, infoDev released a study, conducted by iHub Research and Research Solutions Africa, looking at how mobile phones are being used by those at the economic base of the pyramid in Kenya (living on less than US$2.5 per day). The study, funded by the Ministry for Foreign Affairs of Finland and UKaid, covered urban and rural areas of 6 districts in Kenya.

Non-traditional private equity financing can be a win-win solution for SMEs

(Credit: Elis Alves, Flickr Creative Commons)

The difficulties faced by Small and Medium-sized Enterprises (SMEs) in getting finance, especially in the developing world, have been well documented. The causes are equally well known. First, traditional bank financing (secured or cash-flow based) is often not available due to the lack of adequate collateral or the opaque modus operandi of many SMEs. Also, financial markets may not be sufficiently well developed to facilitate traditional private equity (PE) financing of SMEs. A typical private equity (PE) firm or fund requires controlling positions in a company it invests. But in Sub-Sahara Africa, most small businesspeople are both owner and operator of lifestyle businesses and have little interest in letting go of control of their company. Another constraint to the traditional PE financing model is the lack of exit channels such as a well-functioning initial public offering (IPO) or merger and acquisition (M&A) market. 

The Importance of Detecting TB Early

Miriam Schneidman's picture

As we enter the second year of the “Stop TB in my lifetime” campaign, it is time to take stock of where we are and look at the key priorities for attaining this worthy goal.  Beyond the banners urging the world to stop this curable disease are the faces of those afflicted by tuberculosis or whose lives were cut prematurely short. These faces remain etched in my memory and reinvigorate my drive to stop TB.

Water Cooperation at the National Level: The Case of Kenya

Dr. Robert Kibugi is a Legal/Institutional Expert for Ministry of Water and Irrigation in Kenya and a lecturer at the Centre for Advanced Studies in Environmental Law and Policy (CASELAP), University of Nairobi.

Legal and institutional changes in the Kenyan water sector are not new; the current water law was enacted in 2002. The law introduced extensive changes and reforms, including a separation between water resource management and water services that allows specialized agencies to perform the tasks.

This resulted in creation of the Water Resource Management Authority (WRMA) to manage and regulate water resources, and the Water Services Regulatory Board (WASREB) to regulate water services. The latter regulates the functions of Water Services Boards (WSBs), responsible for developing infrastructure, and those of water service providers (WSPs), which are primarily utilities that purchase water from WSBs and sell to consumers. Beyond water services and resources, the areas of water storage and irrigation, which address harvesting and productive use of water, were not part of the 2002 reforms.

The Fight to End Wildlife Crime Is a Fight for Humanity

Valerie Hickey's picture

Available in ไทย

Elephants in Kenya. Curt Carnemark/World Bank

Elephant ivory is on the march. Not elephants, but their ivory. The elephants are left bloodied and dead on the range. So are many rangers who work to protect a country’s natural capital. In the past 10 years, over 1,000 rangers have been murdered in 35 countries alone; the International Ranger Federation tell us that as many as 5,000 may have been murdered worldwide in that time.
 

At the CITES COP – the Conference of the Parties to the Convention on International Trade in Endangered Species – the halls in Bangkok ring loud with concern for the elephants and other charismatic species, particularly rhinos, that are being exterminated across Africa in pursuit of private profit, at the expense of communities that rely on nature for their food, shelter, start-up capital, and safety net in a warming world.


So why should the World Bank care? Our concern is to build strong economies and healthy communities by revving the engine of inclusive green growth as we prepare countries and communities for the impacts of climate change.

What does this have to do with elephant ivory you ask? Simply put, we cannot achieve our dream of a world without poverty without taking account of the rise in wildlife crime.

What Do Iceland and Kenya Have in Common? Lots of Clean and Renewable Geothermal Energy

Sri Mulyani Indrawati's picture

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Walking out of Keflavik airport as the arctic breeze hit my face at 50 km per hour, I thought to myself, “I love my job.”  A job that makes a tropical citizen like me enjoy the hospitality of the very warm Icelanders and allows me to learn from their experience is hard to top. With 320,000 citizens and just the size of the U.S. state of Kentucky, subpolar Iceland has a lot to teach us development practitioners.

We are only beginning to put together a vision for how to deal with the dilemma of a warming-- and therefore more unpredictable and punishing--climate and ever increasing energy needs. But Iceland has long ago put its mind to the challenge and now lives productively and peacefully in an environment that throws at it tremendous challenges and great gifts.

My appreciation of Iceland's strategy to make use of its environment and harness its renewable energy rose as I visited Hellisheiði Geothermal Plant. Feeling the rumbles of the earth and looking at the steam that puffed from its heart against the backdrop of a volcanic landscape, I was in awe both of nature and the people who have embraced its imposing power.

Open Government sees Promise after Kenya Elections

Robert Hunja's picture

After an impressive turnout in Monday’s presidential elections, one thing is clear about Kenya: citizens are energized and ready to participate in shaping the future of their country.

Despite concerns of violence, voters in Kenya were undeterred and turned out in historic numbers Monday - over 70% participation - to cast ballots in the country’s first presidential election since 2007.

The remarkable level of participation had election officials calling the turnout “tremendous,” as polling places were kept open hours later than scheduled to accommodate lines that stretched “nearly a mile long.” Voters formed lines at polling places well before 6:00 a.m. when the polls opened, and many waited for up to 10 hours to cast their ballots.

While this election is a significant success, its true impact on the everyday lives of Kenyans will depend of how the new administration governs. Kenyans should be able to participate in the decision-making processes of their new government in as robust of a manner as they did when electing it.

This will be particularly important as Kenya embraces fairly radical decentralization of political and resource management to the county level as mandated by the new constitution. More open and participatory processes will be crucial to maintaining accountability and effectiveness at the county level.

Reducing Dam Impacts and Costs by Thinking of the Land Above the Dam

Satoru Ueda's picture

In the World Bank we often discuss how important it is to integrate solutions across sectors. In Mombasa, Kenya, we have an example of how a comprehensive sediment management approach will allow the government to lower the environmental impact of a proposed dam and save tens of millions of dollars by reducing the amount of sediment that the dam traps. When too much sediment is trapped in a dam, the lifespan of the dam is shortened considerably so reducing sediment is key for long-term success.

Longreads: Can Graphene Drive the Green Economy?, Women and Mobile Financial Services, With River Blindness ‘You Never Sleep’

Donna Barne's picture

Find a good longread on development? Tweet it to @worldbank with the hashtag #longreads.

 

LongreadsA video about a “scientific accident that may change the world (or at least your battery life)” went “viral” in February.  Researchers at University of California, Los Angeles, found a way to make a “non-toxic, highly efficient energy storage medium out of pure carbon using absurdly simple technology,” says ReWire. The “graphene” battery is being touted as capable of “super-fast charging of everything from smartphones to electric cars,” according to ReWire. Responding to Climate Change (RTCC) asks whether the technology holds promise as a way to reduce greenhouse gas emissions. “Replacing heavier materials in vehicle manufacture with graphene, particularly in aircraft can lead to substantial fuel savings,” says RTCC.  Gizmodo anticipates how graphene could transform the gadgets of the future.

Making Open Data Work for Citizens: Four Lessons from Code4Kenya

Christopher Finch's picture

Code4KenyaEighteen months ago we watched President Kibaki launch the Kenya Open Data Initiative (KODI) to broad acclaim and fanfare.  All our initial expectations were very high. Some expected that Kenya’s vibrant ICT community would rapidly embrace open data, that there would be a rapid outpouring of open data sets from government agencies, and that open data would drive more informed development decision making.

However, although Kenya has a strong ICT sector, skilled development professionals, high cell phone penetration, a relatively open media and active CSOs, open data uptake has not been as rapid as some  expected. Traffic to Kenya’s open data portal has been consistent, with the Government’s portal generating around 100,000 page views a month, mostly from Kenya. The number of datasets on the portal has doubled from the initial 200 to more than 400 today, but still represents a tiny fraction of the data in Kenya.

So even in a country like Kenya with a dynamic ICT sector, simply making data available is only one step in a longer process.

The Case for Sharing Africa’s New Minerals Wealth With All Africans

Makhtar Diop's picture

In country after country in Sub-Saharan Africa, new discoveries of oil, natural gas and mineral deposits have been making headlines every other week it seems. When Ghana’s Jubilee oil field hits peak production in 2013, it will produce 120,000 barrels a day. Uganda’s Lake Albert Rift Basin fields could potentially produce even greater quantities. Billions of dollars a year could flow into Mozambique and Tanzania thanks to natural gas findings. And in Sierra Leone, mining iron ore in Tonkolili could boost GDP by a remarkable 25 percent in 2012.

My strong hope is that all the people living in these resource-rich African countries also get to share in this new oil and mineral wealth. So far, with one of few exceptions being Botswana, natural resources haven’t always improved the lives of people and their families. From what I see on my constant travels to the continent, economic growth in most resource-rich countries is not automatically translating into better health, education, and other key services for poor people.

Many resource-rich countries tend to gravitate towards the bottom of the global Human Development Index, which is a composite measure of life expectancy, education and income. 

One strikingly effective way to make sure that all people, especially the poorest, share in the new minerals prosperity is through safety nets and social protection programs. These are designed to protect vulnerable families and promote job opportunities among poor people who are able to work. This in turn makes communities stronger and more secure, while reducing painful inequalities between people.

Social protection programs are already central to poverty-fighting, higher growth national strategies across Africa, and have played a significant role reducing chronic poverty and helping families become more resilient in the face of setbacks such as unemployment, sudden illness, or natural disasters such as droughts or floods. These programs have also allowed families to invest in more livestock or grow more food, and increase their earnings. 


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