Matching resources with the population

‘The battle is not yet won’ says Dr Zachary ONYONKA

Kenya’s galloping birth rate, one of the highest in the world, risks jeopardising the country’s overall economic growth in the coming years. In this interview, Minister of Planning and National Development, Dr Zachary Onyonka explains he gavernment’s strategy to avert disaster.

· Minister, Government plans an economic growth that it hopes will outstrip the rate of population increase. It may end up chasing shadows if the birth rate is not effectively reduced. What is the gorernment’s strategy now?

- To begin with, we plan, as you said, to realise meaningful growth performance. If the rate of the country’s annual economic growth exceeds the rate of population growth, we will have no problems. We have to some extent been able to achieve that sort of difficult target because the rate of population growth has been quite high - between 3.4% and 3.8% for some time.

Now during the past two decades, we have been fortunate enough to register economic growth rates that exceeded, on average, 5.5%. Statistically that meant that in real terms we were able to register a positive growth particularly in terms of per capita. However, it is important to point out that it has not been easy. Obviously, you have here a situation where, for instance, the dependence ratio is very high, that is that we have a population structure, where over 50% of the people are below 20 years old. Now that has major implications for our overall performance, not just in terms of aggregate growth, but in terms of demand for social services and demand, for example, for education, to which we presently allocate over 30% of the annual , budget. This means that not many resources are left to cover the other social, services, like health, for which there is a tremendous demand, given this very young population structure and incidence of illness among the under-fives and so on.

But all the same, even in those areas, we have been able to register very significant improvement. However, it is obvious that this sort of relationship can hardly be maintained for long otherwise major imbalances will emerge, because it means that other sectors and sub-sectors do not receive adequate resources to perform as expected.

So this country for nearly two decades now has had a positive population policy. It started, of course, with NGOs and over time, and rather quickly, the government assumed a major responsibility by subsequently creating the National Council for Population. It is very interesting to point out that, locking at the recent data, especially the information we have obtained from the recent demographic survey, it shows clearly that there is new a downward trend in the rate of population growth. The inter census growth apparently has been 3.4%, which is lower than the 3.5% rate we were using. Despite that decline, the momentum within the system is still there. The children who are going to constitute the labour force of tomorrow are already here. The universities are full; we have 40 000 students in them. Compared with other countries in this region, that is a fairly high figure. Nearly four or five times in some cases. That means, of course, major efforts in employment creation, and it is in this context, that recently His Excellency the President directed the Party to look into the issues. In fact we are just in a position now to issue a sessional paper on development and employment. That is our next phase in our efforts to create more jobs. Of course, it is in Kenya, an immensely complicated problem, but we are determined to continue investing substantial resources to try to modify this relatively high rate of growth in population, and in this connection, I should add that we are very grateful for the assistance we have received from so many donors, both official and unofficial. In fact, as I have said earlier, in the area of population, the NGOs played a tremendous role but in more recent years the government has played a very dominant role both in seeking external resources and in allocating own resources for that purpose. The battle is not yet won and that is why we have adopted a policy of continued commitment to a positive population policy.

· In the short term though what do you intend to do, given the constraints of the structural adjustment programmes whereby you have been cutting back on investment, particularly on-education, and the demand for more places in the universities is growing. We are talking about the skilled labour force of tomorrow?

- We have of course problems that arise from structural adjustment, and we all know that this is why there has been concern for the social element of structural adjustment. Now given the sort of growth rates we have been able to record in more recent years, my honest view is that we still have some breathing space in coping with this problem. But we will have now to take very firm decision, for example, on university admissions. We are saying that, looking ahead, we are likely to limit the figure to about a 10 000 annual intake. If not, the figure seems set to escalate and apparently, in this country, there is no limit to the demand for education. Indeed, as I pointed out, we invest very much in this, but this is part of the social device, by which I mean, developing the human being and therefore it becomes so difficult to cut substantially in that sector.

What we are trying to do in the short and medium term is to reorient our whole educational system from what we have been doing before where we were producing mainly people on the primary and secondary level who were looking for white-collar jobs. You might have read in the local press that, for example, in respect to university admission, we do restrict those doing a Bachelor education arts. There is still a bit of room for Bachelor education sciences and some of the arts-English, and other specialised areas.

So we are trying to readjust the educational system to match the potential for employment. And incidentally, I should point out here that we are not looking at the problem in isolation. We are locking at it more broadly. We are saying that within the educational sector, we should give much more emphasis to technical training and here we have brought in, for example, the informal sector, the small-scale enterprise sector. In fact our second sessional paper is on our efforts to translate into concrete action this policy. The small-scale enterprise paper is really a part of the implementation policy of the larger sessional paper on employment and development. I think what we have to do, looking at the realities of the situation, is that we have got to create an environment whereby most of our people, with appropriate training and other measures of support have to go in for self-employment. And this we are really determined to do in a big way. We are looking for resources. We are hoping that donors will come out in full to support this programme, because what we are to trying to say is: “look we no longer have a situation in Kenya where you come out of school and government guarantees automatic employment. That is not feasible; that is not realistic. You had this education; put it to use. If you need support in terms of tools and hands, you have heard of the recent introduction of what we called the ‘rural enterprise fund’ where we shall be lending money with, of course, extension and supervision with out requiring the normal security preferred by the banks. Take advantage of it.”

We realise also that this is no mean undertaking. There is the ample experience of many countries that it takes a determined effort to make it work. But we believe that many of our people would be fully employed if they have the tools, the capital to do what they are already doing. So these funds will go a long way to support people who show the initiative and entrepreneurship and others out of the universities and polytechnics who really, we think, have new the capacity to create mini enterprises, which we hope will develop into large enterprises. So, in the medium and short term this is the way we are looking at the problem, but we hope that in the longer term we should experience a further decline in the rate of population growth. We have a determined policy and commitment. And then, in this country you know, leadership, right from his Excellency the President way down to the party, KANU, we are all committed to this population policy and we hope, in another decade or so, to attain a level where we can match employment prospects with the labour demands. We are aware it is not easy but if you have a stable government committed to these polices a lot can be done. This is not an easy panacea from what we have seen from other countries.

· Labour-intensive technology has been, and I am sure still is the policy of this government. In planning export-oriented industry, how would you reconcile this policy with the need to meet the high standard demands of the North. You will need sophisticated equipment, won’t you?

- I don’t think that there is a real conflict here. There are areas where we have to go in for certain technologies. We have to look at the problem, as a whole. For instance, let us look at the whole question of productivity. We believe, for example, that in the small-scale farm sector, this country has managed fairly successful development. But this is one area where we new knew from local research and observations generally that there is still a lot of potential for better performance; that farmers for example instead of producing an average of 20 Kg bags of maize per acre, we knew many of them are producing at a much lower level of about 15 Kg per acre. We believe today that there should be an average of about 32-35. Now, that requires changes, not only in respect of capital investment, but, also the technology. Out of the research that has been undertaken recently, we definitely have made some major headway. We now know from KARI, the Kenya Research Institute and other related centres, that with a change in the technology, the small-scale farmer does a lot of things on his farm. This country can, for example, produce much more maize or corn than in the past and that pertains also to several other crops. Obviously it is when this small-scale farmer becomes more efficient and more productive, able to produce for example maize at a cost level that is competitive, that the country will also become competitive. At the same time there are other sectors and sub-sectors in, for example, the Juakali small-scale enterprises, where it is quite evident that some of the equipment in use is definitely inefficient. A simple example is the way they used to make the GIKO, the little device for cooking which is fairly widely used. Now, it has been shown again that the technology used was inefficient because it involves a lot of heat loss which means that almost half of the firewood used is lost. And at very little cost, by the way, by just changing the way things are done, we have been able locally to manufacture GIKO that actually conserves energy and therefore is much more efficient and beneficial to the community as a whole. Now, I see no major conflict myself. However, you need to realise one thing, that in the past decade and a half or so, it is true, we did have some enterprises that were heavily capital-intensive. And the ratio between the formal and the informal sectors is remarkable. The ratio in fact could easily be something from one to ten, or one to fifteen, in other words, where you need to invest, for example, 1000 or 1500 pounds to generate a permanent job in the formal sector, you need maybe 100 pounds in the informal.

Now that is a very big difference. You referred to the export sector. Our main consideration actually is to improve the quality of some of the things produced in the informal sector. If the finish is good they become easily exportable. If you look at the finishing of a lot of what these people were trying to export, they were rather poor. But if you see those items today after five or six or seven years of experimentation, there is a big difference; they can easily be exported to the neighbouring countries in the PTA and even further afield. So, admittedly, there are areas where capital-intensive methods will be necessary, given the nature of the enterprise. But we have realised that if you are going to have a broadly-based development strategy, then you have got to involve a technology within the reach of the majority of these potential entrepreneurs, and this is really what we are trying to do. I will conclude on that by simply pointing out that this is an area where learning by doing is proving to be very interesting. People who before had no opportunity, no tools to operate, when these things become available are now budding, small scale entrepreneurs able to employ a lot of people. But eventually we also do hope that many more of those employed themselves will become entrepreneurs.

· Talking about farmers, given the shortage of arable land and the proven efficiency of smallholders, hasn’t the time come to break up the larger farms?

- There are not very many large farms in this country. In fact, in some of the areas where there are what are called large scale farms, the nature of the soil is such that if they were three to four acres in size, as they are for example in the area where I come from in West Kenya, you could not run them as viable enterprises. In fact, what quite often amazes me is that people talk as if there are a vast number of large-scale farms lying idle. I would like to emphasise here that where there are fairly large-scale farm enterprises in this country, a lot of that land is owned by the ADC (Agricultural Development Corporation), a parastatal that has done a lot for this country; for example, research into maize and bettering of seed for sale to farmers and so on at fairly reasonable prices. There will be scattered cases of what lock like restively large farms. Take a place like West Gusii. Now if you know the topography and geography of the area, what will you do with a farm unless you have about 100-200 acres? The soil condition is such that it is not easy. You go down to Kitale where there are what used to be very big farms, most of them under cooperatives. About five years ago, the President directed that these people receive their titles and this has been done to a very large extent. You will always come across scattered cases of individuals, whose land looks like a big farm. Our policy at the moment is that whatever land one owns must be put to productive use. Some farmers have done that. Around the area where there are supposed to be large-scale farms, I must confess that very few of them, if subdivided, will be viable. Well there are some, which can be divided but the number is really small. If you are to view that as an alternative way of making land available to small-scale farmers, it seems to me the effect will be rather negligible given the number of people involved.

However, where we are trying to make some headway is in the exploitation of our arid and semi-arid areas. We realise that in terms of capital investment, it is quite high. But when you compare the soils found in these areas with the sort of lands in other areas, it is clear that with a little irrigation, construction of dams for livestock breeding and so on, we can do much more with them. Obviously, you know, there has been a gradual shift of a lot of farmers from other areas into some of these areas. But they require special technology which, I must submit, we have to learn to copy from those who have experimented successfully with it.

· Kenya is relatively attractive to foreign investors. Privatisation is on the cards: are there specific conditions under which foreign investors can acquire shares?

- I am incidentally a member of the Committee which is at this moment locking into it. We have already had several meetings of the parastatal divestiture committee. We have formulated the general principles. But in dealing with the problem, we are looking at each case on its own merit. There will be instances where the foreign investor would be allowed to take shares or purchase an enterprise. It is a fairly flexible and pragmatic programme. When you look at the enterprises in question, they are very different, that is one thing we are all learning. Some are doing well, others are in a lot of trouble. People tend to generalise but it is quite clear that some have problems of management. There is no way the government is going to have to spare people to do the work of management: others have what you might call unrealistic capital bearing. So really in terms of viability and management, they can hardly perform well even in the longer term. We have already handled almost two dozen cases of these enterprises and many more are coming. You know there are over 200, but we are moving pretty fast - we are meeting fortnightly.

· Minister, you are very well versed in ACP-EEC matters. How would you assess Kenya’s relationship with the EEC given the LomV Convention and the approach of the single European market?

- First of all, I should point out that our relations with the EEC have been really excellent. They have been one of our major donors, very broadly dealing with microprojects and a lot of other larger funding of projects and programmes generally. In fact they have been funding some of the more important aspects of our national economic development in the agricultural sector on which we depend. They have played an important role particularly in more recent years in trying to restructure certain parastatals like the National Cereals Board and so on. Of course, the European Investment Bank has also put some money into some of the projects. And there are those rnicroprojects and programmes that are extremely popular right at the grass roots which have done a lot filling in the gaps in some of the development programmes and projects in education, in health, in water supply, roads and so on. Now, clearly, we have not always got what we thought would be ideal offers. You know these are reached after lengthy negotiations and discussions. But looking for example at the LomV Convention, there are concessions we consider would be beneficial to my country and which had been the bone of contention during the other Lomrogrammes. But definitely, compromises were struck in terms particularly of exporting, making it much more favourable and easier for our entrepreneurs to do much more business than was the case before. Admittedly, and I was party to the negotiations and the signing, we know that we still have some ‘grey areas’ if I may use that term, where the future is not very clear particularly in the context of the GATT negotiations. In my view these are the issues. We realise that politics impinges very heavily on what is finally settled upon, but it is also important for us to point out that whatever concessions we agree to, it needs to be noted that the international environment generally has proved to be much more hostile to the African countries and the other ACP countries than even we had anticipated.

The days ahead are not very rosy, particularly when faced with structural adjustment programmes at the same time as being expected to cope on your own with international competition. The environment generally still locks rather difficult. There is the whole question of debt. We are grateful that so many of the donors have moved in what I consider a positive direction, ie in a direction that involved the writing off of so many of these debts. But the remaining burden is still very heavy indeed for these countries. For the last two decades, I have been saying that I could not see how some of these ACP countries could generate meaningful, positive balances, for example, the balances of payments to be able to meet their external commitments. Some of them, in terms of viability, are really difficult cases. Nothing is in their favour and this is not likely to change because, for example, of the natural environment in which they find themselves which makes the prospects difficult Some of them produce practically no-, thing they can export to any other country either within the regional blocs or to other countries.

So, all in all, some of the provisions agreed to would help to soften the landing, so to speak. But the remaining problems in my opinion are formidable and I would like simply to add that the North, the European Community and the other more developed countries need to be more realistic. It is evident by now from the African Recovery programme discussed in the UN that the dramatic change expected during the last couple of years has not materialised and my suspicion is that in many of the countries, the situation is going to go from bad to worse. Of course, in some instances, problems of internal instability and conflict render the whole thing almost meaningless because you see, you need a viable stable government and governmental authority to manage these things meaningfully and when these factors are absent, it is difficult to see how some of these countries can be expected to perform well. I don’t know whether in fact some of the approaches being recommended by the donors - conditionalities to aid - can solve the problem. The problem is much more fundamental than what appears at the surface. They are intractable problems, very often domestic, which some of the donors and outsiders do not fully appreciate. From the outside they look simple. If you push this knob things will work. It does not work that way.

So there is the political economy of the whole business that is very intricate. That is the way I see the situation. Some countries might have recorded positive growth but not what you regard as steady, stable and dependable growth. So you see these gyrations. This year there is positive growth, the following year a negative growth of 4% then the following year a positive growth of 1%, the fifth year a negative growth of 6%. So you do not have there what can be regarded as viable growth and development. We have problems and I am not sure that the external environment is any easier than it was in the last decade.

Interview by A.O.