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Managing human wildlife interaction: comparative study of Kenya, Canada and South Africa

Abstract

Watching wildlife draws thousands of tourists each year to Kenya, Canada and south africa. The combination of this large number of tourists and wildlife leads to a variety of wildlife human interactions. The nature and implications of this interaction is the focus of this essay. This essay will further explore some solutions to pervasive problems of conflict between human and endangered animals. There can be no doubt that human wildlife conflict has brought a decline to many species, woodroffe et al (2005) and these endangered species can equally cause serious damage to human lives and livestocks (Woodroffe et al (2005), therefore, examination of the nature of human wildlife interaction using the ideologies of sustainable tourism in form of economic, environmental and social impacts will be carried out. The essay goes on to evaluate the sustainable management tools being used in these areas of the case study to reduce these human wildlife conflicts. It shall also concisely treat the benefits of wildlife tourism to the local communities, the tourists, the country and the global tourism industry at large.

More than that, In the conclusion part, the Environmental, Economic and the Social impact of wildlife tourism will be discussed in a way that sustainable tourism could be better implemented in these areas (Kenya, Canada and South Africa).

Introduction

Kenya, South Africa and Canada are all considered to be well established and successful as tourism destinations, Irandu.M.E, (2004), Hudson. S and Lang. N. (2001), and Heath, E. (1992). Tourism is defined according to world Trade Organisation as “travelling to and staying in places outside ones’ usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited” (WTO, 1995). There are several forms of tourism which include eco-tourism, ski-tourism, whale watching, leisure travelling, winter tourism, mass tourism and wildlife tourism.

To the developing world, “tourism is one of the fastest growing industries, and wildlife tourism is the fastest growing component of this industry”, Gossling, (2000). Wildlife tourism is seen as a driving force for developing countries where many live in abject poverty, especially in the rural areas, Ashley and Roe, (1998). Tourism is vital to economy development in terms of the employment opportunities it creates and the huge foreign exchange it generates for those communities which rely on it. Sinclair. T. M (1998).

In recent years tourists have developed an increasing desire to watch wildlife in their natural environments, Reynolds & Braithwaite, (2001), This captivation and fascination has led to the creation of a sub-sector of tourism known as wildlife tourism. Duffus & Dearden, (1990), Reynolds & Braithwaite, (2001)

Wildlife tourism is a form of tourism that encompasses the watching of fauna and flora in their natural habitat. It is distinct to both eco-tourism and nature based tourism as it is about tourism that flourishes on specific interest in wildlife. Although in the general terms wildlife refers to both fauna (Animals) and flora (Plants), in the tourism sector it is generally understood to strictly mean fauna (animals), Braithwaite & Reynolds, (2002), Higginbottom et al., (2001), and Shackley, (1996).

Roe et al, (1997) added that Wildlife tourism is becoming an increasingly important component of tourism worldwide, while Duffus & Dearden, (1990), Reynolds & Braithwaite, (2001), further added that tourists have developed an increasing desire for the interaction with the natural environment and wildlife. Wildlife benefits has a direct impact on a country’s economy. For example, revenues generated from wildlife tourism are partly responsible for the development of wildlife as a major land use on private land in South Africa. Hearne & Mackenzie, (2000).

However, in spite the growing benefits of wildlife tourism, the close proximity of people and wildlife led to interactions that can pose threats which directly or indirectly cause injury to wildlife people have travelled from far and near to watch. Consequences of human wildlife conflict can be both direct, including injury and death from encounters with dangerous animals, and indirect, including loss of crops, livestock and damaged infrastructure, Okello and Kiringe, (2004). Example of Human wildlife conflict can be seen in Massai Mara, Kenya, where elephants destroy crops, killing and injuring human and livestock, Thouless, (1994). In South Africa; according to the research carried out by Anthony, Scott, and Antypas, (2010), 482 human wildlife conflict incidents were recorded from 1998 to 2004, and the most problematic species are buffalo, lion, elephant, hippopotamus and crocodile, again Frump, (2006) reported that between December 1996 and August 1997, 11 (possibly more) tourists making their way on foot from Mozambique across the Kruger National Park were reportedly killed by lions, and lastly, in Alberta, Canada, wolves caused 2,806 deaths among domestic animals, mainly, cattle and to a lesser extent dogs, horses, sheep, chickens, bison, goats, geese and turkeys in just within a period of 14 years (1982-1996), Musiani et al., (2003), and further research showed that polar bears have injured or killed people living and working in the Arctic region, Fleck and Herrero (1988: 155).

The basis of this conflict started from an increase in human population through reproduction and immigration, coupled with increasing land conversion from forest to farming (agriculture), Barnes (1996), Campbell et al. (1999), Gachago and Waithaka (1995). Concurrently, the wildlife populations in the ecosystem are growing as well, Carl-Erik and Anders, (1996), while outside protected areas wildlife are becoming constrained to smaller areas of the forest fragment. Moreover, due to the danger that most of these wildlife pose to people and the catastrophic damage that they inflict on crops, human wildlife conflict is more frequently reported and less easily tolerated by the local community, but “Wildlife tourism provides revenue to the local community, which is sufficient for local people to value, and therefore protect their wildlife heritage as a source of income”. Godwin (1996: 288).

BODY

Sustainable Tourism is defined by the World Commission on the Environment and Development (WCED, (1998)) as “Tourism that meet the needs of the present without compromising the ability of the future generation to meet their own needs”, furthermore, Mowforth, (2008: 102) discussed about the issues of sustainability, he said, sustainable tourism can be seen in several facets; low impacts, responsible, green, and environmentally friendly.

Sustainability can be seen in the following forms; Area Protection (AP), Carrying Capacity Calculator (CCC), Visitor Management Techniques (VMT), Environmental Impact Assesment (EIA), Sustainability Indicators (SI) and Code of Conduct. Out of these tools afore listed, only three will be further discussed and scrutinized in the later paragraphs, including, the Area Protection, Carrying Capacity, and lastly, Consultation and Participation Techniques (CPT).

Area Protection also known as protected areas, simply means “a geographically defined area which is designated or regulated and managed to achieve specific conservation objectives, this is a form of legislation by the Government to protecting parks and reserves in other to aid sustainability. Protected areas can be in the form of Country parks, Biosphere reserves, wildlife refugee and reserves, biological reserves, areas of outstanding natural beauty and National Parks” Green and Paine (1997). The Importance of Protected Areas in Kenya, Canada and South Africa is basically to strictly shield wildlife from all commercial extractive activities such as Poaching, lumbering, hydroelectric projects, resource extraction, and hunting. Further more, it provides and supports the followings; scientific research, natural resources, educational opportunities and recreational activities. Arguing the success of, the implementation of this sustainable tool in Kenya, it has denied the Maasai their traditional access to, and use of their land, Talbot and Olindo, (1990). Secondly, the increase in the population of wildlife within Maasai Mara has increased the cost of livestock and agricultural production. For example, the migratory wildbeast, zebra and gazelle compete directly with the Maasai livestock for food and water, Croze et.al., (1978), Caughley and Sinclair, (1994) they also spread diseases, and wildlife are dangerous because they kill livestock and people. In response to these human-wildlife conflicts, the Maasai can destroy wildlife by killing in immediate defence of life and property, they can influence wildlife numbers and distributions through bush burning, and farming, by fencing around properties, waterholes and fields, and by erecting new infrastructures. Furthermore, they could actively deny access to tourists as opposed to passive denial following agricultural developments, Norton-Griffiths, (1995). In South Africa, Problems of animal and crop damages are minimal because most of the protected areas are fenced and hunters are been sent for training by the Department of Nature Conservation, to instruct them in the care and use of hounds and other methods of predator control, Allison, (1961).

Carrying Capacity, Baud-Bovy (1977, p. 184) quote a definition of carrying capacity as the “number of user-unit use-periods that a recreation site can provide each year without permanent biological and physical degradation of the site’s ability to support recreation and without seriously hampering the quality of the recreation experience”. Mathieson and Wall (1982, p. 184) also define carrying capacity by considering the physical impact of tourism on a destination from the experience and environmental aspects as “the maximum number of people who can use a recreational environment and without an unacceptable decline in the quality of the recreational experience”. For the sake of this essay, Carrying Capacity will be defined as the capacity of the destination area to absorb tourism before negative impacts of tourism are felt by the host country. In other words, this capacity is based on how many tourists are wanted rather than how many visitors can be attracted. Invariably, attention is placed more on the host community and the population of wildlife than the tourist. Carrying Capacity can be sub-divided into seven parts, which are: physical carrying capacity; ecological carrying capacity, social carrying capacity, environmental carrying capacity, limits of acceptable change, real carrying capacity and effective or permissible carrying capacity. (Mowforth, 1998. P. 116), but in this essay, only the physical carrying capacity and social carrying capacity will be discussed.

Physical carrying capacity (PCC), Hovinen (1982) defines physical carrying capacity as the maximum number of visitors that can be accommodated without causing excessive environmental deterioration and without leading to a decline in visitor satisfaction. In the case of an individual tourist attraction, it is the maximum number that can fit on the site at any given time and still allow people to be able to move. This is normally assumed to be around 1m per person.

“PCC per day = area (in metres squared) x visitors per metre x daily duration” (Mofworth, 2008. P. 102)

For South Africa, the Physical Carrying Capacity was implemented and adopted in 1960s to determine the maximum number of people who could use recreational area without hampering its essential qualities (Wager, 1964). Again, South Africa’s National Parks Act (South Africa 1976, as amended) makes provision for the utilization of national parks for the sustained benefit and enjoyment of the public while simultaneously maintaining their natural qualities and their potentials to meet the needs and aspirations of future generations (National Parks Board 1980. P. 143), in short, this has helped and is still helping in the significant reduction of the number of tourists. In Kenya, the same tool was adopted around 1960s. This stated definitions reinforces that there is no host population to consider when carrying capacity is to be used, the increase in price could be a way to limit the number of visitors in these areas. The following problems are associated with carrying capacity in the Kenya and South africa; inadequate Government funding, deforestation, indiscriminate hunting, and lack of management plans, but compared to Canada which is a more developed country, the Government has the responsibility of financing wildlife projects and ensuring a qualitative management plan. (sound of vehicles, alters reproduction levle of wildlife, it is seen that the followings affect physical carrying capacity calculation; area size, accessible space, visual impact, climate, aesthetics, accommodation quality, availability of facilities, transportation, number of people that can be accommodated, just to mention a few.

Effective carrying capacity (ECC) “is the real carrying capacity corrected to allow for the difference between the actual management capacity and the ideal management capacity. The actual management capacity of the monument is given by the number of personnel e.g. administrative staff, park guards, and guides employed. The ideal management capacity is given by the number that would be required to fulfil all functions allocated to the staff of the monument.” Mowforth, (2009). The formular is given bellow.

ECC=RCC?FM. – Mowforth, (1998. P. 108)

Social carrying capacity, “capacity thresholds are reached when the number of tourists approaches level which strain the ability of the host area to provide a good visitor experience. The scale and pace of tourism development should therefore respect the character of the area, Value for money, and a high-quality tourist experience should be promoted”, Elwyn Owen (1993: 463). Again, Socio cultural carrying capacity relates to the negative socio cultural activities peculiar to tourism development. its indicators include the followings; reduced local tolerance for tourism, Reduced visitor enjoyment and lastly, increased crime. For example, Steven, (1998) said “In December 1996, the capacity quotas (per entrance gate) were not strictly applied on public holidays, which resulted in a flooding of amenities, conflict between tourists and widespread littering at KNP in South Africa due to poor management of this sustainable tool. Although the policy of the KNP in the past was to control tourist numbers by using vehicle/road ratio and the zoning system which has been unsuccessful in preventing overcrowding in the Skukuza area (South Africa). The guideline of 0.75 vehicles per kilometre of road cannot be regarded as a scientific guideline to control tourist numbers, as the spatial variation of traffic in the park, as well as the preference of motorists for tarred roads, makes it an unusable criterion. Venter et al. (1998) proposed the idea of developing day visitor facilities at the camp to reduce the overnight visitors, providing environmental education and entertainment on the borders of the KNP could relieve the tourist pressure on picnic spots and day-visitor facilities at the main camps.

Lastly, Consultations and participation techniques, Stewart and Hams (1991) said “Sustainable development must be built by, through, and with the commitment of local communities. The requirements of sustainable development can not merely be imposed; active participation by local communities is needed.” In the tourism industry, sustainable development include the participation of the host communities as one essential element or principle of that sustainability. Therefore, consultation and participation has a lot to do with the Stakeholders, NGO’s, local community/host community, government, and the local authorities, just to mention a few. Consultation can be in the form of meetings, public attitude survey, stated preference survey, contigent valuation method and delphi technique, but for the sake of this essay, Meetings/ consultation will be explored in the next paragraph.

Meetings, When deligates are being sent to meet over the issue of sustainability, they delibrate, brainstorm and conclude on the way forward to better implement some essential tools of sustainability. In Kenya, KWS believes that conservation of wildlife outside the protected areas cannot be achieved by protecting animals and avoiding issues of people’s needs, rights and their conflicts with wildlife. Furthermore, conflicts cannot be eliminated without incurring a double loss: destruction of the animals that are the cause and maintenance of expensive control (shooting operations). A sustainable strategy of integrating wildlife management with landowners’ common objectives is preferable, and KWS aims to establish wildlife as a land-use alternative in areas outside the protected national parks and reserves.

Toward this end, KWS has started the Community Wildlife Service (CWS), a pilot extension service, to establish modalities for community partnership and management of wildlife. CWS encourages landowners in selected conservation units (COUs) to allow wildlife to inhabit their land and also to accept training and certain responsibilities delegated by KWS. In return, landowners receive certain wildlife-related revenue-sharing and consumptive-utilization enterprises. In Canada, the Canada Wildlife Service (CWS) “manages wildlife matters that are the responsibility of the federal government. These include the protection and management of migratory birds, nationally significant habitat and species at risk, as well as work on other wildlife issues of national and international importance. In addition, the department does research in many fields of wildlife biology and provides incentive programs for wildlife and habitat stewardship.” Canadian website, (2011b). CWS enforces a law against poachers after brainstorming and delibrating over a way of resolving the human wildlife conflict, most especially, conflicts regarding the grizzly bears.

In South Africa, Southern African Development Community (SADC) are responsible for the conservation of wildlife. They too partner with the local community toward the anti poaching exercise going on with the grizzly bears and the geese but this is done in a well developed way.

Conclusion.

Of all matters, through the afore-discussed ways and sustainable management tools, Kenya, South Africa and Canada are striving to manage the resultant issues and challenges in their peculiar human wildlife interactions. These conflicts can be continually managed through constant review and restructuring of these sustainable tools to meet their peculiarities. Kenya and South Africa should educate the locals on the conservation philosophy which is changing from the traditional approach of strictly managing reserves in other to give absolute protection to wildlife and moving to replacing it with a more realistic alternative that provides tangible benefits to local communities and empowering the locals in other to manage the resources. Martin, (1984), Lewis et al., (1990). but before alternatives can be designed, the relationship between protected area and local people must be clearly understood, the Government should brainstorm with all the stakeholders involved before concluding on a policy for protecting these areas. To succeed today, conservationists should take into account the needs of the locals who share their land with wildlife. This essay has examined some of the ways in which wildlife can be valuable to local people and made to pay for its own conservation.

According to Eltringham (1994), the locals are the one paying for the cost of wildlife conservation, for example in Kenya, the peasant farmer whose crops are distroyed by elephants becomes destitute while visitors from overseas enjoy watching wildlife at minimal cost. One can not expect the animals to be conserved and tolerated under such circumstances and it is now generally accepted that in the long term, wildlife will survive only if those people living in close contact with it want it to. The local are unlikely to do so unless they receive some benefits, this is not necessaryly to be in cash terms because wildlife can pay its way, for example, through the supply of meat to a community, Hudson et al, (1989), Robinson and Redford, (1991).

This essay also notes the lack of wildlife knowledge on the part of local community operators, a lack of consumer awareness on the part of the tourists and an underutilization of potentially advantageous partnerships between local product suppliers and tour operators. And the conflict rate is severe where reserves are sorrounded by high densities of people. Harcourt et al. (2001). Most significantly, Kenya lacks adequate and experienced manpower in wildlife tourism management, wildlife in this area can be better managed if the assistance from the government and an international aid can be increased towards educating (sponsoring staff for national and international training), sophisticated gadgets like investing in guarding weapons, helicopters and medicines.

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Free Essays

Promoting the Right to health in Kenya

CHAPTER ONE
INTRODUCTION

1.1. Background to the study

The Constitution of the Republic of Kenya provides for one’s right to health. It states that every person has the right to the highest attainable standard of health, which includes the right to health care services including reproductive health care.

For one to wholly appreciate the magnitude of this right, it is imperative to have a basic understanding of the term ‘health’. The preamble of the 1946 World Health Organization’s (WHO) Constitution defines health as a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. It goes on further to state that the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition. This right is broad in its scope and entails the right to access essential medicines.

The International Covenant on Economic Social and Cultural Rights, Article 12, states that the steps taken by the state parties to the present covenant (such as Kenya) to achieve the full realization of the right to health shall include those necessary for the prevention, treatment and control of epidemic, endemic, occupational and other diseases and the creation of conditions which would assure to all, medical services and medical attention in the event of sickness. This right[2] was expounded by the United Nations Committee on Economic, Social and Cultural Rights in its General Comment No. 14 on the ‘Right to the Highest Attainable Standard of Health’ paragraph 12, to include access to essential medicines. In fact, it went further to explain access to essential medicines to include three main elements. First is the ‘physical accessibility’ whereby, the good or service must be within the safe physical reach of majority of the population. Second is the ‘economic accessibility’ whereby the good or service must be affordable to a majority of the population and third, ‘informational accessibility’ whereby the right to seek, receive and impart information concerning health issues is safeguarded.

Economic accessibility to essential medicines is hampered by the fact that majority of Kenya’s population cannot afford to buy these essential drugs. This is largely due to the fact that, protection of intellectual property rights, specifically patents[3], leads to an increase in the price of these drugs. This is because, a patent is an exclusive right that enables the right holder to prevent others from making, using, selling or importing the invention for the duration of the patent right; usually 20 years as provided for by section 60 of the Industrial Property Act (2001) of Kenya that states, ‘A patent shall expire at the end of twenty years from the filing date of the application’.[4] As a result, a monopoly of sorts is created by the right holder who is able to control not only the output as per the demand but also control the price of the patented product. Thus, translated to pharmaceuticals, the price of essential medicines is dependent on the price offered by the patent holder and as such a higher price is often quoted than that which is within the range of those most in need.

It is because of this that the World Trade Organization (WTO) came up with compulsory licensing in an international agreement referred to as the Trade Related Aspects of Intellectual Property Rights (TRIPS)[5]. This agreement neither defines compulsory licensing nor specifies when exactly a compulsory license can be granted. It does however; stipulate under Article 31 that any WTO Member such as Kenya can issue a compulsory license after certain procedures have been met. This was further embodied in our Industrial Property Act of 2001 that attempts to give a concrete definition of compulsory licensing. It describes compulsory licensing as the means by which a government can license to a company, government agency or other party the right to use a patent without the consent of the patent holder. Part XI of the Industrial Property Act (2001) provides for the exploitation of patented inventions by the government or by third persons authorized by the government. Section 80(1) (a) of the aforementioned Act, provides that such exploitation may only be carried out on the basis of public interest, in particular, national security, nutrition, health, environmental conservation or the development of any other vital sector of the national economy so required. Section 80 (1) (b), further provides that the Managing Director of Kenya Industrial Property Institute (KIPI), can on application to the licensee, in the prescribed form and after consultation with the Institute and the owner of the patent, order that the protected invention shall be exploited by the government ministry, department, agency or other person as the Minister may designate in the order, subject to the payment of adequate compensation[6] to the owner of the patent in accordance with this section.

It is important to note, however, that compulsory licensing cannot be awarded arbitrarily. In addition to the above mentioned requirements, Section 74 (1) provides that a compulsory licence shall not be granted unless the person requesting the licence satisfies the Tribunal that he has asked the owner of the patent for a contractual licence but has been unable to obtain the licence on reasonable commercial terms and within a reasonable time; and offers guarantees satisfactory to the Tribunal to work the relevant invention sufficiently to remedy the deficiencies or to satisfy the requirements which gave rise to his request. This prerequisite shall be waived in the case of a national emergency or other circumstances of extreme urgency, provided the owner of the patent shall be so notified as soon as is reasonably practicable. Section 75 (1), also states that in considering a request for a compulsory licence, the Tribunal shall decide whether a compulsory licence may be granted and shall then, if it decides in favour of the grant taking into account any terms agreed by the parties, proceed to fix the terms which shall be deemed to constitute a valid contract between the parties and shall be governed by the provisions of contractual licences. In fixing the terms, the Tribunal shall ensure that the compulsory licence is limited in scope and duration for the purpose for which it was authorized; is limited predominantly for the supply of the domestic market;[7] does not entitle the licensee to grant further licences without the consent of the owner of the patent; is non-exclusive and provides for the payment to the owner of the patent of remuneration which is equitable with due regard to all the circumstances of the case, including the economic value of the licence.

Furthermore, Section 77 (1) states that a compulsory licence may be cancelled by the Tribunal if the licensee fails to comply with the terms of the licence; or the conditions which justified the grant of the licence have ceased to exist and are unlikely to recur, provided that the legitimate interests of the licensee are adequately protected.

This dissertation thus aims at examining how a human rights approach might inform the use of compulsory licensing particularly in the area of pharmaceutical patents. It does this by looking into the provisions of the Industrial Property Act (Number 3 of 2001) that provides for compulsory licensing as a mechanism to enhance access to essential medicines and how these provisions in turn help to promote the fundamental right to health in Kenya. Moreover, this dissertation tries to pose the feasibility of casting a delicate balance between the rights of members of the society vis-a-vis the rights of patent holders.

1.2 Statement of the problem

The Constitution of the Republic of Kenya provides for the protection of property. Section 40 (1) clearly states that every person has the right, either individually or in association with others, to acquire and own property of any description and in any part of Kenya.[8]

Section 40 (2) further states that:

Parliament shall not enact a law that permits the State or any person to arbitrarily deprive a person of property of any description or of any interest in or right over any property of any description or to limit, or in any way restrict the enjoyment of any right under this article on the basis of any grounds specified or contemplated in article 27 (4).[9]

Moreover, section 40 (5) goes on to categorically provide that the State shall support, promote and protect the intellectual property rights of the people of Kenya. The word ‘shall’ in my opinion has been used to bolster the obligatory and compulsory nature of fulfilling the promotion and protection of this right. It must be noted that human rights ideally should not be in competition with each other, but rather complement each other. In as much as intellectual property rights, specifically patents, are protected in the Industrial Property Act of 2001 and indeed in the Constitution of Kenya[10] as a fundamental human right, these intellectual property rights cannot override or supersede the fundamental human right to health[11] and in particular, the right of access to essential medicines as provided by section 43 of the Constitution of the Republic of Kenya. In fact, section 40 (3) provides a qualifying factor to the support, promotion and protection of intellectual property rights. It states that the state shall not deprive any person of any property of any description, or of any interest in, or right over property of any description, unless the deprivation is for a public purpose or in the public interest and is carried out in accordance with the Constitution and any Act of Parliament[12]that requires prompt payment in full, of just compensation to the person and allows such person who has an interest in or right over that property a right of access to a court of law.

There are those who, on one hand champion, the idea that only under extraordinary circumstances should compulsory licensing be granted upon patented pharmaceutical products; otherwise detrimental effects on global health as well as on the global economy will transpire.[13] There are those, on the other hand who claim that the right to health is more important than those of the patent holder. Given that both the right to health and intellectual property rights are fundamental human rights safeguarded in the constitution, the problem thus arises as to which right has primacy over the other and whether there is a need to strike a balance between the two competing interests.

1.3 Research Questions

The following research questions guided the proposal:

1)Does compulsory licensing under the Industrial Property Act Number 3 of 2001 promote the right to health as provided for under the Constitution of Kenya?

What is the justification if any, for compulsory licensing
What is the legal impact of compulsory licensing in India as compared to Kenya
To what extent has the national legislation achieved a balance between the right to access to essential medicines on one hand and the right to protection of intellectual property rights on the other

1.4 Basic Theory behind the research

It is argued on one extreme that ‘patent protection should end where saving lives or alleviating suffering begins; that is, patent law should be subordinate to certain social interests.’[14] At the opposite end of the spectrum, it is argued that pharmaceuticals should be treated like all other commodities, thus the price should be determined by the basic principles of supply and demand and thus promote innovation.[15] There are various justifications for protection of intellectual property rights. However, two main justifications are discussed; the utilitarian theory and the dignitarian theory.

1.4.1 Utilitarian Theory:

This is referred to by Michael Spence as a community centred justification.[16] It endorses the creation of intellectual property rights as an appropriate means to foster innovation.[17] The utilitarian theory, as propounded by Jeremy Bentham and Stewart Mill, basically emphasizes that it is important to have intellectual property rights in order to encourage the production, dissemination and exploitation of various intellectual information. A pharmaceutical company may be unwilling to invest the vast sums necessary to develop, test and obtain regulatory approval for a drug that it knows can be cheaply reproduced by its competitors.[18] In order to sustain an industry in which the fruits of research are so expensive to obtain and so comparatively cheap to imitate, some type of intervention in the normal operation of the market is needed and a patent regime is an important form of that intervention.[19] However, there has been a reconsideration and reconceptualization of this theory granting protection to patent holders particularly in the international arena. Using the same term ‘Utilitarianism’, governments have come up and issued compulsory licenses so as to promote better health for citizens of the world and thus protect this fundamental human right. Social welfare has often overridden the rights of individual patent holders. It is because of this that some scholars[20] call for more stringent laws to avoid ambiguous issuing of compulsory licenses. Furthermore, they state that compulsory licensing should not be encouraged as pharmaceutical companies will not be able to recover their costs for research and development projects.

1.4.2 Dignitarian Theory:

Intellectual property rights are also justified on the dignitarian theory. This theory states that intellectual property rights should be protected as they reflect and affect the personhood of the intellectual property rights holder. Scholars such as John Locke[21] and Robert Norzick claim that every man has property in his own person.[22]It explains that the labour of man and the work of his hands are his and nobody else’s. This may also be called the labour theory. If pharmaceutical companies lose their exclusive right to control their products, they will essentially be robbed of the fruits of their labour.[23] While there are strong theories supporting why medicines ought to be given patent protection, the controversy arises due to the grave health problems currently been felt globally. This apparent fact enhances the argument that patents should be suspended when they come into conflict with serious health issues.[24]

According to Immanuel Kant[25] and Hegel, there is a natural obligation to respect the rights of the intellectual property right holder. They advocated for the personhood justification for protection of intellectual property rights. They claimed that for one to achieve proper development – to be a person- an individual needs some control over resources in the external environment and the necessary assurances of control take the form of property rights.[26]

1.7 Definition of Operational Key terms

Intellectual Property Rights– these are exclusive rights given to the holder of the intellectual property.
IPR– Intellectual Property Rights.
TRIPS– Trade Related Aspects of Intellectual Property Rights.
Doha Declaration– Declaration signed in DohaQatar on Public Health standards and TRIPS.
Compulsory Licensing– One of the Flexibilities accorded under TRIPS whereby a government can license to a company, government agency or other party the right to use a patent without the consent of the patent holder.
Voluntary Licensing– An intellectual property right holder may opt to voluntarily give up his exclusive right to another or to the government usually for the betterment of society.
Patent and patent duration– Patent is an intellectual property right that enables the right holder to prevent others from making, using, selling or importing the invention for the duration of the patent right; usually 20 years.
IPA– Industrial Property Act of Kenya.
ARVs– Antiretroviral drugs given to patients with HIV/AIDS.
ICESCR– The International Covenant on Economic, Social and Cultural Rights
UDHR– The Universal Declaration of Human Rights of 1948
KIPI– Kenya Industrial Property Institute
WTO– World Trade Organization
WHO– World Health Organization

1.8 Methodology

Following the Doha Declaration, high, middle and low income nations have all issued health related compulsory licenses.[27] I intend to carry out a comparative case study of Kenya and India to see how each country has managed to adopt compulsory licensing into its laws and how this in turn has affected the country’s right to health and particularly access to essential medicines by each country’s population.

I chose to do a comparative case study of India as it is one of the examples of countries that have incorporated compulsory licensing of pharmaceutical drug patents which has proved to be an effective tool in promoting the right to health in India.[28] Moreover, this impact can best be seen from their Indian Patent Act of 1970 that was amended and thus became TRIPS compliant in 2005. The Indian Patent Act is also unique in that it provides for pre-grant and post-grant of compulsory license opposition procedures. This, as shall be seen later in the dissertation, is a mechanism to deal with the pressure from Europe and United States of America to uphold protection of intellectual property rights at all costs; a problem that countries such as Thailand (who have liberally and frequently granted compulsory licenses) continue to experience. Thus, through the comparative study, I’ll be able to highlight what Kenya’s national legislation (particularly on intellectual property rights and the human right to health) can borrow so as to promote the fundamental right to health by increasing access to essential medicines in Kenya.

I have also critically examined some decisions of the courts in India[29] which are of a persuasive nature, in discussing compulsory licensing of pharmaceutical patents in order to promote the right to health. These cases demonstrate the instances when India has issued compulsory licenses of pharmaceutical drugs, or when the court have entertained and upheld applications for opposition to these compulsory licenses and the procedures they have used to either issue the compulsory licenses or reject them.

1.9 Literature review

The Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement is one of the fundamental sources of literature for this proposal. The TRIPS agreement is an international instrument that provides for protection of intellectual property rights. However, the TRIPS Agreement does not adequately reflect the fundamental nature of human rights particularly the right to health. It tilts the balance away from public interests and in favour of intellectual property rights. Moreover, the TRIPS Agreement fails to give a definite and conclusive definition of ‘compulsory licensing’ and as such, one is left to fill in this gap from other sources.

Another important source of literature for this proposal is the Doha Declaration. Paragraphs 17 to 19 of this instrument emphasize the importance of interpreting the TRIPS Agreement in a way that supports and encourages public health especially through the availability of access to essential medicines. It expounds on the flexibilities accorded under the TRIPS Agreement and more so on compulsory licensing. It however remains a declaration and hence lacks the force of a legally binding international document.

Some of the books and articles I reviewed while writing this proposal include; ‘Willingness and ability to use TRIPS Flexibilities: Kenya Case Study.’[30] This article acknowledges the fact that there are great challenges in the delivery of essential medicines as a result of the international property rights regime. It goes on further to give statistical data of how this regime has affected the right to health of many Kenyans. It also explains how the Industrial Property Act, 2001 was brought into compliance with the TRIPS agreement. It especially expounds and gives the general application of the provisions concerned with compulsory licensing. Nonetheless, it fails to critically examine which of the laws provide for greater protection of intellectual property rights and dwells mostly on the misconception of ARVs as being the only or most important essential medicine.

Having extensively perused Jackline Nyaga’s, ‘Implementing Parallel Importation and Licensing Mechanisms to increase access to medicines in Kenya,’[31]I observed that the authoress focuses mainly on Kenya’s experience so far in implementing the flexibilities of parallel importation and compulsory licensing and to a large extent fails to look at it critically from a legal perspective and as such lacks case law (possibly due to lack of development in this area) and other essential legal persuasions for the use of compulsory licenses for pharmaceutical patents.

Collen Chien also attempts to analyze the compulsory licensing of patents relating to essential medicines.[32]In her article, she explicates that through the empirical analysis that she and others have carried out; she is lead to a strong conclusion that there is no decline in innovation in pharmaceutical companies as a result of issuance of compulsory licensing of patented pharmaceuticals. While she presents persuasive and logical evidence in support of the above, she fails to uphold her arguments through cogent legal authorities such as case laws and other legislations and concentrates subjectively on the compulsory licensing of AIDs drugs as an essential medicine.

Kevin Kelly’s article[33] was helpful in giving statistical data on access to essential medicines by a certain demographic (HIV/AIDS infected mothers), but it ignores to answer the important question as to whether or not compulsory licensing of patents of essential drugs was a contributory factor to the data.

Whereas Jamie Feldman[34]aptly analyses compulsory licensing and even gives examples of countries where this flexibility has successfully been used, he looks at compulsory licensing wholly from the point of view of the holder of intellectual property rights and dismisses the perspective from the protection of the fundamental human right to health. He does not give an in depth nor profound justification for compulsory licensing of pharmaceutical licenses.

While Marks’ article[35] was vital in analysing the connection between the human right to health and the right to protection of intellectual property rights, it is general in its approach and thus lacks the critical analysis of national laws.

The ‘Implications of the Doha Declaration on the TRIPs Agreement and Public Health’[36] was integral in highlighting the major paragraphs of the Doha Declaration that affects the TRIPS Agreement and how each can be read together in order to give a wholesome interpretation of the TRIPS Agreement. It however does not delve critically into the debate about compulsory licensing and how it can be used as a mechanism by states to promote the right to health by increasing access to essential medicines.

Michael Spence’, Intellectual Property[37] helped me form the basic theories behind my research for my proposal. However, it had a dearth of deliberations on compulsory licensing and how it affects the intellectual property law theories.

Finally, I reviewed Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’.[38] This thesis was one of the materials I used when coming up with my comparative case study of India’s compulsory licensing under its Patent Act. It nonetheless, neglects to give a conclusive impact of compulsory licensing in India and ignored to give case laws to buoy its assertion that compulsory licenses should be issued as an effective tool in promoting access to drugs in India. Furthermore, it is not all rounded as it alludes to the fact that the only essential medicines are ARVs.

1.10 Framework of the Thesis.

This dissertation shall have four main chapters. Each chapter’s breakdown is summarised as follows;

Chapter one highlights the background to the notion of the fundamental human right to health as well as compulsory licensing under national and international law. It also introduces the reader to the concept of intellectual property rights and the justification for them, particularly patent protection. It proposes to the reader the need to bring a balance between the two warring interests and finally discusses the literature reviewed in coming up with the proposal.

Chapter two deliberates on the justification for the notion of compulsory licensing of pharmaceutical patents. It commences by discussing the major paragraphs in the Doha Declaration that affirms that compulsory licensing should be granted so as to preserve public health. It then continues to discuss the main justification for compulsory licensing, that is, to promote the fundamental right to health. It concludes by encouraging the reconciliation and balancing of both interests (the interests of the patent holder and the interests of society).

Chapter three contains a comparative analysis of the legal impact of compulsory licensing on access to essential drugs in Kenya vis-a-vis India. It begins with a brief historical perspective of India’s Patent regime and then offers an analysis of India’s Patent Act which provides for compulsory licensing. It then moves on to discuss the Kenyan situation under the Industrial Property Act Number 3 of 2001. Finally, it showcases the major similarities and differences between the two jurisdictions.

A detailed explanation and analysis as to the extent to which our national legislation has achieved a balance between the right to access to essential medicines on one hand and the right to protection of intellectual property rights on the other is discussed in chapter four. It concludes by offering recommendations as to how this delicate balance can be achieved in Kenya.

CHAPTER TWO
THE JUSTIFICATION FOR COMPULSORY LICENSING

2.1 Introduction

This chapter deliberates on the justification for the notion of compulsory licensing of pharmaceutical patents. It commences by discussing the major paragraphs in the Doha Declaration that affirms that compulsory licensing should be granted so as to preserve public health. Through this it explains why the preservation of public health is a justifiable reason for the granting of compulsory licenses for pharmaceutical patents; a clarification which the TRIPS Agreement deliberately fails to provide for and leaves this for the determination of member states.

It concludes by encouraging the reconciliation and balancing of both interests (the interests of the patent holder and the interests of society).

2.2 The Doha Declaration

Having looked at the legal basis for compulsory licensing, this chapter now attempts to delve into the legal justifications for it, especially as a means to promoting the right to health. The starting point shall be the Doha Declaration.[39]

The Doha Declaration was adopted by various countries as a demonstration of their concern for public health. This was especially so for developing countries such as Kenya. They fundamentally were seeking a declaration that recognized their right to implement certain pro-competitive measures, such as compulsory licensing as needed to enhance access to essential medicines.[40]As much as the declaration lacks the binding thrust that an international convention would have, it is still a substantive source of law justifying compulsory licensing.[41] This is because as per the Vienna Convention on the Law of Treaties Article 26, international agreements, including those which are not of a binding character are entered into ‘pacta sunt servanda’ meaning, in good faith and this applies to the Doha Declaration.[42] Paragraph 4 of the Doha Declaration, affirms the right of Member States to implement compulsory licensing by providing;

We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all. In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

Further analysis of the Doha Declaration sub-paragraph 5 (b),[43] states that article 31 of the TRIPS agreement does give a number of conditions for granting compulsory licensing but does not in any way limit the grounds on which such licenses can be granted.[44] Sub-paragraph 5 (c) provides for member states to determine what constitutes a national emergency or other circumstance of extreme urgency which is relevant for the granting of compulsory licences when provided for under national laws and pursuant to TRIPS article 31 (b), without the obligation for prior negotiation with the patent owner.[45] The confirmation that the TRIPS Agreement has left room for flexibility at the national level has important legal implications in that panels, tribunals and the appellate bodies must interpret the Agreement and the laws and regulations adopted to implement it in light of the public health needs of individual member states.[46]

It has been suggested[47] that article 7 and 8 of the TRIPS Agreement does also highlight one of the main objectives of the agreement which is the exploitation of intellectual property to the mutual advantage of producers as well as users in a manner that is conducive to social and economic welfare and to a balance of rights and obligations. Moreover, that in amending the laws and regulations regarding intellectual property rights, measures necessary to the protection of public health and nutrition be adopted. However, this was interpreted by the WTO dispute settlement panel, in the Canada-Patent protection of pharmaceutical products case,[48] that the goals and limitations stated in Articles 7 and 8 as well as those of other provisions of the TRIP agreement must be borne in mind and that they are not the only provisions establishing the agreement’s objectives. Thus, the main objective is the protection of intellectual property rights.

It is thus evident that the Doha Declaration, when read in tandem with the TRIPS agreement supports and encourages the use of compulsory licensing for pharmaceutical patents.[49] The only potential obstacle lies in Article 31(f) of the TRIPS agreement that provides that compulsory licensing shall be authorized predominantly for the supply of the domestic market of the member authorizing such use. This limitation may create a problem where Kenya or any developing country can no longer manufacture drugs or medicines or has no capacity to do so both for the domestic market and international market and therefore relies on importation of compulsory licensed drugs from another country. However, Kenya has thus far not experienced such a situation.

2.2 The Human rights ‘paradox’.

It must be fathomed from the beginning that both the individual rights to intellectual property protection as well as the fundamental right to health care are provided for under international conventions and indeed our very own constitution. In this same vein, it would thus lead one to deduce that no right is superior to the other and indeed both work concurrently to ensure that the general welfare of the public is protected and indeed promoted. From the foregoing, there would appear to be a human rights ‘paradox’. However, as earlier mentioned, human rights ought to complement each other as oppose to compete with each other. Having fully underscored and understood this concept, one can thus easily identify why compulsory licensing of pharmaceutical patents should be encouraged so as to promote access to essential drugs and as a result promote the right to health.

2.2.1 The human right to intellectual property protection

The right to intellectual property protection has been acknowledged and indeed recognized by both national and international legal regimes over the years. Nationally, before the enactment of the Industrial Property Act of 2001, Kenya had adopted an Act of Parliament from the English colonial government.[50] It recognized intellectual property rights such as trademarks, copyrights and indeed patents to name a few. Internationally, article 27 of the Universal Declaration of Human Rights (UDHR), 1948 provides for the right of everyone to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is writer.Since the UDHR is of non-binding nature (except for some provisions that have attained international customary law status), the same provisions were subsequently incorporated in article 15 of the International Covenant on Economic Social and Cultural Rights (ICESCR) in 1966. It states;

The States Parties to the present Covenant recognize the right of everyone to take part in cultural life; to enjoy the benefits of scientific progress and its applications and to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.[51]

Article 15(3) goes on further to provide that the State Parties to the Covenant shall undertake to respect the freedom indispensable for scientific and creative activity. There is thus cause for inquiry as to whether compulsory licensing of patents in fact violates this human right of protection of intellectual property rights; in this case, pharmaceutical patents.

There has been much debate as to whether intellectual property rights can be termed as human rights.[52] However, such debate is better left for another forum. For now, what concerns us, is the fact that since it has been incorporated in the major international covenants guaranteeing human right protection,[53]it is thus accepted legally as a human right whose violation does indeed give right to legal recourse such as judicial remedies.

In addition to the aforementioned, it is argued that there are some countries that have a science-based pharmaceutical industry and indeed the pharmaceutical industry does aid in the employment of the country’s chemists, physiologists, toxicologists, pharmacologists, pharmacists, doctors and the like.[54]This pharmaceutical industry could be a significant contributor to the national economy of that country. Also, a home-based industry might be ina better position to produce medication compatible with the average local income,because the cost of labor would be commensurate with the average income.[55] Additionally, maintaining a domestic industry in the area of medication production is important for reasons of national defense.[56]

2.2.2 The human right to health.

Perhaps the most obvious threat to human rights has come from the inability of people to achieve access to expensive medicine…’[57]

The human right to health, as explained earlier includes the financial access to essential medicines by the majority of the population that needs them. ‘Essential medicines’, according to the World Health Organization (WHO), are those that ‘satisfy the priority health care needs of the population and are intended to be available within the context of functioning health systems at all times in adequate amounts, in the appropriate dosage forms, with assured quality, and at a price the individual and the community can afford.’[58] The United Nations Development Group defines ‘access’ in this context as ‘having medicines continuously available and affordable at public or private health facilities or medicine outlets that are within one hour’s walk from the homes of the population.’[59]

The Constitution of the Republic of Kenya provides for the right to health care. According to Chaskalson P. in Soobramoney v Minister of Health (Kwazulu-Natal),[60] the purposive approach to constitutional interpretation will often be one which calls for a generous interpretation to be given to a right to ensure that individuals secure the full protection of the bill of rights but this is not always the context and may indicate that in order to give effect to the purpose of a particular provision, a narrower or specific meaning should be given to it.

Furthermore, access to essential medicines can be affirmed as a human right on the basis, not only of the right to health but also on two other rights set out in the ICESCR, namely, the rights to the protection of the moral and material interests resulting from any scientific, literary or artistic production[61] and to share in its scientific advancement and its benefits.[62] When contrasted, the former seems to protect the ‘right’ of pharmaceutical companies to earn a profit from the drugs they develop, by setting prices that render medicines inaccessible to the destitute sick, while the latter seems to protect the ‘right’ of those destitute sick to benefit from the development of new drugs.[63] The way out of this dilemma is to distinguish intellectual property rights from human rights and consider them a temporary monopoly established for the valid social purpose of encouraging scientific invention and artistic creation. In other words, an IPR is a legally protected interest of a lower order than a human right, which implies a superior moral and legal claim.

Moreover, the danger in giving greater protection to intellectual property right holders is that such monopoly control can be given higher priority than ensuring the progressive realization of human rights such as the right to health. This can be seen by the fact that patent protection increases the likelihood that prices for a patented product will be higher and indeed price is an important determinant to access to essential medicines.[64] Thus whenever patents allow companies to price any drug out of the reach of those who need it, public health suffers. It is for this reason that the government steps in to ensure that the right to health is achieved by all and thus grants a compulsory license to pharmaceutical patent holder so that the price inevitably depreciates, thus increasing access to essential medicines and thus promoting the right to health.

2.2.3 The need to reconcile both interests

After the expiration of the term of protection, protected works and inventions fall into the public domain and anyone is free to use them without prior authorization by the right holder.[65] Once in the public domain, the intellectual property rights holder is deemed to have paid his societal dues. However, this term of protection, 20 years for patents, is too longer a time for society to wait while it loses its battle to diseases which could have easily been treated had it had access to essential medicines.[66]

The Committee on Economic, Social and Cultural rights came up with a ‘Statement on Human Rights and Intellectual property’ in which it considered that intellectual property rights must be balanced with the right to enjoy the benefits of scientific research, progress as well as its applications.[67]The Committee concluded by calling for a mechanism for a human rights review of intellectual property systems.[68] It also made a further clarification to General Comment No. 14 and thus to Article 12 of the ICESCR, by providing that the human right to essential medicines includes the creation of conditions[69] which would assure to all medical services and attention in the event of sickness. As part of their obligation to protect, states parties havea duty to control the marketing of medical equipment and medicines bythird parties,[70] which strongly suggests that the states should intervenewhere marketing of drugs by pharmaceutical companies is detrimental tothe right to health.[71]Nevertheless, it was in General Comment No. 17, adopted in 2006, that the Committeechallenged head-on the assumption of the international trade regimethat the rights of companies holding patents over essential drugs wereof the same order as the rights of those who need the drugs, by treating theformer as a temporary, revocable monopoly, and the latter as human rights which of course were timeless expressions of fundamental entitlements of a human being.[72]Indeed, the Committee affirmed,

In contrast with human rights, intellectual property rights are generally ofa temporary nature, and can be revoked, licensed or assigned to someoneelse.

The Committee further confirmed that States should ensure that their intellectual property regimes constitute no impediment of their ability to comply with their core obligations in relation to the right to health.[73]The right to health, in theinterpretation of the Committee on Economic Social and Cultural Rights,means that States Parties have a duty to prevent unreasonably highcosts for access to essential medicines.[74]

2.3 Conclusion

In conclusion, it is evident that a delicate balance needs to be drawn between the human right to health through access to affordable essential medicines and the right to protection of Intellectual property rights. If we truly wish to factor the promotion and protection of human right to health into the objectives of intellectual property right protection, different ways and strategies of promoting and protecting scientific progress and its results should be explored in particular cases. In the context of human rights and particularly the right to have an access to essential drugs, compulsory licensing is therefore a very crucial element as such licenses may constitute an important tool to ensure affordable drugs through competition without denying the patent owner compensation for his invention thereby promoting the realisation of the right to health.[75]

CHAPTER THREE
THE LEGAL IMPACT OF COMPULSORY LICENSING IN INDIA AS COMPARED TO KENYA

3.1 Introduction

This chapter attempts to elucidate the legal impact of compulsory licensing in India as compared to Kenya. It does this through exploration of the current system of compulsory licensing in India under the Indian Patent Act[76] and a comparison with the Kenyan Industrial Property Act (2001) provisions on the same. It commences by giving a brief historical background and rationale for the current compulsory licensing system in India which as shall be seen, before 2005, provided issuance of compulsory licenses without much procedural and legal technicalities. This in turn led to quite a number of compulsory licenses for pharmaceutical patents being awarded in India between 1970 and 2004. This made India one of the largest producers and manufacturers of generic drugs which in turn had a positive effect on its economy.

This chapter also gives the current grounds upon which compulsory licenses may be awarded and the procedure for such awards both in India and in Kenya. It further delves into examining some of the case laws that have helped develop compulsory licensing in India thus expounding the legal impact compulsory licensing has had in India and the future direction of the regime.

3.2 History and rationale of the Indian patent system.

In order to fully grasp the milestones India has gone through in trying to achieve the balance between the rights of its population to access to essential medicines, it is important to give a brief synopsis of its patent regime.

India’s first Patent Act[77]was instituted in 1856 and included patents for both process and product and lasted 14 years, with extensions allowed by the Governor General.[78] It was amended in 1859 so as to be in accordance with the British Patent Act of 1852 and underwent various other amendments until it was replaced by the 1911, Indian Patent and Design Act.[79] This Act established for the first time a system of patent administration under the management of the Controller of Patents. Furthermore, it provided for the grant of compulsory licensing mainly in the case of misuse or abuse of patent rights.

After independence, the government of India appointed two committees in order to restructure the patent regime, and to identify the resulting rise in the cost of medicines.[80] These committees were the Bakshi Tek Chand Committee[81] and the Ayyangar Committee.[82] They recommended that the patent law be so designed as to enable the country to achieve rapid industrialization to attain, as quickly as possible, a fairly advanced level of technology giving inventors and investors sufficient inducement and protection by patent grants and at the same time safeguarding its national economic and social interest.[83] The Bakshi Tek Chand Committee thus went beyond the 1911 Patent Act and recommended a provision enabling the government to request a compulsory license on behalf of private parties that seemed to suggest an inclusion on the ‘public interest’ ground which was incorporated in the 1952 Act, section 23CC[84] that provided for automatic endorsement of licenses of right in respect of inventions pertaining to food, medicines or drugs.[85]However, this amendment did not prove very effective as its provisions were fairly cumbersome when it came to their actual application.[86]Thus the Ayyangar committee was appointed. It established that due to the fact that 80-90 percent of India’s patents were held by foreigners and that these patents mostly dealt with food, chemicals and pharmaceuticals, many of the patented commodities such as medicines were arguably unaffordable to the general public and the drug-price index was rising rapidly.[87] It concluded that the patent regime was ‘wholly inadequate to prevent misuse or abuse of patent rights, particularly by foreigners.’[88]The suggestions of this committee went into amending the Act and forming the Patent Act of 1970.

This resulted in amendments to the Indian Patent Act in 1970 with such amendments including a further time limitation of a patent right from fourteen years to seven years, the curtailing of product patents on medicine and the establishment of automatic licensing.[89] With the passing of the 1970 IPA, it was clear that the policy of the Indian government was geared towards the protection of public health and the expansion of the Indian generic manufacturing industry.[90]

However, it must be noted that the Patent Act of 1970 provided only for process patent and not product patent.[91] The Act also had a strong compulsory license regime. It also prohibited patent protection on pharmaceuticals and introduced automatic licensing. As a result of this new patent regime, India became one of the cheapest drug producing countries after 1970.[92]

In 1995, India joined the World Trade Organization (WTO) and automatically became a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[93]India was thus forced to become fully TRIPS compliant by its last amendment to the 1970 Act in 2005.[94]

3.3 Compulsory Licensing under the Indian Patent Act of 2005.

Chapter XVI of the Indian Patents Act deals with compulsory licenses. Section 84 of the Indian Patent Act provides for compulsory licensing in the domestic arena while section 92A looks at exporting of drugs.[95] Section 84 provides for a compulsory license to prevent the abuse of patent as a monopoly and to make way for commercial exploitation of invention by an interested person. Section 84 (1) provides

At any time after the expiration of three years[96] from the date of the grant of a patent, any person interested may make an application to the Controller for a grant of compulsory licence on patent on any of the following grounds, namely:—

(a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or

(b)that the patented invention is not available to the public at a reasonably affordable price, or

(c) that the patented invention is not worked in the territory of India.

The use of the terms ‘reasonable requirements of the public’ and ‘reasonable affordable price’ are ambiguous in my opinion. This is because the determination of what might amount to a reasonable requirement or a reasonable affordable price changes from one person to the next based on the social as well as financial caliber that that person inhabits. In my contemplation, this section should have highlighted the circumstances that make it reasonable for a compulsory license to be granted,[97] such as is the case in Section 80 of the Industrial Property Act of Kenya which underscores some of these circumstances to include cases of national security, nutrition, health and environmental conservation or the development of any other vital sector of Kenya’s national economy.

It must however be noted that in as much as the aforementioned section does not explicate what a ‘reasonable requirements of the public’ is, it does provide instances when a reasonable requirement of the public is not satisfied under section 84 (7). It provides;

The reasonable requirements of the public shall be deemed not to have been satisfied;

(a) if, by reason of the refusal of the patentee to grant a licence or licences on reasonable terms,

(i) an existing trade or industry or the development thereof or the establishment of any new trade or industry in India or the trade or industry in India or the trade or industry of any person or class of persons trading or manufacturing in India is prejudiced; or

(ii) the demand for the patented article has not been met to an adequate extent or on reasonable terms; or

(iii) a market for export of the patented article manufactured in India is not being supplied or developed; or

(iv) the establishment or development of commercial activities in India is prejudiced or

(b) if, by reason of conditions imposed by the patentee upon the grant of licences under the patent or upon the purchase, hire or use of the patented article or process, the manufacture, use or sale of materials not protected by the patent, or the establishment or development of any trade or industry in India, is prejudiced; or

(C) if the patentee imposes a condition upon the grant of licences under the patent to provide exclusive grant back, prevention to challenges to the validity of patent or coercive package licensing; or

(d) if the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent or is not being so worked to the fullest extent that is reasonably practicable; or

(e) if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by

(i) the patentee or persons claiming under him; or

(ii) persons directly or indirectly purchasing from him; or

(iii) other persons against whom the patentee is not taking or has not taken proceedings for infringement.

Section 84 (2) further states that an application under this section may be made by any person notwithstanding that he is already the holder of a licence under the patent and no person shall be estopped from alleging that the reasonable requirements of the public with respect to the patented invention are not satisfied or that the patented invention is not worked in the territory of India or that the patented invention is not available to the public at a reasonably affordable price by reason of any admission made by him, whether in such a licence or otherwise or by reason of his having accepted such a licence.

Section 89 further provides the general purposes of granting a compulsory license as:

(i) That the patented inventions are worked on a commercial scale in the territory of India without undue delay and to the fullest extent that is reasonably practicable.

(ii) That the interests of any person for the time being working or developing an invention in the territory of India under the protection of a patent are not unfairly prejudiced.

Section 84 (6) states that the Controller shall take into account the following factors when considering the application for a compulsory license:

(1) The nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patent or licensee to make full use of the invention.

(2) The ability of the applicant to work the invention to the public advantage.

(3) The capacity of the applicant to undertake the risk in providing capital and working the invention, if the application were granted.

(4) As to whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period as the Controller may deem fit.

Section 90 further empowers the controller to settle the terms and conditions for compulsory licenses.

Section 92 provides for a special provision for compulsory licenses on notifications by central government. It attempts to narrow down the instances in which the government may by way of notification Official Gazette, declare that compulsory licenses should be granted in respect of any patent. These include instances of national emergency, extreme urgency or public non-commercial use. Section 92 (1) (i) thus states that the Controller shall, on application made at any time after the notification by any person interested, grant to the applicant a licence under the patent on such terms and conditions as he thinks fit and that in settling the terms and conditions of a licence granted under this section, the Controller shall endeavor to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.[98]The Act also goes a step further by providing in section 92 (3) that such circumstances of national emergency and urgency include cases of public health crises relating to Acquired Immuno Deficiency Syndrome, human immune deficiency virus, tuberculosis, malaria or other epidemics and states that the Controller shall not apply any procedure specified in section 87 in relation to that application for grant of licence under this section provided that he shall, as soon as may be practicable,[99] inform the patentee of the patent relating to the application for such non-application of section 87.

It must also be appreciated that this Act does provide a definition for the term ‘pharmaceutical products’ to mean any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.[100]It must also be noted that the main difference between section 92 and section 84 is that under section 92 (1) discussed above, an applicant need not wait for a period of three years to lapse before making an application for grant of compulsory licensing.[101] Moreover, section 92 (3) states that the Controller has discretionary powers to decide whether or not to follow the cumbersome procedure under section 87 when faced with an application for grant of compulsory license under section 92.[102]

3.3.1 The unique case of compulsory licensing of mailbox application related patents.

In 1999, India added section 11A in its Patent Act pursuant to a TRIPS obligation, that provided that applications claiming pharmaceutical inventions would be accepted and put away in a mailbox to be examined in 2005.[103] These applications are referred to as ‘mailbox applications’.[104]Section 11A states that in cases of ‘mailbox applications’ that result in the grant of a patent, an automatic compulsory license would issue to the generic companies that made a ‘significant investment’ and were producing and marketing a drug covered by the ‘mailbox application’ prior to 2005. Such licence is however subject to the payment of reasonable royalty.[105] The Act does not provide a yardstick to determine the reasonableness of a royalty rate and there is no case law to set a precedent as to what could be deemed as reasonable. However, section 90 sheds some light when trying to compute the royalty rate payable by stating that one must take into account the nature of the invention, the expenditure incurred by the patentee in making the invention or in developing it and obtaining a patent and keeping it in force and other relevant factors.[106]

3.4 Limitations of the Indian Patent Act of 2005

The period after which one can apply for a compulsory license according to Section 84 of the Indian Patent Act is three years after the issuance of a patent on the drug. This three year period is not justified as most of the time essential medicines are required immediately by the population and this period provides a monopoly timeframe in which access to affordable essential medicines are limited and thus leads to an increase in loss of lives. In my opinion, this section fails to acknowledge the need to promote the right to health and indeed the right to life as fundamental human rights.

Moreover, the same section 84 requires the person applying for compulsory licensing to set out the nature of their interest and it provides an opportunity for the patent holder to oppose the application. Therefore, there are chances that any application filed for compulsory licensing can result in inordinate delays, thereby defeating the entire purpose of the provision.[107] Also, the controller has to take into account the nature of invention, time elapsed, his efforts for obtaining a license and the rate of royalty which may further complicate and delay the process. [108]

Section 92A also restricts the grant of compulsory licenses for purposes of manufacture and export to a country with insufficient or no manufacturing capacity and that the terms and conditions determining the grant of the compulsory license under Section 92A shall be as decided by the controller.[109]

However, as much as there are all these legal misgivings on the matter of compulsory licensing under the Indian Patent Act, it provides for a unique scenario by providing for pre-grant and post grant opposition provisions.[110]Under the Act, there are 11 grounds on which a patent can be opposed (post-grant),[111] but this can only be done within one year after the patent has already been granted.[112] India’s pre-grant opposition procedure is restricted on just two grounds. That is, non-compliance with patentability requirements and non-disclosure or wrongful disclosure of genetic resources or traditional knowledge.[113] The nevirapine syrup opposition case set an important precedent for all future ARV patent oppositions in India.[114] The Indian Network for People Living with HIV/AIDS (INP+) and the Positive Women’s Network (PWN) filed a pre-grant opposition for the patenting of nevirapine syrup, a pediatric drug used in the treatment of HIV positive children who are unable to swallow conventional ARV drugs. On June 11, 2008, the Indian Patent Office rejected the patent application of German pharmaceutical company Boehringer Ingelheim based on both technical and public health grounds. Specifically, the patent office found that the syrup formulation of nevirapine was merely a new form of a known drug that was first invented in 1989, well before the TRIPS/2005 IPA patent cut-off date of 1995.[115]

This decision affirmed the interpretation that India’s current patent law does not consider improvements or new forms of known medicines to be patentable.[116] More importantly, the ruling called into question the practice of ‘ever-greening,’ where pharmaceutical companies make minor variations to existing medicines in order to extend their patent monopolies for as long as possible.

3.5 Kenya’s Industrial Property Act Number 3 of 2001

One is first introduced to compulsory licensing under Section 72 (1) of the Act which states that;

At any time after four years from the filing date of an application or three years[117] from the grant of a patent, whichever period last expires, any person may apply to the Tribunal for a licence to exploit the patented invention on the grounds that a market for the patented invention is not being supplied on reasonable terms in Kenya

Section 72 goes on to state that a compulsory license shall not be granted if the owner of the patent satisfies the Tribunal that circumstances exist which justify the fact that the market for the patented invention is not being supplied, or is not being supplied on reasonable terms, in Kenya. Therefore, if for example it can be proven that a patented pharmaceutical drug is not being supplied in Kenya as it has been banned by the Kenya Bureau of Standards for a particular reason, no compulsory licence shall be granted for it. This is unlike the Indian Patent Act of 2005 that makes compulsory licensing wholly on the discretion of the Controller.[118]

Section 74 (1) further provides that a compulsory licence shall not be granted unless the person requesting the licence satisfies the Tribunal that he has asked the owner of the patent for a contractual licence but has been unable to obtain the licence on reasonable commercial terms and within a reasonable time; and offers guarantees satisfactory to the Tribunal to work the relevant invention sufficiently to remedy the deficiencies or to satisfy the requirements which gave rise to his request. This prerequisite shall be waived in the case of a national emergency or other circumstances of extreme urgency, provided the owner of the patent shall be so notified as soon as is reasonably practicable. Section 75 (1), also states that in considering a request for a compulsory licence, the Tribunal shall decide whether a compulsory licence may be granted and shall then, if it decides in favour of the grant taking into account any terms agreed by the parties, proceed to fix the terms which shall be deemed to constitute a valid contract between the parties and shall be governed by the provisions of contractual licences. In fixing the terms, the Tribunal shall ensure that the compulsory licence is limited in scope and duration for the purpose for which it was authorized; is limited predominantly for the supply of the domestic market; does not entitle the licensee to grant further licences without the consent of the owner of the patent; is non-exclusive and provides for the payment to the owner of the patent of remuneration which is equitable with due regard to all the circumstances of the case, including the economic value of the licence.

Furthermore, Section 77 (1) states that a compulsory licence may be cancelled by the Tribunal if the licensee fails to comply with the terms of the licence; or the conditions which justified the grant of the licence have ceased to exist and are unlikely to recur, provided that the legitimate interests of the licensee are adequately protected.

Section 80 (1) (a) of the aforementioned Act, provides that such exploitation may only be carried out on the basis of public interest, in particular, national security, nutrition, health, environmental conservation or the development of any other vital sector of the national economy so required. Section 80 (1) (b), further provides that the Managing Director of Kenya Industrial Property Institute (KIPI), can on application to the licensee, in the prescribed form and after consultation with the Institute and the owner of the patent, order that the protected invention shall be exploited by the Government Ministry, Department, agency or other person as the Minister may designate in the order, subject to the payment of adequate compensation[119] to the owner of the patent in accordance with this section.

3.6 Decided cases from India’s National Courts and Patent Tribunal.

The legal impact compulsory licensing has had in India can also be seen from its courts decisions. For instance the case of Neo-Pharma Industries (P) Ltd v Parke Davis & Co (Application under section 23CC of the Patent and Design Act of 1911; Order dated 23 November 1965, the applicant (Neo-Pharma) wanted a license of the patent (relating to the manufacture of Chloramphenicol and its esters) filed an application under section 23 CC of the Indian Patent and Design Act of 1911. The patentee opposed the application on various grounds, one of which was that the applicants did not have the necessary expertise to manufacture the said patented drug and the grant of compulsory license would therefore be contrary to public interest and public safety. Moreover, the grant of a compulsory license was unwarranted because the patentee’s existing licenses were adequately meeting the demands of the public and the grant of a compulsory license would only prejudice their working of the invention. Despite all these allegations, the Controller found it appropriate to give the applicant ‘a chance’ to work the invention, in public good and if the applicant failed to produce goods to the requisite standards then the market forces would ensure that they don’t not remain in business.[120]

Another case of interest is the Raptakos, Brett & Co (P) Ltd v Benger Laboratories Ltd (Application under section 23CC of the Indian Patents and Design Act (1911); Order dated 28th July 1959. The facts of this case are that the applicant, Raptakos, desiring to manufacture a Saccharated Iron Oxide (a chemical product useful in the treatment of iron deficiency anaemia) sought a license from the licensee without success. The patent related to ‘Improved Therapeutic Preparations of Iron’. The license was awarded to the respondent and the applicant under section 23 CC thus made an application for the grant of compulsory licensing of the said patent. The applicant argued that the grant of a compulsory license would be in public interest as iron deficiency anaemia was widely prevalent in India and the patented invention would become available to the public at an affordable price.[121]

The application was opposed on various grounds, some of which were that the applicant did not have the ability to work the patent and if the compulsory license were awarded, it would be detrimental to public health.[122] Moreover, it was submitted that even without the grant of a compulsory license, the price of the patented medicine had reduced considerably over time and was likely to reduce even further.[123]

It was held by the Controller that the applicant did in fact have sufficient skill and ability to work the patented invention.[124] Also, there was no need to refuse the grant of compulsory license on the grounds of ‘public health’ as the Drugs and Cosmetics Act would test the safety of the drug. Furthermore, he said that the anticipated reduction of the price of a drug was not a sufficient ground for rejecting an application for compulsory licensing and as such I was awarded.[125]

3.7 Conclusion

From the foregoing, it is evident that the controller is more inclined to give a compulsory license of a patented pharmaceutical so as to promote public health. It is apparent that there is a dearth of case law concerning the awarding or rejection of a compulsory license for a pharmaceutical patent in Kenya. Nonetheless, should a dispute arise, Kenyan courts should follow in the footsteps of the Indian tribunal and award compulsory licenses for pharmaceutical patents where the benefit to the public far outweighs the cost to the patent holder.

CHAPTER FOUR

THE EXTENT TO WHICH NATIONAL LEGISLATION HAS ACHIEVED A BALANCE BETWEEN THE RIGHT TO ACCESS TO ESSENTIAL MEDICINES AND THE RIGHT TO PROTECTION OF INTELLECTUAL PROPERTY RIGHTS.

4.1 Introduction.

This chapter attempts to advance an analysis as to the extent to which our national legislation has achieved a balance between the right to access to essential medicines on one hand and the right to protection of intellectual property rights on the other. It commences by looking at the Constitution[126] that offers both rights in its content and then looks at the Industrial Property Act (2001) and how this Act has attempted to achieve this balancing act. It then concludes by offering recommendations as to how this equilibrium can be realized.

4.2 The Constitution and its efforts towards achieving equilibrium of rights.

The Constitution of the Republic of Kenya, in its Bill of Rights Chapter four part two provides for both the right to intellectual property protection as well as the right to health. It is modelled upon the Universal Declaration of Human Rights[127] as well as the International Covenant on Economic, Social and Cultural Rights[128] that provide for the same.

In my opinion, the fact that our Constitution provides for the right to intellectual property protection[129] as well as the right to the highest attainable standard of health[130] in the bill of rights proves that our laws try to cast a balance between both rights. The constitution, being the supreme law of Kenya, recognizes that both rights should exist without categorization of either being subordinate to the other. However, to say that both rights exist in harmony with each other would be naive and utopian. The reality is that both rights are in competition with each other for primacy.

Section 40 (5) says that the State shall support, promote and protect the intellectual property rights of the people of Kenya. The state already offers these services through monitoring agencies such as Kenya Bureau of Standards[131], Kenya Pharmacy and Poisons Board,[132]as well as Kenya Industrial Property Institute (KIPI). In my opinion, the existence alone of such statutorily regulated bodies shows the government’s intention in ensuring that intellectual property rights are upheld.

Furthermore, the same constitution provides that the rights of the intellectual property right holder shall not be deprived arbitrarily nor limited in any way on the basis of discrimination.[133]This reaffirms the government’s duty in safeguarding the rights of the intellectual property right holder. However, should this right be deprived as in the case of public health, the intellectual property rights holder must be compensated by prompt and full payment.[134]

Should one’s rights to intellectual property protection be violated, they have a right to take their matter to court, the Constitutional court and where dissatisfied, they may approach the Supreme Court. This right to recourse to court is provided for in Section 40 (3) (b) (ii).

4.3 The Industrial Property Act No. 3 of 2001 and its challenge in balancing competing interests.

This Act has the main mandate of ensuring there is protection of intellectual property rights such as patents. It ensures this through various ways such as section 60 that protects the patent holder from anybody else who may want to make, use, sell or import the patented drug. This protection is however not indefinite but lasts up to 20 years. Ordinarily, this would be justifiable[135] but in the case of a patented drug that is needed by the population, 20 years may not be reasonable and as such the Act acknowledges this through the provision of compulsory licensing.

As section 80 (1) (a) so appropriately provides, compulsory licensing may be awarded on certain grounds one of which is public health. Therefore, compulsory licenses may not be issued on a whim and this in fact does also offer some kind of protection to the patent holder. In addition to this, the Managing Director of Kenya Industrial Property Institute (KIPI), can on application to the licensee, in the prescribed form and after consultation with the Institute and the owner of the patent, order that the protected invention shall be exploited subject to the payment of adequate compensation[136] to the owner of the patent in accordance with this section. Once again, the Act tries to achieve a balance of rights in the sense that first, the Managing Director can reject the application for compulsory licence if he is not satisfied that it is for public health or that the person seeking the grant of the compulsory license did not ask the patent owner for a contractual license or that he was able to obtain it on reasonable commercial terms and within a reasonable time. Second, even before he orders the grant of the compulsory license, he must have had prior consultation with the patent owner and adequate compensation be made to him.[137]Third, the grant of a compulsory license will be taken to be like a contractual agreement so that where any of the terms are breached by the one granted the compulsory license for a pharmaceutical patent it may be withdrawn by the Managing Director of KIPI once it is brought to his attention.[138] Fourth, the grant of the compulsory license is limited in terms of scope as well as duration for the purpose for which it was authorized. Therefore, once the health of the population begins to improve and there is not much demand or need for the essential medicine then the compulsory license may be withdrawn and the patent holder reclaim his patent for the remainder of the duration left of the 20 year protection period. Fifth, the compulsory license is only awarded for the supply in the domestic market. Should the person granted the license export the drug, then he will be in breach of the terms and the license may be revoked.[139]

4.4 Possible Recommendations

Possible recommendations in the international arena include the formation of a convention or treaty that acknowledges the suffering that the people in the developing world endure due to access to affordable essential medicines; and persuaded by such, formally recognize the right to use compulsory licensing in the case of public health. Once acceded or ratified, it would have a binding force and countries from the west would not be able to legitimately criticize developing countries for issuing compulsory licenses in such matters.

Nationally, I would suggest that parliament implement legislation that allows a price regulation scheme of essential drugs such as the ARVs or consider allocating more from the budget towards subsidizing the price of these drugs. Moreover, when it comes to patent protection, parliament should consider reducing the patent duration from 20 years to 10 years only for pharmaceutical patents of essential drugs (so as not to make it non-compliable with the TRIPS Agreement). For all other inventions the patent holder would be protected for 20 years. At the very least this is a debate that should be started at the international arena with a possible amendment to Article 31 of the TRIPS Agreement.

The final article of the Montreal Statementsuggests, as examples, ‘international commitments to funding health research as a global public good, and schemes that reward innovation based on health outcomes.’[140] For instance, there could be a second kind of pharmaceutical patent that entitles an inventor not to monopoly pricing powers, but rather to rewards proportioned to the invention’s actual health impact over time. Such rewards, funded by a consortium of willing governments, would incentivize pharmaceutical companies to develop, first and foremost, the most cost-effective remedies for the world’s diseases.[141]

In addition, this reform would reorient the incentives of such firms in highly desirable ways: any inventor firm would have incentives to sell its innovative medicines cheaply, often even below their marginal cost of production, in order to help even very poor people who need them.[142]

4.5 Conclusion

When people’s lives are on the line, the practice of granting compulsory licenses for pharmaceutical drugs so that these people have access to the medicines they need seems to be common sense and ethical. The main aim of granting a compulsory license for pharmaceutical patents is not to punish the patent holder but to improve global health but this goal will not be achieved until more stringent laws govern this practice.[143]Moreover, Jamie Feldman[144] postulates that if only essential compulsory licenses were issued, citizens who were truly in need would be treated and the pharmaceutical companies’ fears of not recouping their investment would be placed at ease.[145]

In my humble opinion, the balance of these two rights is very difficult to achieve and the endeavour to achieve a balance may remain a Utopian endeavour!

Reference

[1] Constitution of the Republic of Kenya (2010) , Section 43 (1) (a)

[2] This is further affirmed by the Universal Declaration of Human Rights (1948) Article 25 (1) that states everyone has the right to a standard of living adequate for the health of himself and of his family, including food, clothing, housing and medical care and necessary social services.

[3]In exchange for this exclusive right, the patent holder pays his dues to society by disclosing the technical information behind how the invention was created, and at the end of the 20-year period the protection expires and the creation enters the public domain. (World Trade Organization, Understanding the WTO: The Agreements (2007), http://www.wto.org ) [27th May, 2010.]

[4] Article 33 of the TRIPS Agreement also provides for this.

[5] This multilateral treaty came into being in 1995 and its main aim was to ensure a comprehensive homogenous set of principles for the protection of Intellectual Property Rights. It established a set of minimum standards for all countries in relation to patents, copyrights, trademarks, geographical indications, topographies of integrated circuits among others. Kenya became compliant in 2001 with our Copyright Act and the Industrial Property Act.

[6] TRIPS Agreement Article 31 (h)

[7] TRIPS Agreement Article 31 (f)

[8] Constitution of the Republic of Kenya (2010)

[9] This section states that the State shall not discriminate directly or indirectly against any person on any ground, including race, sex, pregnancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth.

[10] Constitution of the Republic of Kenya (2010).

[11] Treatment Action Campaign (TAC) v Minister of Health 2002 10 BCLR 1033

[12] In this case the Industrial Property Act Number 3 of 2001

[13] Jamie Feldman ‘Compulsory Licenses: The Dangers behind the Current Practice.’ The Journal of International Business and Law 137 (2009).

[14] Amir H. Khoury, The “Public Health” of the Conventional International Patent Regime & the Ethics of “Ethicals:” Access to Patented Medicines, 26 CARDOZO ARTS & ENT. L.J. 25, 32 (2008).

[15] Peter S Menell, Intellectual Property: General Theories. (1999) page 133.

[16]Michael Spence, Intellectual Property (Oxford University Press) 2007 page 63.

[17] Peter S Menell, Intellectual Property: General Theories. (1999) page 133.

[18] D. Schwartzmann, Innovation in the Pharmaceutical Industry ( JohnsHopkinsUniversity Press) 1976

[19] Ibid

[20] Such as Jamie Feldman ‘Compulsory Licenses: The Dangers behind the Current Practice.’ The Journal of International Business and Law at 157 (2009). See also, Amir Attaran, ‘How Do Patents and Economic Policies Affect Access To Essential Medicines In Developing Countries?’ 23(3) Health Affairs (2004), 155–156, at 157 who expresses doubt that compulsory licensing can be made practicable.

[21] Simmons, A. John ‘The Lockean Theory of Rights’ Princeton, PrincetonUniversity Press (1992)

[22] Garima Gupta and Avih Rastogi ‘Intellectual Property Rights: Theory & Indian Practice’ Centre for Civil Society (2002) at 4.

[23] Ibid

[24] Ibid

[25] Kant, Immanuel (1798), ‘Of the Injustice of Counterfeiting Books’, Essays and Treatises on Moral, Political and Various Philosophical Subjects at 229-230.

[26] Peter S Menell, Intellectual Property: General Theories. (1999) 158

[27]Jamie Feldman ‘Compulsory Licenses: The Dangers behind the Current Practice.’ The Journal of International Business and Law 149 (2009).

[28] Dipika Jain, ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at 2.

[29] It must be noted that there is not much case law that has been reported to develop this area of intellectual property law but these few cases sheds some light on what precedent our very own courts should follow where the grant of a compulsory license for a pharmaceutical license is challenged in our courts.

[30] Robert Lewis Lettington and Peter Munyi ‘Willingness and ability to use TRIPS Flexibilities: Kenya Case Study.’DFID Health Systems Resource Centre, September 2004.

[31] Jackline Nyaga’s, ‘Implementing Parallel Importation and Licensing Mechanisms to increase access to medicines in Kenya’ StanfordUniversity, 2009

[32] Collen Chien, ‘Cheap drugs at what price to innovation: does the compulsory licensing of pharmaceuticals hurt innovation?’ http://www.ssrn.com [23rd October, 2010.]

[33] Kevin J Kelly “Maternal Deaths Drop in Kenya” Daily Nation 15 April, 2010 pg 10.

[34] Jamie Feldman ‘Compulsory Licensing: The Dangers behind the current practice’. The Journal of International Business and Law (2009) 138- 167

[35] Stephen P. Marks ‘Access to essential medicines as a right to health’ Health a human rights perspective

[36] Carlos M. Correa, ‘Implications of the Doha Declaration on the TRIPs Agreement and Public Health.’ University of Buenos Aires, World Health Organization Publication (2002).

[37] Michael Spence’, Intellectual Property (OxfordUniversity Press) 2007.

[38] Dipika Jain ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009).

[39] WTO, Declaration on the TRIPs Agreement and Public Health (November 14, 2001) hereafter the ‘Doha Declaration’

[40] Carlos M. Correa, ‘Implications of the Doha Declaration on the TRIPs Agreement and Public Health.’ University of Buenos Aires, World Health Organization Publication (2002)

[41] In my opinion, should countries across the globe continue to grant compulsory licenses of pharmaceutical patents on the basis of the need to promote and protect public health as indicated in the Doha Declaration, it may attain the international status of customary international law in the next few years which would thus make it obligatory and binding.

[42] This provision is also supported Article 31 of The Vienna Convention on the Law of Treaties, 1969 that: ‘a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.’

[43] Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.

[44] Carlos M. Correa, ‘Implications of the Doha Declaration on the TRIPs Agreement and Public Health.’ University of Buenos Aires, World Health Organization Publication (2002) at 29.

[45] Ibid, at 30

[46] Ibid

[47] Ibid

[48] WT/DS114/R, 17 March 2000

[49] Paragraph 4

[50]Kenya Patent Registration Ordinance (1933). This later led to the enactment of the 1989 Industrial Property Act.

[51] Article 15 (1) of the UDHR (1948)

[52] Robert Ostergard, Jr., (1999): Intellectual Property: Universal Human RightsHuman Rights Quarterly,Vol. 21 p156-178 at 158. See also Peter Prove, who maintains that Intellectual Property do not possess the character of fundamental human rights but rather of subordinate or instrumental rights, Peter Drahos ‘ International Network on Disarmament and Globalisation’ at www.indp.org/trips.html (20th March, 2010)

[53] That is the UDHR and The ICESCR

[54] Giunna Julian-Arnold, International Compulsory Licensing: The rational and the reality. IDEA The journal of Law and Technology (1993) pg 352

[55] Ibid

[56] Ibid.

[57] Andrew Clapham, Human Rights Obligation of Non-State Actors(Oxford: OxfordUniversity Press, 2006), at 175.

[58] World Health Organization, ‘Essential Medicines: Definition’, available at http://www.who. int/medicines/services/essmedicines_def/en/. (7th August, 2010)

[59] MDG Gap Task Force, Millennium Development Goal 8: Delivering on the Global Partnership for Achieving the Millennium Development Goals: MDG Gap Task Force Report 2008(New York: United Nations, 2008) at 35.

[60] Constitutional Court of South Africa, Case CCT 32/97, 27 November 1997.

[61] (Article 15(1)(c) ICESCR

[62] (Article 15(1)(b) ICESCR

[63] Stephen P. Marks ‘Access to essential medicines as a right to health’ Health a human rights perspective

[64] Ibid

[65] Jamie Feldman ‘Compulsory Licenses: The Dangers behind the Current Practice.’ The Journal of International Business and Law (2009) at 139.

[66] Compulsory licensing is one of the main means for reducing the adverse effects of patents on price and availability of essential drugs.

[67]Human Rights and Intellectual Property: Statement by the Committee on Economic Social and Cultural Rights, UN Doc. E/C.12/2001/15, 14 December 2001, para. 4.

[68] Ibid., para. 18

[69] In my opinion, this includes compulsory licensing of pharmaceutical patents.

[70] Ibid., para. 35.

[71] Stephen P. Marks ‘Access to essential medicines as a right to health’ Health a human rights perspective.

[72] Ibid

[73] Committee on Economic, Social and Cultural Rights (CESCR), General Comment No. 14 on the right to the highest attainable standard of health, August 2000, UN Doc. E/C.12/2000/4, at para. 35.

[74] Stephen P. Marks ‘Access to essential medicines as a right to health’ Health a human rights perspective.

[75] Ibid.

[76] Patent Act (2005)

[77]India’s first patent legislation came into force as a result of the recommendations of the Lord Macaulay LawCommission.

[78]Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at 5.

[79] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future

[80] Ibid at 3

[81] This committee tried to defend ‘public interest’ in availability of food and medicine by examining inter alia, an effective system of compulsory licensing for food and medicine related inventions. They suggested that an application for compulsory licenses could be made to the comptroller general on grounds that India’s commerce or industry was being substantially affected and that export in the patented item was absent. (Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future)

[82] Ibid

[83] Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at10

[84] This section was very similar to section 41 of the English Act of 1949.

[85]Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 4.

[86] Ibid.

[87] MJ Adelman and S Baldia, ‘Propspects and Limits of the Patent provision in the TRIPS Agreement : The case of India ‘ Vanderbuilt Journal of Transnational Law Vol 29 1996 p 507

[88] R Ayyangar, ‘Report on the Revision of the Patent Law’ 1959, New Delhi.

[89] Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at10

[90] Ibid at 11

[91] Ibid at 12

[92] Ibid at 13

[93] Ibid.

[94] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 4.

[95] Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at 16

[96] This provision provides for a cumbersome and onerous application process that may discourage others from applying for a compulsory license grant.

[97] Section 92 of the Indian Patent Act of 2005 attempts to list the situations that encompass ‘reasonable requirement of the public’ but it still falls short of being precise and thus remains nebulous.

[98] This particular provision in my view, tries to cast that delicate balance that is needed between the rights of the society to access essential medicines and the right of the patent holder to still derive benefits from the invention.

[99] In compliance with Article 31 of TRIPS Agreement.

[100] Section 92A of the Indian Patent Act of 2005

[101] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 12

[102] Ibid

[103] Ibid at 15

[104] Ibid.

[105] Section 11A (7)

[106] Section 90 (1) (i)

[107] Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at 18

[108] Ibid

[109] Ibid at 19

[110] Ibid at 21

[111] These can be found in Chapter V of the Indian Patent Act (2005) Section 25 (1) (a) to (k).

[112] Chapter V of the Indian Patent Act (2005) Section 25 (2).

[113] Dipika Jain’s ‘Access to Drugs in India: Exploration of Compulsory Licensing as an Effective Tool’ HarvardLawSchool (2009) at 23.

[114] Ibid.

[115] Ibid.

[116] Ibid.

[117] This is similar to Section 84 of the Indian Patent Act of 2005

[118] Indian Patent Act (2005) Section 92 (3)

[119] TRIPS Agreement Article 31 (h)

[120] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 41.

[121] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 39.

[122] Ibid

[123] Ibid

[124] Shamnad Basheer and Mrinalini Kochupillai The ‘Compulsory License’ regime in India: Past, Present and Future at 40.

[125] Ibid.

[126] Constitution of the Republic of Kenya (2010)

[127] Universal Declaration of Human Rights (1948) Article 25 (1) that states everyone has the right to a standard of living adequate for the health of himself and of his family, including food, clothing, housing and medical care and necessary social services. Article 27 also provides for the right of everyone to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is writer.

[128] The International Covenant on Economic Social and Cultural Rights (1966), Article 12, states that the steps taken by the state parties to the present covenant (such as Kenya) to achieve the full realization of the right to health shall include those necessary for the prevention, treatment and control of epidemic, endemic, occupational and other diseases and the creation of conditions which would assure to all, medical services and medical attention in the event of sickness. Article 15 states that the States Parties to the present Covenant recognize the right of everyone to take part in cultural life; to enjoy the benefits of scientific progress and its applications and to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

[129] Section 40 (5)

[130] Section 43 (1) (a)

[131] That monitors counterfeiting of products in the market.

[132] That ensures that the drugs that are sold are genuine and are tested and safe for consumption

[133] Section 40 (2)

[134] Section 40 (3) (b) (i).

[135] In my opinion, if the sick person were to wait for 20 years, they may die waiting and as such, their right to health adversely affects their right to life; a consequence which could have been prevented or contained had compulsory license been issued.

[136] Section 80 (1) (b)

[137] Section 74

[138] Section 75

[139] Section 77 (1)

[140] Thomas pogge, Montreal statement on the human right to essential medicines Cambridge quarterly of healthcare ethics (2006) pg 5

[141] Ibid

[142] Thomas pogge, Montreal statement on the human right to essential medicines Cambridge quarterly of healthcare ethics (2006) pg 5

[143] Jamie Feldman ‘Compulsory Licenses: The Dangers behind the Current Practice.’ The Journal of International Business and Law 167 (2009).

[144] Ibid

[145] Ibid.

Categories
Free Essays

The role of social media as marketing tool for tourism in kenya. case study: kenya safari and tours.

INTRODUCTION

With two thirds of the global internet population visiting social networks, businesses are increasingly utilizing these platforms to engage with clients and other businesses, don’t get left behind!

Social Media is an extremely effective form of marketing which can be used to increase brand awareness, brand loyalty, customer service, and lead to increased sales. It can be used to present a business brand to millions of people worldwide.

Social media is not just for large corporations, small businesses can also reap the benefits of implementing a social media campaign and therefore for many businesses, social media is just one more buzz word they have to wrestle with. However, social media isn’t just a buzz word and it’s not going away social media can have a profound effect on almost any type of business. (http://www.housingea.co.uk/an_introduction_to_social_media_for_business)

Coming together with the Web 2.0 phenomenon, the birth of social media is busted out in new marketing era. It is becoming a hot topic for its huge influences. The existence of social media earns the attention of people by making them from being passive consumers to active producers in terms of sharing and contributing via networks (Anderson 2008, 63).

That is explanation why most companies today are thinking of applying social media into their business. Its advantages to and effects on organizations, however, have not been recognized accurately in comparison with other marketing tools.

Using social media as a marketing tool in tourism industry adds profound value to the new media trend. How tourism companies gain the benefits from social media is a worthy phenomenon to be researched

1. Scope of the study/backgrounds

Strategies of social media marketing in an organization are the main factors that contribute to a well-being of the most companies operating in business and customer markets. This is because the use of social media in marketing their products and service create customer awareness. Hence in most situations the customers tend to prefer to the services that are mostly satisfied with.

Planning a successful use of social media marketing strategy involves linking a company mission and business strategy to marketing decision and programs. In the current situation the case study company is using the social media marketing in marketing their tourism company and therefore it important for us to understand how the company is planning its operation and what are the current benefits of the company resulting from the use of social media marketing.

Social media marketing strategy in an organization defines how the organization uses the social media tools such as facebook, twitter and YouTube to achieve a marketing objective for the organization. The social media strategy implements and supports higher-level strategies and provides markets and customer information which is used for development and adjustments of the organization business strategy. the current approach being used by the case study company on the use of social media marketing shows that the company strategy is not fully implemented hence the company needs more decision on how to maximize the available marketing opportunities to win many customers depending on the improve strategy that they are heading to in terms of using social media marketing to market their company. The scope of the study will create proposals on how the case company can utilize social media marketing principles to achieve an effective market for their company. The outcome of the implementation of the suggested social media marketing principle and strategies will allow Kenya safaris and Tours to allocate enough resources strategically, and maximize market opportunities through the use of social media marketing which will increase the company reputation and increase profits of the company.

1.1 Research context

The theoretical part of this research will include various aspects of social media marketing strategies. The research was conducted in a co-operation of case study Company known as Kenya Safaris and Tours. Kenya Safaris and Tours have an office located in Nairobi, the capital city of Kenya and several reservation and booking in different countries. Kenya Safaris and tours is a company owned by the Ministry of tourism in Kenya and the company is specialized in offering tour services to individual customers and corporate customers traveling to Kenya

A qualitative approach was chosen in writing this research. The first part of the research will present the theoretical background followed by the company case company introduction and analysis

1.2 Purpose of the study and research question

Most companies operating in the tourism industry in, Kenya are either locally or foreign owned with majority of the companies having trying to adapt the use of social media marketing in marketing their company products and services. The fact that Kenya is destine to be a popular tourist destination has attracted large number of tourist all over the world. Therefore the introduction of use of social media marketing in advertising the companies across the planet is seen as a possible improve in the Kenya tourism industry. Though the companies doesn’t implement the use of this social media marketing correctly in regardless of the profit they earn by using it.

Therefore the research will try to investigate and generate strategies which will assist tourism companies in developing an effective use of social media strategies. The proposal discussed includes implementing major social media marketing strategies and other minor strategies to help the Kenya Safaris and tours achieve its business and organizational goals.

The final result of the research will present a social media marketing strategies which if implemented will result in Kenya Safaris and Tours gaining a competitive advantage in Kenya tourism industry. In theory, the research will try to contribute and generate new ideas from a holistic approach which may be of help in positioning and attaining competitive advantage by implementing social media marketing strategies. Therefore based on this information the research question for this thesis is work:

1. To find out how tourism companies are integrating social media into marketing so as to boost awareness and generate excitement about tourism destination?

2. What has the adoption and integration of social media strategies done to market tourism?

1.3 Limitation of the research

In this section the main concept are introduced and limitation for the research are presented

It is necessary to highlight assumption and various limitation of the study. The main focus of this study is business to customers. The objective was to prepare a social media marketing strategies that would serve the entire customers whom Kenya safaris and tours plans to appeal to during their period of operation. Social, media marketing strategies that can assist the case study company appeal to cooperate customers have been briefly analyzed in the empirical section. The limitation of this research affects how social media marketing strategies are examined and how an effective social media marketing strategy can be implanted.

The theories used in this research content have an international character. Although relating to marketing strategies , the research emphasize social media marketing strategies which concentrated only on matching companies offering the tour facilities to its customers’ needs. The technological aspect of information systems and application that are used in the social media marketing context are out of the scope but are only discussed briefly in terms of the value they can deliver to Kenya safaris and tours. It also essential to highlight that this study is not an effort to solve one specific aspects of developing a social media marketing strategies in details, but rather a research that would contribute to knowledge about various aspects of social media marketing.

1.4 Structure of the research

The research consists of six sections and the diagram in figure 1 illustrates the various sections it contains. Section 1 includes an introduction and background information of the research; the theories relevant for the research problem are presented in section 2 and 3. Section 4 entails a description of the methodology approaches chosen for the research. The case study (Kenya Safaris and Tours) company is presented in section 5. Sections 6, 7 and 8 include the empirical research and the discussion concerning the case study and the final conclusion is in section 9. The figure bellows shows how the research was planned and conducted and the linkages in the various sections

Figure1; structure of the thesis

2 THEORETICAL FRAMEWORKS

2.1 The evolution of social media in marketing business

The use of social media evolution in marketing business has become fundamentally transformative and is rapidly evolving the architecture of business, communications, and the dissemination of information and influence. To understand what marketing exactly means it define as a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return (Kotler & Amstrong 2010)

Today, there are businesses that engage in social media and those that do not. Those at least experimenting with the formidable, yet shifting landscape of intelligence and communication are learning how to adapt and connect in a new world of conversation, networking, and influence. Those that have yet to evaluate the opportunities and advantages for socialized marketing, service, sales, and branding will find it increasingly difficult to learn, adapt, and magnetize customers, prospects as well as their influencers.

As markets evolve, consumers gain a greater sense of adeptness and perspective. They too learn and adapt. In the process, individuals and the authoritative communities they form, possess a more sophisticated understanding of media literacy, community support, and prowess in new media communication. Consumers have choices and they’re increasingly practiced through natural selection. . (http://www.briansolis.com/2010/01/the-evolution-of-social-media-and-business/ (accessed 1 April 2011)

Then along came the internet and growing rapidly. Unlike the traditional marketing of mass media, internet broadens the scope of marketing in wider range of audiences. It overcomes the limitations of geography and time zones to send the marketing message very fast to target segments. In today‘s life, when customers are no longer being passive in access of information, the use of social media creates opportunities for both businesses and individuals to find their new audiences. Customers become more communicative and better in control than ever. (Ryan & Jones 2009, 19) The changes of marketing are mentioned in the figure below;

Figure 2; Social engagement spectrum (Armano 2009)

Through the social engagement spectrum showed in figure 2, we can see that marketing is experiencing a profound shift from lower engagement to higher engagement level. If the traditional marketing and tradigital marketing are push‘, then it becomes ?pull‘with social media nowadays. Even tradigital marketing is more interactive with users but it is lacks engagement of customers whereas social media empowers customers to participate in the online community by using social networking sites, for example. It does not mean anymore the technology only but social engagement with people has become a core factor. Thus with higher engagement, it leads to an increase in demand of niche markets, creates new opportunities in the emerging marketplace. (Anderson 2008, 57)

2.2 Social media overview

In this section the author gives an overview of social media and its impact on marketing definition and related concepts.

2.2.1 Web 2.0

The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators (prosumers) of user-generated content in a virtual community, in contrast to websites where users (consumers) are limited to the passive viewing of content that was created for them. (http://en.wikipedia.org/wiki/Web_2.0 (accessed 27 March 2011)

Goossen (2008) in an interview with Klein suggested the key concepts of Web 2.0 are the harnessing of social networking, collective intelligence. It more concentrates on the data collected through computers rather than its own technological factor (Klein 2008).

Web 2.0 is here today, yet its vast disruptive impact is just beginning. More than just the latest technology buzzword, it’s a transformative force that’s propelling companies across all industries toward a new way of doing business. Those who act on the Web 2.0 opportunity stand to gain an early-mover advantage in their markets (Musser & O‘Reilly 2006).

2.2.2 Social media

According to B&C (2010), the term “social media” is widely used nowadays. The first time it appeared was in 2004, after LinkedIn created its social networking application. The applications primarily an online technology tool to allow people to communicate easily, utilizing the Internet to share and discuss information (B&C, 2010). According to Zarrella (2010), social Media is defined best in the context of the previous industrial media paradigm. Traditional media such as television, newspapers, radio and magazines are one-way, static broadcasting technologies. Zarrella (2010) argues that magazines and newspapers are distributing expensive content to consumers while advertisers pay for the privilege to insert their ads into the content.

Readers, in turn, have no possibility to send the editors instant feedback in the case they disagree with something. New web technologies have made it easy for anyone to create, and most importantly, to distribute their own content. A blog post, a “tweet” on Twitter, or a YouTube

Video can be produced and viewed by millions virtually for free. Advertisers do not have to pay publishers or distributor’s huge sums of money to embed their ads; now they can create their own interesting content that viewers will flock to (Zarrella, 2010). Also, Weber (2009), states that traditional media such as television, radio and newspapers are providing one-way communication; while social media, on the other hand, allows everyone to publish and to contribute in online conversations. He defines social media as “the online place where people with a common interest can gather to share thoughts, comments and opinions”.

He further states that social media consists of social networks, such as Facebook, branded web destinations, like Amazon.com and ebay.com and companies, such as IBM and Dell. Additionally, Palmer and Koenig-Lewis (2009), define social media as online applications, platforms and media which aim to facilitate interactions, collaborations and the sharing of content”. The social media is a new world of unpaid media, created by individuals and companies on the Internet (Weber, 2009). According to Zarrella (2010), social media comes in many forms:

blogs
micro blogs (Twitter)
social networks (Facebook)
media-sharing sites (YouTube)
social bookmarking and voting sites (Digg, Reddit)
review sites (Yelp)
forums
virtual worlds (Second Life) Palmer and Koenig-Lewis (2009) also divides social media into the following key categories
Blogs– Comprising individuals or firms online journals that are often combined with audio or video podcasts.
Social networks– Applications allowing users to build personal web sites accessible to other users for exchange of personal content and communication.
Content communities– Websites for organizing and sharing particular types of content.
Forums/bulletin boards– Sites for exchanging ideas and information, usually around special interests.
Content aggregators– Applications allowing users to fully customize the web content they wish to access.
2.2.3. Benefits of social media

Social media marketing experts underscore the advantages of using social media for marketing as the ability to reach a wide audience, two-ways communication, accessibility and viral effect. Social media marketing promises to improve promotional efforts significantly. One of the major advantages of social media marketing is the ability to reach a wide audience breaking down geographic boundaries. Historically communication with others was limited by geographical boundaries and the current technological of the era. Today’s social media technologies enable nearly everyone to reach a global audience for interpersonal interaction and exchanging information (Hank, 2008).Web 2.0 encompasses tools and platforms that enable people from different part of the world to be connected and to exchange information with each other

2.2.4 Social media optimization

Social media optimization (SMO) consists of more narrowly defined activity than social media marketing. Varagic (2008) described social media optimization as a process of optimizing one‘s sites/ blogs to be higher presence in social media searches and sites, more easily linked by other sites and more frequently discussed online in blogosphere and other social media.

Social Media Optimization is in many ways connected as a technique to viral marketing where word of mouth is created not through friends or family but through the use of networking in social bookmarking, video and photo sharing websites. In a similar way the engagement with blogs achieves the same by sharing content through the use of RSS in the blogosphereand special blog search engines to understand this work the diagram below shows how various key social platforms are linked

Figure 3; key social media platforms (source; virtual project consulting 2010)

2.3 Word-of-mouth and social media marketing

Word of mouth is a pre-existing phenomenon that marketers are only now learning how to harness, amplify, and improve. Word of mouth marketing isn’t about creating word of mouth — it’s learning how to make it work within a marketing objective.

That said, word of mouth can be encouraged and facilitated. Companies can work hard to make people happier, they can listen to consumers, they can make it easier for them to tell their friends, and they can make certain that influential individuals know about the good qualities of a product or service.

Word of mouth marketing empowers people to share their experiences. It’s harnessing the voice of the customer for the good of the brand. And it’s acknowledging that the unsatisfied customer is equally powerful.

Word of mouth can’t be faked or invented. Attempting to fake word of mouth is unethical and creates a backlash, damages the brand, and tarnishes the corporate reputation. Legitimate word of mouth marketing acknowledges consumers’ intelligence — it never attempts to fool them. Ethical marketers reject all tactics related to manipulation, deception, infiltration, or dishonesty.

All word of mouth marketing techniques are based on the concepts of customer satisfaction, two-way dialog, and transparent communications. The basic elements are:

Educating people about your products and services
Identifying people most likely to share their opinions
providing tools that make it easier to share information
Studying how, where, and when opinions are being shared
Listening and responding to supporters, detractors, and neutrals

In order to deepen the understanding of social media marketing and word-of-mouth marketing, a comparison is provided in the Table below

Word-of-mouth marketing (WOMM) Social media marketing (SMM
Relies primarily on influencers to spread the word.Spreads by itself through the social web and relies on passing message along from person-to-person.
Requires excellent product or service influencers can use, be excited about and pass along.Message must be outrageous, entertaining or provide exceptional value to attract attention and be passed along
Generates brand-awareness and sustained website traffic.Not always relevant to the brand
Engages customers long-term through the product life-cycle.Usually generates a short traffic spike.
Online and offline (15 – 20% online).Online only.

Table 1; comparison between Word-of-mouth marketing (WOMM) and Social media marketing (SMM) (Rijk 2007)

From Table we can see most clearly the differences between the two types of marketing. Word-of-mouth marketing is based on the drastic involvement of user and empowers the ?influencers’ who play the role of opinion-making leaders spread the word about your products and services both online and offline whereas social media marketing makes interaction merely online through social media channels.

Word-of-mouth Marketing Association (2010) has suggested different subcategories of word-of-mouth marketing techniques such as buzz marketing, viral marketing, community marketing, grassroots marketing, evangelist marketing, product seeding, influencer marketing, cause marketing, conversation creation, brand blogging and referrals programs. Brief explanation is given below;

Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand.
Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email.
Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums); providing tools, content, and information to support those communities.
Grassroots Marketing: Organizing and motivating volunteers to engage in personal or local outreach.
Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf.
Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.
Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others.
Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause.
Conversation Creation: Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity.
Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.
Referral Programs: Creating tools that enable satisfied customers to refer their friends

(http://womma.org/wom101/2/ (accessed 27 March 2011)

3. SOCIAL MEDIA AND TOURISM

3.1 The different forms of social media

Social media websites come in a wide variety of ‘flavours’, which are all broadly based around the premise of personal interaction, creating, exchanging and sharing content, rating it and discussing its relative merits as a community. In today‘s consumer‘s life, social media have reached the position where very fast-evolving growth and its overwhelming coverage in digital media scene have been recognized. More than 70% of companies have already used social media and many are unresisting of social media‘s increase. Social media is approaching to a large number of active Internet users all the time by its variety of platforms which provoke online customers’ interaction, facilitate the content creation and sharing (Bloomberg BusinessWeek 2009).

Ryan and Jones (2009, 157-169) have developed a list of social media forms which is based on relatively their primary functions.

Social bookmarking

Soacial bookmarking allow users to ‘save’ bookmarks to their favourite web resources such as pages,audio, video, whatever and categorize them using tags labels that help you to identify and filter the content you want later. The idea of social bookmarking services is to stimulate the users to manage their bookmarks using tags instead of having them in the browser-based systems of the computer‘s folder. This also makes them easy to share with friends, colleagues or the world at large, and the tag-based organization means no more cumbersome hierarchical folder systems to remember. Just choose a ‘tag’ and you’ll be presented with a list of all the bookmarks labelled with that tag.

Behind the scenes these sites anonymously aggregate the data submitted by all of their users, allowing them to sort and rank sites according to their user-defined tags and popularity. One favourite social bookmarking site is delicious.com

The advantage for using boomarking in marketing is that it create an exposure to your business through its useful content it makes it easy for visitors to bookmark your pages by providing’ Share this’ links or icons encouraging them to do just that you can harness the social element of these sites to improve your reach, and get valuable, targeted traffic in return. The tags applied to your pages by people who add them to social bookmarking sites can help search engines and visitors to gauge what your site is about more effectively. This can boost its perceived relevance and authority for particular keywords, which can in turn help your search visibility. (Ryan & Jones 2010, 158)

Social media submission sites

Social media submission sites are made for submission and discussion of articles about online marketing, are rather like social bookmarking sites only instead of saving personal bookmarks users submit articles, videos, podcasts and other pieces of content they think the broader community would appreciate. The more people who ‘vote’ for a particular content item, the higher up the rankings it rise. Submissions that get enough votes end up on the site’s home page, which can drive significant traffic. As well as the votes, of course, there also tends to be a lot of discussion and debate on these sites, which means they can offer tremendous insight into the way people think and react. Some favourite social media submission sites are Digg (www.digg.com) and Reddit (www.reddit.com), and niche sites like Sphinn (www.sphinn.com)

There are many advantages of social media submission sites such as amplifying the visibility, traffic and online. If a company have the articles or content rise high in those social media submission sites, that company will get a significant traffic and loyal. Besides that, the opportunities for a company to reinforce its profile and a perceived position within online community are at hand. If you keep on with anything relevant and compelling by joining into the submission and online round-table discussion, audiences will start to pay attention to you, trust you and gain perception of your brand or service. (Ryan & Jones 2009, 159)

Forums and discussion sites

The advent of forums and discussion sites comes at very early in the days of Internet development. Some of most popular discussion boards come up such as Yahoo Groups and Google Groups. Those groups are created with public or only-member access which allows users to post messages and to discuss within the forum. (Ryan & Jones 2009, 159)

Forum and discussion sites are used for many reasons in marketing for example

Forum and discussion sites are used for many reasons in marketing for example

Get closer to your customers: Checking out what consumers are talking about in forums is a great way to find out what makes them tick. The more you can learn about your customers, the better prepared you will be to engage with them in a meaningful way.
Raise your profile: Contribute to the discussion, offer help and advice, and demonstrate your expertise. Pretty soon people will start to respect and trust your contribution to the community – and that can do wonders for your online reputation and profile.
Nip bad things in the bud: By participating in forums you will be able to spot potentially negative comments or conversations relating to your business or brand and be proactive in resolving them before they escalate
Media sharing sites

Media sharing sites are incredibly popular it allows communities of members to upload, share, comment on and discuss their photographs. YouTube (www.youtube.com), Y! Video (video.yahoo.com), MSN Video Soapbox (video.msn.com/) and others do the same for video content. The sites typically allow you to make content publicly available or restrict access to the people you specify, to send content to your ‘friends’, and even to ‘embed’ (seamlessly integrate) the content in your blog post or website for others to find it, distribute it and discuss it. Some favourite media sharing are Flickr (www.flickr.com) and Picasa Web Albums (www.picasaweb.google.com)

Marketers use media sharing site for analyzing the popularity of items on content submission sites and reading the user comments, you can gain insight into your target market’s likes and dislikes and can incorporate that into your own content creation. These sites are the ideal vehicle for rapid distribution of your own digital media content. (Ryan & Jones 2009, 160)

Reviews and rating sites

They allow users to review and rate companies, products, services, books, music, hotels, restaurants – anything they like. They can be stand-alone review sites, like Epinions.com (www.epinions.com), Reviewcentre.com (www.reviewcentre.com) or LouderVoice (www.loudervoice.com), or a review component added to a broader site, such as the product rating and review facilities on e-commerce sites like Amazon (www.amazon.com)

Review and rating sites rely on advertising to generate revenue and therefore offer advertising opportunities for businesses either directly or through advertising and affiliate networks. Even if people aren’t rating your business directly, you can still get valuable information on these sites on what’s working for consumers and what’s not within your particular industry with the use of review and rating sites. It also helps in posting reviews about your business, that sort of feedback is pure gold reinforcing what you’re doing well and pointing out areas where you can improve for marketing the site is a research free tool. (Ryan & Jones 2009, 162)

Social network sites

The purpose of those sites is to allow users participate in a social network by creating their own profile and connecting with friends or other contacts within network or inviting friends and real-world contact to joint into the online community. So, there are vast numbers of users engaged in the social network sites. It is an online meeting platform for people for creating the content, sharing them with others, and interacting with the like-minded people easily (Ryan & Jones 2009, 162).

Talking about social network, some popular sites have come up such as Facebook, MySpace, Bebo and LinkedIn, which attain most attention on the stream of social media marketing.

Social network sites are best places to look for advertising chances based on analyses of users’ profile information. Controversies around the benefit of advertising in social network sites still take place. However, it is undeniable that the advertising is trendy on those sites. (Ryan & Jones 2009, 162)

If a company offers customers transparent information and stimulate their interest in products or services, the long-term relationship is created online and offline. The company should keep eyes on customers and let the influencers within the online community to promote the company‘s brand.

Podcasts

Podcasts are, in many ways, just the rich media extension of the blogging concept. A podcast is simply a series of digital media files (audio or video) distributed over the internet. These can be accessed directly via a website or, more usually, are downloaded to a computer or synchronized to a digital media device for playback at the user’s leisure. They tend to be organized as chronological ‘shows’, with new episodes released at regular intervals, much like the radio and television show formats many of them emulate. Users can usually offer their feedback on particular episodes on the accompanying website or blog. Some fovourite podcast are Podcast.com (www.podcast.com), Podcast Alley (www.podcastalley.com), Podomatic (www.podomatic.com) and even Apple’s iTunes (www.apple.com/itunes) offer a convenient way to find, sample and subscribe to

podcasts of interest.

Podcasts can be a valuable channel to reach target market. Unlike mass media, this social media platform open the new way for companies to be digital conscious players. Companies can create own podcasting services which provide podcasts to prospect customers. Initially, if customers are less tech-savvy, they prefer to view now or listen now with nothing to install or register. However, if the customers find the content compelling and right for them, then they will subscribe the company‘s site. (Ryan & Jones 2009, 165-166)

Micro-blogging

Micro-blogging is a relatively new craze that’s sweeping through online early adopters, and looks set to explode as more people embrace social media and learn of its existence. It is essentially a short-message broadcast service that let’s people keep their ‘friends’ up to date via short text posts (usually less than 160 characters). Some favourite micro blogging sites are Twitter (www.twitter.com) is the biggest player in this space, Google-acquired Jaiku (www.jaiku.com) and Pownce (www.pownce.com). The real value of micro-blogging isn’t necessarily in the individual posts; it’s in the collective aggregation of those mini-posts into more than the sum of their parts. When you receive frequent, short updates from the people you’re connected to, you begin to get a feel for them, to develop a better understanding of what they’re all about, and to feel a stronger connection with them.

Micro-blogging is efficient in improving customer service. On micro-blogging sites, a company can share the information about products and services very quickly. People can post their opinions, which can be positive comments or complaints. Those are like instant feedback for the company to analyse, resolve any mistakes and to improve customer service managing system

Wikis

Wikis are online collections of web pages that are literally open for anyone to create, edit, discuss, comment on and generally contribute to. They are perhaps the ultimate vehicle for mass collaboration, the most famous example, of course, being Wikipedia (www.wikipedia.org), the free online encyclopedia. (Ryan & Jones 2009, 168-169)

Wikipedia has become the largest encyclopaedia in the world with more than 3 millions articles in English, reaching the visitors number of 68 million every month. In comparison with Encyclopaedia Britannica – an English encyclopaedia published by experts, Wikipedia has surpassed to be the leader in this field (Wikipedia n.d).

Wikis for marketers

The concept of using wikis as a marketing tool is a very new phenomenon, and their value may not be as readily apparent as with some other forms of social media. However, they are a powerful collaborative tool and, with collaboration between companies and their customers in the ascendancy, look out for increasing use of wikis by innovative organizations in the very near future.

Build a strong collaborative community of advocates around your brand: Wikis can be a great way to encourage constructive interaction and collaboration between people inside your organization and people outside it. Consumers begin to feel ownership and connection with a brand that encourages, facilitates and values their contribution. That ownership evolves into loyalty and then advocacy: powerful stuff from a marketing perspective, especially when you consider that these contributors will often be online influencers who will go on to sing your praises on other social media sites.
Harness the wisdom of the crowd: How much talent, knowledge and experience do you have inside your organizationProbably quite a lot but it pales into insignificance when compared to the massive pool of talent, experience and expertise you can access online. Retired experts, up-and-coming whizz-kids, talented amateurs, undiscovered geniuses – they’re all out there. Wikis give you a simple, powerful and compelling way to draw on and capture some of that collective intelligence. Why not harness a wiki, for example, to help refine the design of your products, come up with your next great marketing campaign, define a more efficient business process, produce and/or augment product documentation, develop a comprehensive knowledge base – or anything else that might benefit from a collaborative approach
Blogs

In the space of a very few years the widespread popularity and adoption of the blog as a medium of self-expression and communication have caused one of the most fundamental shifts in the history of modern media. Barriers to entry have come crashing down, and easy-to-use blogging platforms have liberated millions of individuals, giving them access to a global audience. People all over the world are using blogs to report local news, vent their frustrations, offer their opinions, share their visions and experiences, unleash their creativity and generally wax lyrical about their passions. Bloggers read each other’s posts, they comment on them, they link to each other prolifically, and the best of them have a massive following of avid and loyal readers. These readers go on to elaborate on what they’ve read in their own blogs, and spread the word through their own online social networks. Some fovourite blogs are (www.blogger.com) and WordPress

(www.wordpress.com)

Blog is becoming an important component in the business arsenal too, adding a personal component to the bland corporate facade, helping companies to reach out and make human connections in an increasingly human online world. Blogs also helps to show customers a personal side to your business, give them valuable information they can use, provide answers and improve their overall experience of dealing with your company. (Ryan & Jones 2009, 164-165).

3.2 Definition of tourism

Although many of us have been “tourists” at some point in our lives, defining what tourism actually is can be difficult. Tourism is the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes.

Tourism is a dynamic and competitive industry that requires the ability to constantly adapt to customers’ changing needs and desires, as the customer’s satisfaction, safety and enjoyment are particularly the focus of tourism businesses

3.3 Marketing and Promotion of tourism in Kenya

There is need to change the image or perception of Kenya in overseas markets which has been adversely affected by negative publicity, whether warranted or unwarranted. The Kenya Tourist Board shall be strengthened to continue its key role in promoting and marketing Kenya both internationally and locally. Key policies include the promotion of up market eco-tourism and wildlife safaris; gradual move away from low value package or mass tourism; the diversification of tourism products and markets; and the promotion of regional and domestic, as well as international, tourism. Emphasis shall be placed on obtaining a precise understanding of customer needs, and developing and delivering the products that customer’s desire. The policy endorses the following broad strategies for development of tourism from international, regional and domestic markets:

3.3.1 International Tourism

The main objective (once the current market recovery initiative is completed) is to establish Kenya as the destination of choice in Africa for international visitors. Destination marketing shall be spearheaded by Government through the KTB in partnership with the private sector. The main means of achieving this objective shall be to:

Differentiate Kenya with a distinct market image and positioning in target markets as a quality safari and coastal destination offering a rich diversity of culture, adventure and activity experiences;
Build on the new Kenyan brand image in a manner that reflects the diversity of the tourism product and that has a strong and distinct appeal in the marketplace
Maximize the impact of scarce marketing resources of the government and private sectors by aiming at concentration rather than dispersal of marketing efforts;
Target new segments in established source markets and core segments in emerging markets, particularly in Africa and Asia;
Effectively carry out joint marketing with appropriate partners, particularly with the Kenyan private sector, airlines, KWS, exporters, regional operators; and other tourism and conservation organizations;
Establish overseas offices in key markets and employ marketing representatives through the Kenya Tourist Board on an agency basis in subsidiary markets;
Work closely with EAC partner states to jointly market complementary products and to facilitate multi-destination tourism within the region;
Make full use of, and adapt to, the opportunities afforded by internet and niche marketing to influence consumers and travel agents, and to increase the marketing reach of Kenya in new emerging and niche markets;
Encourage the making of documentary and feature films in Kenya as a highly cost-effective means of increasing destination awareness; and
Support the establishment of a sustainable funding mechanism for tourism marketing and development;

The Task Force (comprising line Ministries and private sector representation) which has been appointed by Government to address media responses to matters relating to terrorism threats and their implications for tourism shall remain in place in order to ensure consistency in Government media communications and to avoid sending inappropriate signals to the generating markets.

3.3.2 Domestic and Regional Tourism Markets

Domestic and to a lesser extent regional tourism have sustained the operation of many hotels, lodges and other tourist facilities during recent difficult periods. The marketing strategy recognizes the importance of these markets, and the need to allocate adequate resources and budgets for the promotion of regional and domestic tourism.

3.3.3 Domestic Tourism

Kenya’s tourism products attract visitors from all over the world. However, most Kenyan nationals have not been able to experience the same attractions due to financial constraints, lack of tourism knowledge coupled with a paucity of programmes and packages that would enable nationals to participate in domestic tourism. Strategically, the domestic market (comprising Kenyan nationals as well as foreign nationals living in Kenya) shall be further developed to form an enduring foundation of the demand for tourism facilities and services, and not just a temporary palliative during times of difficulty. Focusing on tourism awareness education, public relations and publicity, Government shall take a proactive role in promoting domestic tourism to nationals and residents of Kenya as a core strategy. It shall forge linkages between the industry and national and resident domestic segments through ongoing tourism awareness educational campaigns aimed at the local population; sensitizing tourism suppliers as to the value of domestic tourism; and encouraging the development and promotion of tailor-made products, programmes and packages specifically for domestic tourists.

3.3.4 Regional Tourism

Tourism practitioners shall also be encouraged to recognize the importance of, and pay increased attention to, attracting visitors from other parts of Africa to Kenya by developing and implementing specific strategies and action plans aimed at nationals and residents of neighboring countries. Particular attention shall be given to promotions to those African countries with which Kenya has good air links and to which Kenya can offer complementary – rather than similar – products.

3.3.5 Cruise Tourism

Government shall seek to re-establish Kenya’s role and position in Indian Ocean cruise tourism by encouraging KPA to develop improved cruise ship and passenger reception facilities at the Port of Mombasa. It shall also encourage KPA and other stakeholders to actively participate in the Cruise Indian Ocean Association; attend Sea Trade and other cruise industry trade exhibitions, particularly with a view to attracting North European cruise lines to winter in the Indian Ocean using Mombasa as a homeport; and join together in targeted marketing to individual cruise lines. Government shall also encourage and support measures to re-establish cruise tourism on Lake Victoria. (http://www.tourism.go.ke/ministry.nsf/doc/Final_Draft_National_Tourism_Policy.pdf/$file/Final_Draft_National_Tourism_Policy.pdf (accessed 21 January 2011)

4 RESEARCH METHODOLOGIES

The objective of section (section 3) is to explain how the research was conducted detailing the methods used and evaluating reliability and validity of the research.

4.1 Research approach

Due to nature of the study the study a qualitative research approach was used to examine the study. A qualitative method as pointed by Strauss and Corbin (1998) allows respondents freedom of expression, opinion, views, and arguments that might not have been attained explicitly through other approaches. Qualitative research according to Collins and Hussey (2003) also helps the researcher to discover different aspects during the interview and investigates answers in details

“A major strength of the qualitative approach is the depth to which explorations are conducted and descriptions are written, usually resulting in sufficient details for the reader to grasp the idiosyncrasies of the situation.”

“The ultimate aim of qualitative research is to offer a perspective of a situation and provide well-written research reports that reflect the researcher’s ability to illustrate or describe the corresponding phenomenon. One of the greatest strengths of the qualitative approach is the richness and depth of explorations and descriptions.” Myers (2002)

Main Types of Qualitative Research

Case studyAttempts to shed light on phenomena by studying in-depth a single case example of the phenomena. The case can be an individual person, an event, a group, or an institution.
Grounded theoryTheory is developed inductively from a corpus of data acquired by a participant-observer.
PhenomenologyDescribes the structures of experience as they present themselves to consciousness, without recourse to theory, deduction, or assumptions from other disciplines
EthnographyFocuses on the sociology of meaning through close field observation of sociocultural phenomena. Typically, the ethnographer focuses on a community.
HistoricalSystematic collection and objective evaluation of data related to past occurrences in order to test hypotheses concerning causes, effects, or trends of these events that may help to explain present events and anticipate future events. (Gay, 1996)

Table 2; Types of qualitative research methods (James Neill 2006)

4.2 Data collection and Methods

The data used in the analysis was gathered from two main sources. As discussed by the Saunders et al. (1997), for a research to be considered a valid and accurate, both primary and secondary sources of data have to be used

4.2.1 Primary sources
4.2.1.1 Interviews

Primary data was collected in form of interviews with industry experts who comprised of ministry of Tourism in Kenya and established Tour operators in Kenyan Safaris. All discussions were recorded during telephone conversation. The data was then transferred to a Microsoft Word document in order to avoid omitting information or ambiguous errors. Also to ensure that the right information was retrieved over the telephone, the respondent requested copies of the answered as email attachment. The preliminary questionnaires and information was sent prior to the interviews with background information to formalize the respondent in the research area. The duration of the interview was approximately forty-five minutes per respondent

4.2.2 Secondary sources

4.2.2.1 Text books

Text books are written by different professionals and academic staff. They mainly do not have a specific reference to a certain areas and few of them are recently published however, the merit of using text books is that they basically contains generals ideas and a researcher can compare different authors on different topics

4.2.2.2 Newspapers and related journals

The journals used were current or archives. Newspapers contain information researched by journalist who might be biased. Attention was paid to newspapers articles used. Journals have more tendencies to be biased even though they are more practical in orientation. The journals used in this research were mainly in electronic format and downloads via the internet.

4.2.2.3 Past research

Past research constitute research conducted by other students in the past years. In the this researcher, past research was used mainly to gain ideas on how past research was conducted and format of the research

4.2.2.4 Electronic sources

Internet contains the most updated information about the area of researcher. Even though the internet has much information regarding the researcher area, Collins and Hussey (2003) argue that researchers have to be careful that they do not become victims of information overloads where they can spend long time searching for irrelevant information from the internet. The internet was used to retrieved up-to-date information as well achieves relating to the researcher areas. The researcher was aware of information bias and information overload as the main disadvantage of using the internet. As a result of this, Web address from newsgroups, companies’ Web pages and established search engines were the only ones used.

4.2.2.5 Reliability and Validity

Collins and Hussey (2003) argue that four experiments are commonly used to establish the quality of a case study research. The four experiments are constructed validity, internal validity, external validity and reliability. As Collins and Hussey (2003) elaborate, reliability and validity are critical issues in qualitative research since the measures of the reliability may offer procedures rather than end results. Validity in the same way should focus on extracting rich data from explanations and analysis. Internal validity tests concern explanatory cases studies in which only the study with casual relationships is studied. From the results of the discussion of this case study, the study is explanatory by nature which means that internal and external validity tests are not relevant to and thus not applied.

The case study consists of tour and Travel Company categorized under the tourism sector. The study is reliable and the data of this study is based on the data was gathered from the interview

5. CASE STUDY COMPANY

The case was selected because the aim and the objective of this study was to find out how the social media outline the market place situation and the marketing strategies and programmers that would help the case company achieved its business and organization goals. Apart from that, the researcher knows more about case company and the research was needed since the case company had not utilized the available social media strategies in marketing their company.

Kenya safaris and Tours is a travel and tour company providing tour operation services in Kenya. The company was founded in early 2006. Being a Kenyan company, Kenya Safaris and Tours reservations staffs have extensive first-hand knowledge of the country to assist and advise the customers in designing their holiday itinerary. The company provide the following services to intervals customers and business customers: luxury tours, chauffeur-driven and self-drive car hire, hotel and lodge reservations ,conferences, facilities, camping safaris mountain climbing, beach holidays, water rafting and gorilla safaris. In addition, the company is able to offer their customers tailor-made services upon request.

6. EMPIRICAL RESEARCH

The main results that were achieved discussed the importance of a social media in an organization and the factors that contribute to a successful social media marketing strategy for the case company. Since the case study company is still new company the information obtain from the research was used to develop the following paragraphs that constitute the case company use of social media to realize its marketing trends and objectives.

6.1 Background information

Kenya Safaris and Tours began operations on 15th January, 2006 and provide safari adventures, sport and travel packages to planning to travel or going for holidays to Kenya. The Kenya Safari and Tours majority of customers are from Europe and the United States of America, though the highest numbers of customers are particularly from the United Kingdom. The founders and employees of Kenya Safaris and Tours are experienced travel-industry professionals and passionate about what Kenya Safaris and Tours promotes and offers.

6.2 A glance at the Kenya tourism

Kenya recorded the highest number of tourists’ arrivals ever at 1,095,945 tourists as at 31st December, 2010. This was a 15% growth compared to the 952,481 experienced in 2009. This figure excludes the cross border tourists’ arrivals which could add up to another approximately 700,000 tourists once the results are fully tallied by the Kenya National Bureau of Statistics.

The 2010 Tourism performance has surpassed the 2007 record by 4.5 percent the later being the best recorded year in terms of tourist arrivals and earnings. “This performance is impressive and is optimistic to achieving Kenya’s vision target of 2 million international tourists by 2012
the sector has earned $1.8 billion in terms of revenue earnings within the same period. This is the highest tourist revenue ever recorded and it represents an impressive growth of revenue by 18 percent compared to the 2009 revenues.

The Kenya tourism board said the performance was impressive and the sector has shown great resilience in spite of thelocal and global challenges. The board accrued the impressive performance to aggressive marketing in the new markets and efficient utilization of the resources available.

Kenya Tourist Board has continued to reposition the destination since 2009 as a high value for high spending tourists and this is paying good dividends. The table below gives a complete Kenya tourism statistics for visitor arrival and departures by purpose of visit

ARRIVALSDEPARTURES
Year/HolidayBusinessVisitors in 00HolidayBusinessVisitors in00
QuarterVisitorsVisitorsTransitTotalVisitorsVisitorsTransitTotal
1996795.7100.555.8952785.799.259.5944.4
1997820.8103.756.2980800.5101.157.5959.1
1998804.8101.772.3978.8744.394.066.2904.5
1999686.986.8101.9875.6672.985.091.9849.8
2000746.994.4107.4948.7746.593.7106.4946.6
2001778.298.3138.51,015772.297.0103.5972.7
2002728.892.1152.6973.5742.093.2134.1969.3
2003732.686.6163.3895.99744.693.4153.6991.6
2004684.0182.1219.11,085.2606.6164.1198.4969.1
2004885.6246.4162.21,294.2856.2255.8147.91,259.9
20051,063.2206.179.81,349.11,027.1201.671.61,300.3
20061,087.5226.2137.21,450.91,077.9219.5116.81,414.2
20081,278.5242.2130.91,651.61,232.0232.3124.61,588.9
2009936.1109.462.01,107.50891.7108.965.21,065.8
20101,061.2180.698.41,340.21,064.9169.397.41,331.6

Table 3; Visitor’s arrival and departures by purpose of visit (source; ministry of tourism Kenya)

6.3 Results on the company’s market analysis

6.3.1 Market summary

The research found that the travel and tourism market is generally categorized Business and leisure travel are always grouped together. The tourism market is however separated into domestic and international tourist. Domestic tourist comprise individuals from the specified country who purchase holiday packages in their country where international tourists comprise individuals from other nationalities purchasing holiday packages in other countries apart from their country. In Kenya, domestic tourist account for approximately 23% of industry revenues with international tourist accounting for 77%.Business travelers are usually divided into two categories, the medium-to-large corporate account, and the small independent businessman. Leisure travelers are classified according to the types of packages they purchase, income, or age.

For Kenya safaris and tours, the company has four primary safari travel groups that constitute, adventure, special-interest, honeymoons and sightseeing (short safaris) expeditions, high-income travelers, budget-conscious travelers and families, students and seniors

In Kenya tourist industry, adventure safaris travel generate approximately ˆ0.3 billion of the approximately ˆ0.5 billion- annual industry revenues. ˆ 0.1-0.15 billion of these revenues is accounted from UK markets. Based on these and other figures, Kenya Safaris and Tours estimated UK safaris travel, markets to be worth approximately ˆ 100 million annually.

6.3.1.1 Market demographics

Kenya Safaris travel is categorized under the leisure travel category. Safari travel is sub category of leisure and can be further sub categorized into long and short adventure travel. Both long and short adventures might involve physical and athletic activities. Long adventure safari activities, as then name suggests, generally involve long duration of traveling in the wildness where short safaris activities are always short in duration and cheaper compared to long safaris.

Safaris travelers are more likely to be new couples or old couples. Kenya Safaris and Tours’ primary customers are married couples, ages 25-35 with children and household income over $ 50,000. Kenya safari and Tours is panned to be located in the UK.

The Wild animals in the natural habitat, beautiful scenarios and sunny beaches attract many safari-oriented individuals. Per capita the UK has more people than any other nation who actively participate in, the Kenya safaris, such as mountain climbing, hunting safaris, honeymoons packages etc. These are the people in Kenya Safaris and tours market. Kenya Safaris and tours should focus on the sale and promotion of safaris travel primarily to individual through the use of social media. And social media marketing strategies so has to be more successful

6.3.1.2 Markets needs

Kenya safaris travel activities are a specialized products and first- hand knowledge of these activities are necessary in order to effective promote and sell them. Many potentials customers are unsure of the location they wish to reach. Part of the value associate with travel agencies is knowledge they posses about destinations. Customers depend on the agency to provide them with sound advice for a competitive price. Kenya Safaris and Tours should be confident in its ability to do so. Kenya safaris and Tours can safe the customers’ time and money and help to ensure that customers are satisfied with their vacations-

6.3.1.3 Market Trends

One notable trend in the travel industry is increased deregulation. Deregulation has increased competition and the need for differentiation. In many cases, the price of airfare and other travel –related services has dropped. Additional include the limit of agency commission by many of the larger airline, increases in adventure travel, and the reduction of profit margins. The UK markets contributed the highest number of tourist to Kenya and this trend is predicted to continue.

6.3.1.4 Market growth

The Kenya tourism industry is growing. Reasons for this growth include a government initiative to promote the industry in foreign market through the of social media adverts for example the Magical Kenya on BBC news adverts., 5% annual domestic economy improvements has increased business which in turn boosted domestic business travel agencies.

6.3.2 SWOT analysis

The following four sections of the SWOT analysis was obtained from the interviews contacted on the case company and are the most relevant issues to Kenya Safaris and Tours successful operation. From the research it can be outline that Kenya Safaris and Tours strengths include its management, experienced staff, marketing knowledge and targeted focus. Kenya Safaris and Tours should capitalize on these and other strengths to take advantage of opportunities and manage treats. The Kenya Safaris and tours weaknesses are primarily those inherent in a growing venture are discussed in one of the following sections.

6.3.2.1 Strengths

Strengths in this perspective are an internal capability or factor that can help support the organization in achieving its objective. Kenya Safaris and Tours strengths are

Management: Kenya Safaris and Tours manager has a successful record in this industry. His experience and the network of valuable connections he has developed should contribute to Kenya Safaris and Tours’ success.
Location: Kenya Safaris &Tours is ideally located. Kenya is a popular destination with safari enthusiasts who make Kenya Safaris and Tours target audience profile. The company is also located in the UK which accounts most of the highest numbers of safari travelers to Kenya.
Experienced staff: Kenya Safaris and Tours team is experienced in the travel business and in adventure safaris. Most members have over three years experience. Moreover, the members are willing to spend extra time and effort to build a successful business. In addition with the intangible benefits derived from succeeding in an independent endeavor, Kenya Safaris & Tours is ready to offer profit sharing and potential partnership opportunities to its employees.
Popularity of safari travel: safari activities are very popular, and Kenya safaris and tours is aware that the popularity will continue to grow, Many of the safaris activities such as mountain climbing, honeymoon safaris, and game viewing, have had family connections for many years where families tend to go for safaris after they have been recommended by members of the family who have been on safari.
6.3.2.2 Weaknesses

A weakness is an internal capability or factor that may hinder the organization from achieving its objectives or effectively handling opportunities and threats. Kenya Safaris and Tours weaknesses are:

Start-Up status: Kenya Safaris and Tours is a start up business where most of start up companies tends not to perform well.
Limited personnel: Though Kenya Safaris and Tour staff are exceptional, but from the research it shows that the workers had to work long hours with little pays.
Financing: Preliminary estimates of sales and expenditures suggest that Kenya Safaris and Tours will remain financially stable. However, unforeseen expenditures or poor sales will threaten company’s cash position, which will be partially vulnerable during the introduction of social media marketing into the company’s operation
6.3.2.3 Opportunities

Opportunities are external circumstances or factors that Kenya Safaris and Tours can attempt to exploit for higher results. Kenya Safaris and Tours opportunities are:

Growth market: The Kenya tourism industry is growing 8%annully, and preliminary estimates suggest that the UK market is part of that growth rate.
Potential to achieve sales from the UK market: As Kenya Safari and Tours establishes to gains financial stability; it can begin to market its services in other markets. The company plans to begin this effort via a World Wide Web campaign (Internet) as this will help to diversify its communications efforts through the use of social media marketing
Potential to become a premier provider: from the researcher it can be argued that Kenya Safaris and Tours have the management and staff to produce a top-quality service.
Vertical integration: The potential to integrate services and add branches exist.
6.3.2.4 Threats

Threats are external circumstances or factors that could inhibit Kenya Safaris and Tours’ performance if not considered. Kenya Safaris and Tours threats are:

Internet and price competition: when airlines were deregulated, price competition increased. Further, the internet has provided a sales medium for business that competes on price and has also given consumers the ability to plan and arrange expedition for their own benefits. Thus, the traditional agency has greater competition.
Local competition (existing and potential): There are no agencies in the UK region that specialize solely in Kenya safari travel. However, most of the travel agencies can book a safari expedition to Kenya. More over, additional Kenya safari travel specialists may follow Kenya Safaris and Tour’s lead.
Economic downturn: The strong Kenyan domestic economy has been good for the travel and tourism industry continued growth is anticipated. However, unforeseen or unanticipated economic recession would threaten Kenya Safaris and Tours’ existence.
6.3.3 Competition

In the travel industry, as in other industries, there are large national chains, small home-based businesses, providers on the internet, etc. Membership numbers of travel-related associations give some indication of participants in this industry.

The Kenyan Association of travel organization (KATO) reports 500 members in Kenya, most of which are small businesses. In addition, there are many agencies not affiliated with these associations but with one or more of the approximately 30 industry associations in competition in the country. Kenya Safaris and Tours have approximately 15 travel-industry associations in the country. Kenya Safaris and Tours have approximately 30 immediate competitors in the UK the main direct competitors in UK include:

Thomas Cook: A German based in major towns in the UK, Thomas Cook is the most well- known and popular travel agency in the world. The company has provided safaris travel packages over the years and has successful integrated travel agency services and safari travel activities. This offers the company complete control over the entire packages. Thomas cook have the advantages of an established reputation, high-quality trips, economies of scale, and strategic alliances. However, their packages are expensive and appeal primarily to a high-income clients; they also rely on agencies in Kenya to provide services on their behalf unlike the Kenya safaris and Tours which deals directly with its clients

Kuoni travel: The Swiss firm is traditional agency and has been in the business for more than ten years. They have gradually expanded towards becoming a holiday travel specialists even though it offers holidays in 634 countries. Kuoni‘s strengths are experience, reputation, and financial stability. Weakness may include high personnel, fixed dates and lack of a clear plan for future growth.

Samoik safaris: was established in 1980 as a successfully Kenya safari specialists. The company is Kenya- own based in the United States of America. Samoik has positioned itself through successful marketing communications especially through the use of social media and management combined with high-level services. However, the company has added other countries to its destinations which means Kenya Safaris and Tours is the only travel agency offering safari packages to Kenya destinations alone in the UK markets

6.3.4 Services

Kenya safaris and Tours is a full-service agency and sell standard travel agency goods and services, including airfare and travel packages. Additional include assistant with Visas. Providing access latest technology equipments and supplies, and superior offering that includes access to better than average activities, accommodation, and entrainments. The value added for Kenya Safaris and Tours offering is its knowledge and expertise, competitive rates, and specialty focus on adventure travel, which translate into increased satisfaction for the customers

6.3.5 Kenya Safaris and Tours keys to success

For Kenya Safaris and Tours to operate successfully the company has to effectively segment the UK safari travel market and other safari travelers, successfully position Kenya safari and Tours as Kenya specialists in the UK, communicate the differentiation and quality of the company offering through personal interaction and media and develop a repeat-business of loyal customers

6.3.6 Kenya Safaris and Tours critical issues

For Kenya Safaris and Tours to operate successfully the company needs market growth projections for the Kenyan tourist industry and for Safaris travel to be accurate, national economic conditions which are favorable to the travel industry, should not experience decline in the next five years, international conditions remains favorable for services providers and the company should be capable to produce effective , targeted communications that promote the benefits and adventure travel and Kenya safaris and Tours specialty and focus.

7 MARKET ANALYSIS AND STRATEGIES

7.1 Marketing strategy

From the research, Kenya Safaris and Tours’ goal of the business is to create and keep customers. The company’s marketing strategy will reflect this goal as its builds its reputation in the UK region. Though Kenya Safaris and Tours operate in the travel industry, it will provide much more than travel. Company’s customers are thought to spend 50 weeks of the year in an office. Kenya Safaris and Tours offers people the ability to go for holidays and remember how much they love the challenge and excitement of a safari. Kenya Safaris and Tours will promote the benefits and safari travel. These benefits include excitement, personal experience and lots of fun. Kenya Safaris and Tours will also promote the benefits of its services. These benefits include saving time and money, and confidence in successful vacation.

Kenya Safaris and Tours is a travel agency that specializes in Kenya safari travel. The company provides consulting and customized travel arrangements and packages. Kenya Safaris and Tours mission is to become the foremost provider of Kenya safari travel packages to the people of United Kingdom. Company employees and owner are safari enthusiasts, as well as safari travel-industry professionals. Kenya Safaris and Tours seeks to connect Kenya safari travel newcomers and veterans with services providers, adventure activities, and accommodation that match the client’s desires and budget level.

7.1.1 Marketing objectives

Kenya safaris and Tours marketing plan hope to achieve an, annual growth rate of at least 10%, promote Kenyan safaris travel activities through strategic alliance with hotel, department of Kenya tourism board, and other foreign own travel agencies, archived 45% of sales through the internet thus becoming the market leader of safari travel provider in the UK region.

7.1.2 Target market

Target market involves targeting one segment with one marketing mix. It helps the organization understand one segment of customers rather than spending organization resources across multiple marketing activities for multiple segments. From the research, Kenya Safari’s and Tours aim to target the following groups:

Couples and individuals safaris adventure travelers: This is the customers group that meets the demographic profile for safari travelers. They are age 25-35 married and with household income greater than $ 40,000.
Group’s adventure travelers: These are groups that belong to some travel organizations and always as a group to different destinations.
Corporate adventure travelers: Kenya Safaris and Tours will target UK business in an attempt to secure corporate accounts

Kenya Safaris and Tours should plan to focus its initials efforts on the safari travel market in the UK regions. As Kenya Safaris and Tours grow, market efforts can be expanded to other markets. The major purchasers that match Kenya Safaris and Tours target market are located in urban areas within big UK cities.

7.1.3 Positioning

Positioning helps create a compressively distinctive position for a service in the minds of targeted customers. For individuals and corporate clients who wish to participate in safari travel, Kenya Safaris and Tours should be positioned as the premier safari travel agency in the UK regions. Kenya Safaris and Tours experience with enthusiasm for safari adventure travel should be displayed in the exceptional services, value, and advice it provides for the customer. It is however that the company understands that positioning is a decision to; make frequently since markets and customers are not always the same and the company must be prepared to reposition its services if necessary for desirability and deliverability

7.1.4 Market mix

Kenya Safaris and Tours must allocate the promotion budget over to the five promotion tools: advertising, sales promotion, public relations, sales force and direct marketing. It is however important to note an organization, can spend more on some promotion tools if is perceived that the specified promotion tools will have a major impact compared to other promotion tools.

Kenya Safaris and Tours should employ a wider advertising communications and promotion to achieve its marketing goals. Research on the demographics of Kenya Safaris and tours target market suggest that the most effective communication will be come through advertising in several specialty publications and via local media. In addition, direct interaction or promotion at shopping malls, Exhibitions and other should be part of the company’s marketing mix.

Kenya Safaris and Tours sell travel agency goods and services including airfare and travel packages. Additional services will include assistance with tourist visas applications to Kenya, providing access to latest technology equipment and supplies, and a superior offering that includes access to better than average safaris activities, accommodations, and entrainment. The value added of Kenya Safaris and Tours offering is its knowledge and expertise, completive rates, and specialty focus on Kenya safari adventure travel, will mean increased assurance and satisfaction for the customer. The company’s initiative to focus on Kenya safaris adventure travel was made because economic indicators suggest that an increased demand for Kenya n safaris adventure travel services exists. The UK region does not have solely Kenyan safari adventure travel specialists, and members of the company team are experienced and enthusiastic about safari adventure travel activities. It is hoped that this enthusiasm will be communicated to the customers and Kenya Safaris and Tours experience will result to satisfaction and repeat business.

The concept of integrated marketing communication suggests that a company has to blend the promotion tools carefully into a coordinated promotion mix. Companies within the same industry differ greatly in the design of their promotion mixes. Organizations mainly use promotion strategy to communicate with their customers and other stakeholders. During Kenya safaris and Tours first year of operation, the company will hold and opening events and organize several programmer. At the opening event the company will provide with literature information about trips and activities. Negotiations with Kenyan department of tourism and hotel in Kenya have begun and additional promotion will likely occur through these strategic alliances. Specialty rather than national publication should serve as media vehicles for Kenya Safaris and Tours advertising. Local radio station could also be used for promotion purpose. Personal selling could also occur, through telemarketing should be avoided. Kenya Safaris and Tours plans to occasionally station personnel in location around UK and other parts, such shopping malls. The organization’s goal is to develop personal familiarity between its employees and the community.

7.2 Kenya Safari and Tours analysis on the use of social media

The company’s results on the use of social media from different aspects as mentioned and analyzed below.

7.2.1 Social media for Kenya Safari and Tours

According to the research answers, applying social media is quite a new thing for the tourism enterprises in their business. Most of these tourism enterprises include only one to three persons taking all of business operations. Therefore, new ways of marketing might be a challenge for them. Knowledge, time and capability to use social media are factors should be taken into account. In addition, the use of social media in tourism businesses depends on firm‘s target group which is one of the most important elements in marketing.

The research went further by stating that social media can accomplish the traditional marketing. Nowadays more and more people found information on internet and decided to book a hotel after reading many complimentary comments about it for example. Therefore, social media reaches the customers faster and targeted. The results obtained suggested three social media sites for the Kenya Safari and Tours and these are Facebook, YouTube and Twitter

Furthermore, in a new era of online communication social media has influenced on consumer behaviour. They are empowered more than ever in making purchasing decisions. Social media let people speak out loud their thoughts on something they had interacted with. They turn out to find social content from social media outlets to plan of their travel.

Consumers increasingly read feedback of other travellers and compare the prices of service offering because they felt trustworthy of the peer‘s opinions. This changes significantly way of business. It means when your company receiving a lot of negative feedback on social media site, then you sure losing your customers.

7.2.2 Advantages and disadvantages

Applying social media in business particularly in tourism enterprises does bring advantages and disadvantages in use.

From the research it shows that if the tourism business has the knowledge and capability of using social media; it will give a cheap way of marketing especially for current and topical things such as offers, events and packages

It also shows that social media is very fast in reaching customers with large scale of influence. If a company can realize influencers within the online community and stimulate them to brag about the company‘s brand then it will certainly earn attention from the customers.

Customer service is mentioned as an advantage of social media. It is very easy to interact with customers through social networking site. Whenever they raise a complaint about your company, you will get back to comfort your customers at anytime without geographical obstacle.

The feedback also shows that social media helps in finding out who are leading in the market through their comments on these social platforms. Understanding of competitors can be also examined. Moreover, it is useful to predict the trend of customers on what they like and what they expect from the company.

After finding out the advantages of social media it is important also to note its drawbacks. Social media are considered effective in approaching customers and spreading information really fast with huge impact. It is one of its advantages but also its disadvantage. If bunch of negative comments arrive to the company‘s social media site or any misrepresentation is spreading very fast which will definitely ruin the company‘s image and getting out of control. Because of that, keeping track on customers is required to be implemented. However, it is considered as time-consuming and the results of marketing through social media do not come out after one or two days but taking months or even years. The research also stated that when a tourism company considers using social media as their marketing strategy, should improve skills of staff.

7.2.3 Social media target customers for Kenya Safari and Tours

The research also establishes to find out the target customers that the tourism business can reach through social media and it shows that customers‘age is very important thing. Younger and middle-aged people use information technology, not older people. However, target customers are determined depending on what the company is selling. If you are selling group packages for senior citizens, I think that social media is not the best way for marketing.

7.2.4 Social media site for Kenya Safari and Tours

A company profile is evaluated as one of most important attributes. The information providing on social media sites helps to increase more selling. From the interviews different opinions were obtained on how tourism company‘s profile on social media sites should have in order to attract visitors and to get higher engagement from them. The responses from the interviews were dominated by two following suggestions:

In the company‘s social media site, it should especially have current and topical news and offers. Up-to-date information is welcomed by travelers because it plays as information sources for their traveling plan.

Besides that, packaging is one of the major option and agreat way to drive attention of customers towards the company‘s social media site. Packaging is a concept of services and accommodation combination. For example, the company offers a sale of holiday tour including airfare and hotel accommodation without booking separately from different websites. This is also an effective way to get high possibility of reservation of target customers for those packaging services.

8. SOCIAL MEDIA SUGGESTIONS FOR KENYA SAFARIS AND TOURS

8.1 Determining an objective

In any business, a marketing objective plays an important role to outline what is to be accomplished by the company. Setting an objective is to determine an effective marketing strategy which in turn brings the best outcome.

Objectives of using social media might be to build awareness, to increase website visits, to increase ranking on search engine or to attract potential customers. According to analysis on other chapter, author suggest the objectives in the case of Kenya Safaris and Tours are improving the local residents’ awareness as well as people from other parts of Kenya, attracting a stable number of new customers and increasing website traffic. The reasons of setting those objectives are explained as following:

Majority of visitors coming for safaris are from local municipal and they form as visit groups.
In order to expand the image of Kenya safaris and Tours, taking care of visitors from different places is necessary to accomplish.
Getting new customers to raise the service‘s sales is important.

8.2 Appropriate social media tools for Kenya Safari and Tours

The primary research is shown under two different points of view of social media users and a tourism specialist. The responses of answerers had described the customers’ needs and expectations of social media use. Moreover, the expert recommendations helped to choose appropriate social media outlets for Kenya Safaris and Tours. Making sure to apply the right social media channels is a decisive factor because not all social media tools are suitable for all business lines, especially in the tourism sector.

The appropriate social media tools for Kenya Safari and Tours is shown in the table below. The list can be change according to the changes of marketing objective and marketing strategy at certain periods.

Social media channelDescription
FacebookA social networking site was founded in 2004. It allows people to keep up with friends, upload an unlimited number of photos, share links and videos. The site has more than 19 million members.
WikipediaWikipedia is a free encyclopedia that anyone can edit the content. The site attracts nearly 78 million visitors monthly as of January 2010. This site is recommended because it is one of the largest reference websites people come to search for information.
YoutubeYouTube is the world‘s most popular online video community

Table 4; List of social media tools for Kenya Safaris and Tours (Author’s own construction)

An online search on Google was conducted to research whether Kenya Safaris and Tours have its official profile or related-upload articles on the above social media channels. The results were shown that the company did have its profile on Facebook and other social media sites however very basic information was uploaded. The information of the company on Facebook site is copied the same as on other social media sites making no differences and attraction to the audiences. Consequently, the profile of the company should be improved on Facebook. Writing new related articles in Tripadvisor and uploading photos and videos are being considered as next steps for Kenya Safaris and Tours to consider

8.3 Attracting visitors and strengthening the social media objectives

More fanpage or higher rate of visitors to the social media sites of Kenya Safaris and Tours means more people are being attracted by the company. It thereby helps to raise the traveller‘s awareness of Kenya Safaris and Tours.

The content on social media sites is requisite for its site traffic increase. From the received answers of the interview, many opinions are given. The visitors of the Safaris are expected to see travelling tips and lots of photos besides basic information. In addition, the social media site of the company should not have old photography and exaggerated text but being a space in which people can freely talk about what they think of Kenya Safaris and Tours or even anything about travelling experiences of them.

The author opinion, Kenya Safaris and Tours should provide on its official Facebook of online virtual tour which give a lively insight into the Safaris and attract new visitors.

Strengthening the social engagement of people on the social media sites of the Safaris can be accomplished through different ways. On Facebook, Kenya Safaris and Tours may increase the contribution of the visitors by organizing a contest for unprofessional photographers, for instance, with the Safaris-related themes. This not only satisfies members on Facebook with such good photographs but also gives chances for people getting to know about Kenya Safaris and Tours. Kenya Safaris and Tours should also create its account on Flickr and upload those received photographs on the site, and direct the link to other social media sites.

Effectively social media is a new way of marketing for tourism companies. However, it is unable to deny that traditional still plays a very important role in marketing strategy of a business. Therefore, even making the presence on social media site but Kenya Safaris and Tours should use the local networks to connect with people around has this will also helps to promote the company’s safaris package and also the Kenya Safaris and Tours should make sure that all the infrastructure leading to all safaris places are in good condition as this will also raise the number of people going for safaris.

CONCLUSIONS

Social media has become a platform that is easily accessible to anyone with internet access. Increased communication for organizations fosters brand awareness and better customer service and therefore the aim of this thesis was to find out the importance of using social media in marketing tourism.

It is also to address the opportunities for Kenya Safaris and Tours in Kenya for applying social media in order to achieve its business goals. The research question was, therefore to find out how tourism companies are integrating social media into marketing so as to boost awareness and generate excitement about tourism destination.

The use of social media in advertising Kenya Safari and Tours boost awareness and generate tourism destination to various safari visitors. Social media is made up with various platforms of social media submission sites, media sharing sites, forums and discussion sites, review and rating sites, social networking sites, blogs, podcasts, micro-blogging and wikis. All this social media platforms contribute a lot in marketing tourism business as well as boosting awareness about various destinations that the company offers.

Rapidly growing social media have influenced the online consumer behavior. Particularly in tourism, travelers are on their own initiative when coming to information searching and purchase decision-making. In the general view of tourism business, social media is being embraced in relating to marketing and service, consist of identifying and attracting new customers, increasing brand awareness and connecting with customers.

The qualitative research showed the users of social media have not understood these social media channels very well and still restrictive in the use of social media for tourism purposes. The most familiar tool is social networking site Facebook. Some others were mentioned such as Wikipedia, YouTube, and Twitter.

The thesis comes to the conclusion that the use of social media in tourism businesses, especially in tourism sector encompassing both advantages and disadvantages. The target customers of social media outlets are determined depending on what kinds of services the tourism companies are offering. However, the young people are considered as the main users of social media channels while old people hesitate to try new technology.

When applying social media in marketing Kenya Safaris and Tours there are some recommendations should be considered. Firstly, there has to be setting up an objective for Kenya Safaris and Tours what it wants to receive from social media. The objective might consist of increasing the local awareness, attracting new customers and improving Kenya Safaris and Tours official website traffic.

To benefit the social media outlets with positive return Kenya Safari and Tours should also attract more visitors to its social media sites and stimulate their engagement by posting up-to-date information or organizing any online activities for customers and finally the writing of this thesis work was a great learning experience for the author a lot of knowledge concerning the concept of using social media in marketing tourism was acquired while writing the thesis.

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Free Essays

The Treatment of Somali Refugees in Kenya and Ethiopia: an Assessment

1. Introduction

1.1 Background

After the end of the Cold War, the international community had to build an entirely new agenda for human rights, democracy and development in the world’s most troubled regions (Forsythe, 2006: 210-215; Normand & Zaidi, 2008: 316-323).
In Africa, conflicts in the Congo, Rwanda and Somalia left the region tormented by an ongoing refugee crisis. The lack of stable political institutions and representative democracy in these countries necessitated the revision of international legal standards, in order to cope with the refugee crisis and to provide security and shelter.
With over 3 million recognized refugees at present, Africa is considered by the UNHCR the biggest challenge, absorbing the largest proportion of the budget and humanitarian programmes (Zolberg et. al, 1989). This paper will focus on the treatment of Somali refugees in two of the neighbouring countries – Kenya and Ethiopia, which reportedly host the largest proportion of the refugees at present (UNHCR, 2011a;b;c). The reason why Somali refugees were chosen as the subject of this paper is because this is one of the longest ongoing political and humanitarian crises, and its implications upon regional politics and the local populations are perpetual. It also demonstrates the discrepancies in international law in dealing with displacement and human right violations of the Somali refugees. The paper will assess the treatment of refugees in these two countries. Based on this assessment, the author will make recommendations for the improvement of the treatment of the refugees.

1.2 Research question

The purpose of this essay is to explore the treatment of Somali refugees in Kenya and Ethiopia. Their treatment will be looked at through the prism of basic human rights conventions and will ideally seek to provide a broader understanding on the status of the refugees in a global era. It will highlight the main challenges, which refugees from Somalia face on the territories of Kenya and Ethiopia and will explain how these challenges are posed by inconsistencies in international law.
In order to do this, the author will first critically approach the definition of the term “refugee”. Next, the author will attempt to trace whether basic provisions stipulated by the 1951 Convention on the Status of the Refugees have been met by the authorities in Ethiopia and Kenya. Before this, a brief historical overview of the main events leading to the refugee crisis will be provided.

2. The Somali refugee crisis – the prelude

In Somalia, the transition to political independence has been scarred by factionalism and division. In the early 1990s, the clan based opposition groups ousted the military government, which led to the outbreak of decade long civil war, throughout which various factions were competing for power (Waldron & Hasci, 1994). In 2004, the Transitional Federal Government (TFG) was formed. Its opposing faction was the Islamic Courts Union (ICU), which soon lost power to the TFG in the south. Subsequently, the TFG split into radical groups, Al-Shabaab being one of them. Since then, the Al-Shabaab has been fighting the TFG over political and economic supremacy (UNHCR, 2011c).
The civil war resulted in the displacement of millions of Somali people, turning them into the third largest refugee group in the world, after the Iraq and Afghanistan refugees (UNHCR, 2011c). Apart from Western countries such as UK and Italy, Somali refugees travel to neighbouring countries, mostly Ethiopia and Kenya. As of July 2011, on the territory of Ethiopia there were 160,000 Somali refugees, residing in six large camps in the eastern and south-eastern part of the country. In 2011 the number of new arrivals increased dramatically with up to 23,000 people arriving per month. In Kenya, currently there are around 280,000 Somali refugees, and as of July 2011, their number has dramatically increased because of the draught in East Africa (UNHCR, 2011b).

3. Problems of definition

The purposes if this essay would not be fulfilled, if the author does not provide a definition of the term “refugee”.
According to Article 1 (2) of the 1951 UNHCR Convention on the Status of the Refugees, the term “refugee” shall apply to any person who: “[…]owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable, or owing to such fear, is unwilling to avail himself of the protection of that country […]” (UNHCR, 1951). The same definition can be found in the OAU 1969 Convention on the Refugees in Africa (Article 1).
The main criticism, which this definition obviously provokes, is the lack of prescriptions for the state of origin, and the obligations of the host countries. The definition exhausts the basic connotation of a refugee, which has not changed much to this day, but does not define the responsibilities and actions, which the host authorities are obliged to take under international law. The definition explains the confines of the country of persecution, but not the terms of protection of refugees in foreign territories. This is not a technical flaw of the definition, as embedded in the convention, but a general weakness of international law, when it comes to the treatment of refugees in host countries (Marfleet, 2006; 9-20; Gibney, 2005:6-13).
This raises several issues related to legitimacy, and they are not, as proposed by Zolberg et.al (1989) related to the debate who is a refugee under international law. These controversies are related to the lack of legally binding prescriptions for the host countries, sheltering refugees. Despite the fact that there has been ongoing development of the understanding of the term persecution since 1951, it remains unclear how persecution of refugees can be prevented in the host territories. Therefore, it is important to trace the implications of this inconsistency in terms of policy and treatment of the Somali refuges in Ethiopia and Kenya and identify problems, which might arise from the lack of a clear definition of persecution and the responsibilities of the host countries. The following sections will demonstrate the practical implications of this gap in international law in relation to the treatment of Somali refugees in Kenya and Ethiopia.

4. Treatment of Somali refugees in Kenya

According to the UNHCR, more than 600, 000 Somali refugees are now residing in neighbouring countries (2011). At present, Kenya is the country, where largest proportions of the Somali refugees are seeking shelter. Currently, it is hosting around 280 000 refugees, residing in three large camps, located in the North Eastern Daabab camps (UNHCR, 2011b).
Although it is clear that Kenya has been unable to cope with the intense wave of Somali immigrants without the assistance of the international community, in 2010, Amnesty International has reported grieve violations of rights of the refuges on behalf of the Kenyan authorities (Amnesty International Report AFR 32/015, 2010). The report says that thousands of refugees were forcibly returned to Somalia, and asylum was not provided to the individuals which claimed for it. The report also reveals the implications of the fact that a large proportion of the refugees were not screened because of the closure of the immigration centre at the Kenya-Somali border. It was closed because Kenyan authorities were concerned that ongoing violence in Somalia and persistent acts of terrorism could spread on their own territory (Amnesty International Report AFR 32/015, 2010). The other conclusions of Amnesty International are related to police harassment in the camps, and violation of the principle of non-refoulement (Amnesty International Report AFR 32/015, 2010). The principle of non-refoulement, which is embedded in the UNHCR Convention for the Refugees prohibits “the expulsion, extradition, deportation, return or otherwise removal of any person in any manner whatsoever to a country or territory where he or she would face a real risk of persecution or serious harm” (UNHCR Convention on the Status of the Refugees, 1951).
The report reveals that when the Kenyan authorities closed the border, around 4000 Somalis were trapped alongside and 360 were refouled. In 2009, 93 Somali asylum seekers were forcibly refouled back to Somalia. It is now clear that by choosing to close its border, Kenya has violated the principle of non-refoulement of the UN and the 1967 Protocol, as well as its own 2006 Refugee Act. Further implications of the closure of the transit border centre is that the newly arrived refugees are no longer screened for health purposes, and some of them have suffered exhaustion and malnutrition on their way to the camps (which are located about 80 km from the border).
Another type of violations is related to the security and well being of the refugees, often threatened by the Kenyan security forces. As of December 2010, issues related to limited access to water, shelter, sanitation and other essential services due to overcrowding have been reported. In addition, the refugees are not allowed outside the camps unless in exceptional circumstances such as relocation to third countries (Amnesty International, 2010). Other violations include sexual harassment, forced marriages in the camps, as well as the involuntary recruitment of refugees for military service. Based on this report, it is not difficult to determine that Kenyan authorities have allowed the unlawful treatment of Somali refugees by local militias, and have committed violations related to their treatment on the territory of the host country.
In sum, a closer look at the treatment of the Somali refugees in Kenya reveals that there have been violations of key provisions, related to the status of the refugees. From a legal perspective, this is due to the fact that there are no legally binding provisions, which define the responsibilities of the host countries, or penalties in case of violations. By no legally binding it is meant that the existing rules and regulations remain prescriptive of how the hosting countries need to treat refugees, seeking shelter on their territory. As stated earlier before, there is not a clear definition of persecution and the counter-measures, which it entails, therefore the actions of the Kenyan authorities remain unaddressed under international law. As the next section will reveal, the situation in Ethiopia is quite similar.

5. Treatment of Somali refugees in Ethiopia

As mentioned earlier in the essay, Ethiopia is the country, where the second highest proportion of Somali refugees resides. An estimate of 280, 000 refugees have fled to Ethiopia since the beginning of the conflict in Somalia more than two decades ago. They have been accommodated in eight camps along the Ethio-Somali border (UNHCR, 2011). Similarly to the case in Kenya, the refugees are denied access to education and work opportunities, as well as free movement and access to healthcare. According to Markos (2011), the main reasons for the unlawful treatment of the Somali refugees in Ethiopia generate from the gap between national legislation and international legal standards, related to the status of the refugees. Despite the fact that Ethiopia has ratified key international refugee instruments such as the 1951 Convention, the 1967 Protocol and the 1969 OAU Convention, the treatment of the Somali refugees on the territory of the country is a signifier that constraints to the implementation of their provision on national level are ostensible.
Understandably, the Ethiopian authorities are trying to protect their scarce national resources and infrastructure, which explains why their tolerance to the refugee influx is not high (Waldron & Hasci, 1994). From the perspective of the international community however, this does not ameliorate the fact that many Somalis face grieve human rights violations in the camps on the territory of Ethiopia. Some of the key provisions of the 1951 Convention have been violated such as the right of freedom, the right to choose their place of residence, the right to move freely within the country, as well as the access to elementary and religious education.
In sum, although the situation with the treatment of the refugees in Ethiopia is not so grieve as the one in Kenya, Somali refugees in Ethiopia still face deprivations and human right violations. This is due to the scarce resources in the country, as well as the gaps in national legislation, which do not allow the direct implementation of key provisions of international law, related to the status of the refugees.
Based on the above observations on the treatment of the refugees in these two countries, a brief set of recommendations will be provided in the following section.

6. Recommendations

This section will provide a brief set of recommendations for policy reform and action for the improvement of the treatment of Somali refugees in Kenya and Ethiopia. The recommendations have been divided in four groups – general recommendations, recommendations for Kenya, recommendations for Ethiopia, and recommendations for the international community.

6.1 General recommendations

The previous sections have shown that without clear definition on persecution and the responsibilities of the host countries, it would be impossible to provide shield of refugees and displaced people under international law. Therefore, a revision of the legal provisions related with the refugees is necessary. In the near future however, a revision of existing refugee legislation might be a cumbersome and formidable process, because it would involve redrafting existing legislation, its ratification and its incorporation into host countries’ judiciary system. In addition, it is not clear how this would help overcome other challenges, related to refugee protection, such as the ones mentioned by Landgren (1998) – agents of persecution; the notion of political offence in extradition treaties; the criminalization of illegal departure; and the precipitation of repatriation. Despite the fact that the principle of non-refoulment remains one of the strongest refugee rights, and despite the presence of “minimum rights clauses” for the treatment of refugees in the 1951 Convention, their enforcement in countries, where poverty and political instability are persistent, remains a challenge. As a result, existing legislation needs to be revised in order to meet the new security threats, raised by globalization and the incapacity of many states to protect their own civilian populations. At present, the definition of the term refugee is problematic because it does not provide a clear direction of what responsibilities the host countries need to have. Therefore a revision of the definition, as well as existing legislation is necessary. As a result, the responsibilities of the host countries-signatories to the refugee instruments should be legally binding.

6.2 Recommendations for Kenya

The most important recommendation for the Kenyan authority is to open the border control camp which would facilitate the registration of the refugees, and the access of the newly arrived to healthcare, food and clean water. At present Kenyan authorities are concerned that if the border is open, this might provide access to Kenya of the militant members of Al-Shabaab, which is a major security threat for the civilian population (Daily Mail, 2011). However, a stronger border control and the allocation of additional police and military units, which would perform thorough checks on those wishing to cross the border, is a possible solution.
The most important recommendation for the Kenyan government in order to improve the situation with the refugees is to ensure that the security forces do not violate the principle of non-refoulement. This can take place if more international observers are allowed in the camps and on the Somali-Kenyan border.

6.3 Recommendations for Ethiopia

In Ethiopia, the revision of national legislation is crucial for the implementation of the international provisions, related with the rights of the refugees. In a country with feeble political and judiciary institutions, the process will be cumbersome, but legal revision is necessary in order to provide refugees and asylum-seekers protection.

6.4 Recommendations for the international community

As far as the actions of the international organisations, regional organisations and the donor countries are concerned, they need to be related with raising awareness of the situation, and stronger measures related to monitoring and accountability of the actions of the security forces on the territory of both countries. This means that institutions such as the UNHCR, and regional organisations such as OAU and ACHPR (African Commission on Human and Peoples’ Rights) need to play a more proactive role in liaising with local governments and observing the situation in countries like Kenya and Ethiopia. This can be implemented using two channels – a liaison with government agencies, and regular reports, provided by non-governmental organizations on the situation within the camps.
It is important that efforts for the protection of the refugees are made on all four of the above levels. Only the vertical harmonization of actions between national authorities and the international community, wrapped in an appropriate legal framework, can eventually lead to the creation of a safer environment for the Somali refugees, and the determination of their international status in the global era.

7. Conclusion

This paper has shown that despite the efforts of the international community, there are problems, related with the treatment of Somali refugees in Kenya and Ethiopia. The lack of commitment of the host countries, and the lack of coordination between national governments and international organisations have perpetuated the crisis. In order to fulfil its commitments for democratization and political stability on the African continent, the international community needs to revise key legal provisions relating to the status of the refugees, and to ensure that there are no constraints for their implementation on national level. In addition, the international status of the refugees needs to be determined, in order to give them legitimacy and protection in a global world.

Bibliography

Amnesty International (2010) “From life without peace to peace without life. The treatment of Somali Refugees and Asylum-seekers in Kenya”, 8 December, Index: AFR 32/015/2010, Available at: http://www.amnesty.org/en/library/asset/AFR32/015/2010/en/1eb8bd34-2a5c-4aa4-8814-83e0e8df8ebf/afr320152010en.pdf
Retrieved: 12.02.2012

Daily Mail (2011) “Somalian militants vow revenge suicide attacks after Kenyan army crosses border following kidnappings”, updated 17 October, 2011
Available at: http://www.dailymail.co.uk/news/article-2050240/Somalian-militant-group-Al-Shabab-threatens-Kenya-suicide-attacks.html
Retrieved: 15.04.2012

Forsythe, D. (2006) Human Rights in International Relations, Cambridge: Cambridge University Press

Gibney, M.J. (2005) The Ethics and Politics of Asylum. Liberal Democracy and the Response to Refugees, Cambridge: Cambridge University Press

OAU (1969) Convention Governing the Specific Aspects of Refugee Problems in Africa, Available at: http://www.africa-union.org/Official_documents/Treaties_%20Conventions_%20Protocols/Refugee_Convention.pdf
Retrieved 12.02.2012

Marfleet, P. (2006) Refugees in a Global Era, Basingstoke: Macmillian

Markos, K. (2011) The Treatment of Somali Refugees in Ethiopia under Ethiopian and International Law, International Journal of Refugee Law, Vol 9, Issue 3, p. 365-391.

Landgren, K. (1998) “The Future of Refugee Protection: Four Challenges”
Journal of Refugee Studies, Vol. 11, Issue 4, Pp. 416-432

Normand, R. & Zaidi, S. (2008) Human Rights at the UN: The Political History of Universal Justice, Indiana University Press

UNHCR (1951) Convention Relating to the Status of the Refugees, Resolution 2198, Adopted by the United Nations General Assembly
Available at: http://www.unhcr.org/3b66c2aa10.html
Retrieved 12.02.2012
UNHCR (1967) Protocol Relating to the Status of the Refugees, Resolution 2198, Adopted by the United Nations General Assembly
Available at: http://www.unhcr.org/3b66c2aa10.html
Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011a) “Ethiopia. 2012 UNHCR country operations profile – Ethiopia”, Available at: http://www.unhcr.org/cgi-bin/texis/vtx/page?page=49e483986
Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011b) “Kenya. 2012 UNHCR country operations profile – Kenya”
Available at: http://www.unhcr.org/cgibin/texis/vtx/page?page=49e483a16&submit=GO
Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011c) “Somalia. 2012 UNHCR country operations profile – Somalia”
Available at: http://www.unhcr.org/cgibin/texis/vtx/page?page=49e483ad6&submit=GO
Retrieved 12.02.2012

UNHCR (2011d) “The International Protection of Refugees: Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees”, Available at:
http://www.unhcr.org/refworld/pdfid/3b20a3914.pdf
Retrieved 12.02.2012

Waldron, S., Hasci, N. (1994)“Somali refugees in the Horn of Africa: state of the art literature review”, Report No.3, Refugee Studies Programme, Queen Elisabeth House, Oxford: Oxford University Press,

Zolberg, A., Zuhrke, A. & Aguayo, S. (1989) Escape from Violence. Conflict and Refugee Crisis in the Developing World. Oxford: Oxford University Press

Categories
Free Essays

The Treatment of Somali Refugees in Kenya and Ethiopia: an Assessment

Introduction

1.1 Background

After the end of the Cold War, the international community had to build an entirely new agenda for human rights, democracy and development in the world’s most troubled regions (Forsythe, 2006: 210-215; Normand & Zaidi, 2008: 316-323).

In Africa, conflicts in the Congo, Rwanda and Somalia left the region tormented by an ongoing refugee crisis. The lack of stable political institutions and representative democracy in these countries necessitated the revision of international legal standards, in order to cope with the refugee crisis and to provide security and shelter.

With over 3 million recognized refugees at present, Africa is considered by the UNHCR the biggest challenge, absorbing the largest proportion of the budget and humanitarian programmes (Zolberg et. al, 1989). This paper will focus on the treatment of Somali refugees in two of the neighbouring countries – Kenya and Ethiopia, which reportedly host the largest proportion of the refugees at present (UNHCR, 2011a;b;c). The reason why Somali refugees were chosen as the subject of this paper is because this is one of the longest ongoing political and humanitarian crises, and its implications upon regional politics and the local populations are perpetual. It also demonstrates the discrepancies in international law in dealing with displacement and human right violations of the Somali refugees. The paper will assess the treatment of refugees in these two countries. Based on this assessment, the author will make recommendations for the improvement of the treatment of the refugees.

1.2 Research question

The purpose of this essay is to explore the treatment of Somali refugees in Kenya and Ethiopia. Their treatment will be looked at through the prism of basic human rights conventions and will ideally seek to provide a broader understanding on the status of the refugees in a global era. It will highlight the main challenges, which refugees from Somalia face on the territories of Kenya and Ethiopia and will explain how these challenges are posed by inconsistencies in international law.

In order to do this, the author will first critically approach the definition of the term “refugee”. Next, the author will attempt to trace whether basic provisions stipulated by the 1951 Convention on the Status of the Refugees have been met by the authorities in Ethiopia and Kenya. Before this, a brief historical overview of the main events leading to the refugee crisis will be provided.

The Somali refugee crisis – the prelude

In Somalia, the transition to political independence has been scarred by factionalism and division. In the early 1990s, the clan based opposition groups ousted the military government, which led to the outbreak of decade long civil war, throughout which various factions were competing for power (Waldron & Hasci, 1994). In 2004, the Transitional Federal Government (TFG) was formed. Its opposing faction was the Islamic Courts Union (ICU), which soon lost power to the TFG in the south. Subsequently, the TFG split into radical groups, Al-Shabaab being one of them. Since then, the Al-Shabaab has been fighting the TFG over political and economic supremacy (UNHCR, 2011c).

The civil war resulted in the displacement of millions of Somali people, turning them into the third largest refugee group in the world, after the Iraq and Afghanistan refugees (UNHCR, 2011c). Apart from Western countries such as UK and Italy, Somali refugees travel to neighbouring countries, mostly Ethiopia and Kenya. As of July 2011, on the territory of Ethiopia there were 160,000 Somali refugees, residing in six large camps in the eastern and south-eastern part of the country. In 2011 the number of new arrivals increased dramatically with up to 23,000 people arriving per month. In Kenya, currently there are around 280,000 Somali refugees, and as of July 2011, their number has dramatically increased because of the draught in East Africa (UNHCR, 2011b).

3. Problems of definition

The purposes if this essay would not be fulfilled, if the author does not provide a definition of the term “refugee”.

According to Article 1 (2) of the 1951 UNHCR Convention on the Status of the Refugees, the term “refugee” shall apply to any person who: “[…]owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable, or owing to such fear, is unwilling to avail himself of the protection of that country […]” (UNHCR, 1951). The same definition can be found in the OAU 1969 Convention on the Refugees in Africa (Article 1).

The main criticism, which this definition obviously provokes, is the lack of prescriptions for the state of origin, and the obligations of the host countries. The definition exhausts the basic connotation of a refugee, which has not changed much to this day, but does not define the responsibilities and actions, which the host authorities are obliged to take under international law. The definition explains the confines of the country of persecution, but not the terms of protection of refugees in foreign territories. This is not a technical flaw of the definition, as embedded in the convention, but a general weakness of international law, when it comes to the treatment of refugees in host countries (Marfleet, 2006; 9-20; Gibney, 2005:6-13).

This raises several issues related to legitimacy, and they are not, as proposed by Zolberg et.al (1989) related to the debate who is a refugee under international law. These controversies are related to the lack of legally binding prescriptions for the host countries, sheltering refugees. Despite the fact that there has been ongoing development of the understanding of the term persecution since 1951, it remains unclear how persecution of refugees can be prevented in the host territories. Therefore, it is important to trace the implications of this inconsistency in terms of policy and treatment of the Somali refuges in Ethiopia and Kenya and identify problems, which might arise from the lack of a clear definition of persecution and the responsibilities of the host countries. The following sections will demonstrate the practical implications of this gap in international law in relation to the treatment of Somali refugees in Kenya and Ethiopia.

4. Treatment of Somali refugees in Kenya

According to the UNHCR, more than 600, 000 Somali refugees are now residing in neighbouring countries (2011). At present, Kenya is the country, where largest proportions of the Somali refugees are seeking shelter. Currently, it is hosting around 280 000 refugees, residing in three large camps, located in the North Eastern Daabab camps (UNHCR, 2011b).

Although it is clear that Kenya has been unable to cope with the intense wave of Somali immigrants without the assistance of the international community, in 2010, Amnesty International has reported grieve violations of rights of the refuges on behalf of the Kenyan authorities (Amnesty International Report AFR 32/015, 2010). The report says that thousands of refugees were forcibly returned to Somalia, and asylum was not provided to the individuals which claimed for it. The report also reveals the implications of the fact that a large proportion of the refugees were not screened because of the closure of the immigration centre at the Kenya-Somali border. It was closed because Kenyan authorities were concerned that ongoing violence in Somalia and persistent acts of terrorism could spread on their own territory (Amnesty International Report AFR 32/015, 2010). The other conclusions of Amnesty International are related to police harassment in the camps, and violation of the principle of non-refoulement (Amnesty International Report AFR 32/015, 2010). The principle of non-refoulement, which is embedded in the UNHCR Convention for the Refugees prohibits “the expulsion, extradition, deportation, return or otherwise removal of any person in any manner whatsoever to a country or territory where he or she would face a real risk of persecution or serious harm” (UNHCR Convention on the Status of the Refugees, 1951).

The report reveals that when the Kenyan authorities closed the border, around 4000 Somalis were trapped alongside and 360 were refouled. In 2009, 93 Somali asylum seekers were forcibly refouled back to Somalia. It is now clear that by choosing to close its border, Kenya has violated the principle of non-refoulement of the UN and the 1967 Protocol, as well as its own 2006 Refugee Act. Further implications of the closure of the transit border centre is that the newly arrived refugees are no longer screened for health purposes, and some of them have suffered exhaustion and malnutrition on their way to the camps (which are located about 80 km from the border).

Another type of violations is related to the security and well being of the refugees, often threatened by the Kenyan security forces. As of December 2010, issues related to limited access to water, shelter, sanitation and other essential services due to overcrowding have been reported. In addition, the refugees are not allowed outside the camps unless in exceptional circumstances such as relocation to third countries (Amnesty International, 2010). Other violations include sexual harassment, forced marriages in the camps, as well as the involuntary recruitment of refugees for military service. Based on this report, it is not difficult to determine that Kenyan authorities have allowed the unlawful treatment of Somali refugees by local militias, and have committed violations related to their treatment on the territory of the host country.

In sum, a closer look at the treatment of the Somali refugees in Kenya reveals that there have been violations of key provisions, related to the status of the refugees. From a legal perspective, this is due to the fact that there are no legally binding provisions, which define the responsibilities of the host countries, or penalties in case of violations. By no legally binding it is meant that the existing rules and regulations remain prescriptive of how the hosting countries need to treat refugees, seeking shelter on their territory. As stated earlier before, there is not a clear definition of persecution and the counter-measures, which it entails, therefore the actions of the Kenyan authorities remain unaddressed under international law. As the next section will reveal, the situation in Ethiopia is quite similar.

5. Treatment of Somali refugees in Ethiopia

As mentioned earlier in the essay, Ethiopia is the country, where the second highest proportion of Somali refugees resides. An estimate of 280, 000 refugees have fled to Ethiopia since the beginning of the conflict in Somalia more than two decades ago. They have been accommodated in eight camps along the Ethio-Somali border (UNHCR, 2011). Similarly to the case in Kenya, the refugees are denied access to education and work opportunities, as well as free movement and access to healthcare. According to Markos (2011), the main reasons for the unlawful treatment of the Somali refugees in Ethiopia generate from the gap between national legislation and international legal standards, related to the status of the refugees. Despite the fact that Ethiopia has ratified key international refugee instruments such as the 1951 Convention, the 1967 Protocol and the 1969 OAU Convention, the treatment of the Somali refugees on the territory of the country is a signifier that constraints to the implementation of their provision on national level are ostensible.

Understandably, the Ethiopian authorities are trying to protect their scarce national resources and infrastructure, which explains why their tolerance to the refugee influx is not high (Waldron & Hasci, 1994). From the perspective of the international community however, this does not ameliorate the fact that many Somalis face grieve human rights violations in the camps on the territory of Ethiopia. Some of the key provisions of the 1951 Convention have been violated such as the right of freedom, the right to choose their place of residence, the right to move freely within the country, as well as the access to elementary and religious education.

In sum, although the situation with the treatment of the refugees in Ethiopia is not so grieve as the one in Kenya, Somali refugees in Ethiopia still face deprivations and human right violations. This is due to the scarce resources in the country, as well as the gaps in national legislation, which do not allow the direct implementation of key provisions of international law, related to the status of the refugees.

Based on the above observations on the treatment of the refugees in these two countries, a brief set of recommendations will be provided in the following section.

6. Recommendations

This section will provide a brief set of recommendations for policy reform and action for the improvement of the treatment of Somali refugees in Kenya and Ethiopia. The recommendations have been divided in four groups – general recommendations, recommendations for Kenya, recommendations for Ethiopia, and recommendations for the international community.

6.1 General recommendations

The previous sections have shown that without clear definition on persecution and the responsibilities of the host countries, it would be impossible to provide shield of refugees and displaced people under international law. Therefore, a revision of the legal provisions related with the refugees is necessary. In the near future however, a revision of existing refugee legislation might be a cumbersome and formidable process, because it would involve redrafting existing legislation, its ratification and its incorporation into host countries’ judiciary system. In addition, it is not clear how this would help overcome other challenges, related to refugee protection, such as the ones mentioned by Landgren (1998) – agents of persecution; the notion of political offence in extradition treaties; the criminalization of illegal departure; and the precipitation of repatriation. Despite the fact that the principle of non-refoulment remains one of the strongest refugee rights, and despite the presence of “minimum rights clauses” for the treatment of refugees in the 1951 Convention, their enforcement in countries, where poverty and political instability are persistent, remains a challenge. As a result, existing legislation needs to be revised in order to meet the new security threats, raised by globalization and the incapacity of many states to protect their own civilian populations. At present, the definition of the term refugee is problematic because it does not provide a clear direction of what responsibilities the host countries need to have. Therefore a revision of the definition, as well as existing legislation is necessary. As a result, the responsibilities of the host countries-signatories to the refugee instruments should be legally binding.

6.2 Recommendations for Kenya

The most important recommendation for the Kenyan authority is to open the border control camp which would facilitate the registration of the refugees, and the access of the newly arrived to healthcare, food and clean water. At present Kenyan authorities are concerned that if the border is open, this might provide access to Kenya of the militant members of Al-Shabaab, which is a major security threat for the civilian population (Daily Mail, 2011). However, a stronger border control and the allocation of additional police and military units, which would perform thorough checks on those wishing to cross the border, is a possible solution.

The most important recommendation for the Kenyan government in order to improve the situation with the refugees is to ensure that the security forces do not violate the principle of non-refoulement. This can take place if more international observers are allowed in the camps and on the Somali-Kenyan border.

6.3 Recommendations for Ethiopia

In Ethiopia, the revision of national legislation is crucial for the implementation of the international provisions, related with the rights of the refugees. In a country with feeble political and judiciary institutions, the process will be cumbersome, but legal revision is necessary in order to provide refugees and asylum-seekers protection.

6.4 Recommendations for the international community

As far as the actions of the international organisations, regional organisations and the donor countries are concerned, they need to be related with raising awareness of the situation, and stronger measures related to monitoring and accountability of the actions of the security forces on the territory of both countries. This means that institutions such as the UNHCR, and regional organisations such as OAU and ACHPR (African Commission on Human and Peoples’ Rights) need to play a more proactive role in liaising with local governments and observing the situation in countries like Kenya and Ethiopia. This can be implemented using two channels – a liaison with government agencies, and regular reports, provided by non-governmental organizations on the situation within the camps.

It is important that efforts for the protection of the refugees are made on all four of the above levels. Only the vertical harmonization of actions between national authorities and the international community, wrapped in an appropriate legal framework, can eventually lead to the creation of a safer environment for the Somali refugees, and the determination of their international status in the global era.

Conclusion

This paper has shown that despite the efforts of the international community, there are problems, related with the treatment of Somali refugees in Kenya and Ethiopia. The lack of commitment of the host countries, and the lack of coordination between national governments and international organisations have perpetuated the crisis. In order to fulfil its commitments for democratization and political stability on the African continent, the international community needs to revise key legal provisions relating to the status of the refugees, and to ensure that there are no constraints for their implementation on national level. In addition, the international status of the refugees needs to be determined, in order to give them legitimacy and protection in a global world.

Bibliography

Amnesty International (2010) “From life without peace to peace without life. The treatment of Somali Refugees and Asylum-seekers in Kenya”, 8 December, Index: AFR 32/015/2010, Available at: http://www.amnesty.org/en/library/asset/AFR32/015/2010/en/1eb8bd34-2a5c-4aa4-8814-83e0e8df8ebf/afr320152010en.pdf

Retrieved: 12.02.2012

Daily Mail (2011) “Somalian militants vow revenge suicide attacks after Kenyan army crosses border following kidnappings”, updated 17 October, 2011

Available at: http://www.dailymail.co.uk/news/article-2050240/Somalian-militant-group-Al-Shabab-threatens-Kenya-suicide-attacks.html

Retrieved: 15.04.2012

Forsythe, D. (2006) Human Rights in International Relations, Cambridge: Cambridge University Press

Gibney, M.J. (2005) The Ethics and Politics of Asylum. Liberal Democracy and the Response to Refugees, Cambridge: Cambridge University Press

OAU (1969) Convention Governing the Specific Aspects of Refugee Problems in Africa, Available at: http://www.africa-union.org/Official_documents/Treaties_%20Conventions_%20Protocols/Refugee_Convention.pdf

Retrieved 12.02.2012

Marfleet, P. (2006) Refugees in a Global Era, Basingstoke: Macmillian

Markos, K. (2011) The Treatment of Somali Refugees in Ethiopia under Ethiopian and International Law, International Journal of Refugee Law, Vol 9, Issue 3, p. 365-391.

Landgren, K. (1998) “The Future of Refugee Protection: Four Challenges”

Journal of Refugee Studies, Vol. 11, Issue 4, Pp. 416-432

Normand, R. & Zaidi, S. (2008) Human Rights at the UN: The Political History of Universal Justice, Indiana University Press

UNHCR (1951) Convention Relating to the Status of the Refugees, Resolution 2198, Adopted by the United Nations General Assembly

Available at: http://www.unhcr.org/3b66c2aa10.html

Retrieved 12.02.2012

UNHCR (1967) Protocol Relating to the Status of the Refugees, Resolution 2198, Adopted by the United Nations General Assembly

Available at: http://www.unhcr.org/3b66c2aa10.html

Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011a) “Ethiopia. 2012 UNHCR country operations profile – Ethiopia”, Available at: http://www.unhcr.org/cgi-bin/texis/vtx/page?page=49e483986

Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011b) “Kenya. 2012 UNHCR country operations profile – Kenya”

Available at: http://www.unhcr.org/cgibin/texis/vtx/page?page=49e483a16&submit=GO

Retrieved 12.02.2012

UNHCR, UN Refugee Agency (2011c) “Somalia. 2012 UNHCR country operations profile – Somalia”

Available at: http://www.unhcr.org/cgibin/texis/vtx/page?page=49e483ad6&submit=GO

Retrieved 12.02.2012

UNHCR (2011d) “The International Protection of Refugees: Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees”, Available at:

http://www.unhcr.org/refworld/pdfid/3b20a3914.pdf

Retrieved 12.02.2012

Waldron, S., Hasci, N. (1994)“Somali refugees in the Horn of Africa: state of the art literature review”, Report No.3, Refugee Studies Programme, Queen Elisabeth House, Oxford: Oxford University Press,

Zolberg, A., Zuhrke, A. & Aguayo, S. (1989) Escape from Violence. Conflict and Refugee Crisis in the Developing World. Oxford: Oxford University Press

Categories
Free Essays

A Comparative Analysis of Community-Based Tourism in Uganda and Kenya

1. Introduction

As pointed out by Tasciet al (2013), the contribution made by tourism to the growth of the economy can be enormous. Given the great potential of the tourism sector, several models have been developed over the past few years. Community-based tourism, developed in the 1990’s by authors including Pearce (1992) has been suggested to provide for sustainability in the industry (Beeton 2006). Community-based tourism (CBT) can be defined as a bottom-up approach that ensures the involvement of the local communities in the planning process (Koster 2007).
Given the potential of CBT, many rural areas are increasingly relying on tourism as an alternative to economic development, replacing their former reliance on forestry, mining and agriculture (Lopez-Guzman et al. 2011). Rural areas are considered important tourist destinations as they appeal to many tourists (Butler et al. 1998). This paper conducts a comparative analysis of community based tourism between Uganda and Kenya. The paper will first define the concept and then explore the demographics and history of tourism in Kenya and Uganda, and finally examine the socio-economic and environmental impacts. A comparative analysis will be done between the two countries by highlighting similarities and differences.
3. Community-Based Tourism Model: Overview
The notion of CBT can be traced back to the alternative approaches developed in the 1970s which were concerned with issues beyond the strictly economic (Tefler 2009). During this period, development in the tourism sector began to focus more on community-based initiatives and stressed more on the participation of the local individuals (Giampiccoli & Kalis 2012). The concept brought together issues of sustainability, local empowerment and self-reliance. CBT has come about due to the desire for a more inclusive approach to planning that incorporates local values (Koster 2007).
The concept of CBT has suffered from competing and ill-thought-out definitions. For example, Suansri (2003) and Ramsa & Mohd (2004) view CBT as a tourism venture wholly managed by the local communities. On the other hand, Scheyvens (2002) and Mearns (2003) are inclined to see it as involving a degree of participation or partnership with other stakeholders playing a part.

Perhaps the problem with defining the concept can be attributed to the fact that CBT may mean different things to different people. Despite debate over meanings, the CBT framework used in this paper is that initiated, planned, controlled, owned and managed by the local people with the aim of meeting the needs of the entire community. Private enterprises at the micro-level can be considered as part of the definition if the focus is on communal well-being rather than individual profit. The benefits should accrue to the local community and CBT should respect and preserve local culture.

2. Background to Tourism in Kenya and Uganda: Demographics, History, Socio-Economic Considerations and

Environmental Sustainability

Tourism plays an important role in Kenya, accounting for 10% of GDP and 9% of employment. It is also increasingly profitable with a 17.9% rise in earnings from the sector between 2009 and 2010 (Ndivo et al 2012). Amongst African countries, Kenya is currently ranked 5th for international tourist visits, with approximately 1.5 million international tourists in 2008 (Bunyere et al. 2009).
Because it has the potential to generate employment and prosperity, it has been given an increasingly important role in national socio-economic agendas, with a number of key policies and strategies created including the National Tourism Master Plan (Ministry of Tourism Kenya 2009), Tourism Policy (Government of Kenya 2010) and Tourism Bill 2005 (Ndivo et al 2012). Although there is potential to develop tourism around the country, historically interest has centred on the beaches of the south coast, national parks and game reserves (Ndivo et al 2012). According to a survey conducted by the EU, 63% of EU visitors in Kenya chose coastal areas as their tourist destination (Kibicho 2004). Wildlife is also a popular attraction, with70% of the tourism earnings in Kenya coming from wildlife-based tourism (Bunyere et al, 2009).
Given the critical importance of the tourism sector in Kenya, it is extremely vital to protect and conserve these significant resources. Indeed, conservation policies and collaborative schemes have been already been put in place. There is a large area of protected land, and 10% of Kenya’s land has been designated as national park and game reserve land (Akama et al., 2011). Critical biodiversity areas and the rich cultural coastal region form the flourishing tourism sector in Kenya.
Although measures to protect Kenya’s ecology have been put in place, there are concerns over sustainability, and the country continues to experience accelerated decline and destruction of critical biodiversity areas. There has been a decline in wildlife population in national parks and game reserves at rates similar to non-protected areas, indicating the state’s inability to protect critical biodiversity (Akama et al., 2011). Moreover, coastal tourism which has for decades dominated has experienced a rapid decline in the recent years owing to the tribal clashes that have erupted (Cheung 2012).
Kenya’s coastal tourism industry experienced a period of unprecedented dismal performance with 56% of the hotels closing in 2008 (Akama et al., 2011). Although much of the violence that occurred was tribal in nature, findings indicate that lack of community participation and involvement in tourism activities in the coast was a major factor contributing to these ethnic clashes. Had the local communities been involved in the tourism activities, such ethnic flare-ups would have been averted.
The ethnic flare-ups, land use conflict between local communities and wildlife managers, threats of extinction of species and the apparent inability of the state to protect critical biodiversity areas have led to a new realization of the importance of community based tourism in Kenya (Korir et al 2013). Considerable effort has now been made to provide support to CBT enterprises including donor funding. Further, a framework that gives impetus to successful and sustainable operations of CBT ventures has been linked into the overall national policy (Akama et al. 2011).
History of Ugandan tourism sector and socio-economic contributions
Tourism also has a role to play in the Ugandan economy. Similar to Kenya, main tourist products in Uganda are nature-based and are linked to wildlife game reserves, forest reserves and national parks. Other attractions include cultural heritage, community development, eco-tourism and faith-based tourism (Paul, 2004). The importance of involving the local communities in tourism activities is also evident in Uganda.
Conflicts between the locals and the government have largely been due to their lack of involvement in planning and development activities. For example, after the establishment of Bwindi Impenetrable National Park in 1992, conflicts arose between the locals and the park. The conflicts that led to the burning up of 5% of the park by the local community was evidence enough that the park would not be protected without consent and local support (Mujuni et al. 2003). A collaborative management plan was however set up which promoted participation of the locals in park management and revenue sharing. As a result, conflict ended and the locals committed themselves to protecting and preserving the park. The experience showed the importance of local community involvement in tourism activities.
Uganda used to be a key leader in tourism in the past. In the early, 1960s Uganda used to be the main tourism destination in East Africa(Frederic, 2011). However, the unprecedented turmoil of the 1970’s and early 80’s led to a decline in the tourism industry (Paul, 2004). As a result, Uganda lost its position as a top tourist destination in East Africa to Kenya. However, the government that took over in the mid 80’s restored peace and stability (frederic, 2011). Since then, the sector has been steadily increasing despite lagging behind Kenya in terms of its contribution to GDP.
Unlike in Kenya where tourism contributes around 10% of the GDP, Ugandan tourism industry is estimated to contribute 4% of the total GDP(Sanchez-Canizares, 2013). Nonetheless, there has been an increasing trend in tourism with the number of international tourist visits increasing from 468,000 in 2005 to over 940,000 in 2010 (Paul, 2004). Given that both countries are still developing, it is worthwhile to examine some of the similarities and differences between the two countries.
Comparative analysis of community based tourism between Kenya and Uganda
Similarities

Socio-economic impact

The two countries share certain things in common starting with the embracement and recognition of community based tourism as an important tool for reducing poverty. Both countries have embraced and given emphasis to development of community based tourism as an important tool for poverty reduction (Sanchez-Canizares, 2013). There are several community based tourism projects in both Kenya and Uganda. Some of the popular community based tourism projects in Kenya are: the Kimana Community Wildlife Sanctuary, Mwaluganje, Sera Conservancy and Kalacha Bandas in Marsabit among many other(Tang, 2013)
Similarly, Ugandan ministry of tourism has laid emphasis on the importance of community based tourism in the country. The idea of community based conservation has become the focus of the industry. Perhaps this has been driven by the recognition of the benefits of involving the local community in tourism development including: poverty reduction, decline in conflicts with the ministry over land used and reduced poaching activities (frederic, 2011)
Some of the successful community based projects in Uganda include Lake Nkuruba Nature Sanctuary, Buhoma Community Restcamp, Mgahinga Community Campground, Busingiro and Kaniyo Pabidi community project, Ruboni Community Campground and Bigodi Wetland Sanctuary(Zeppel, 2006). Participation of the locals in these projects is high. For example, in Bigodi Wetland Sanctuary, the local people are involved in community-guided walks and bird watching tours (Zeppel 2006). Both countries seem to be embracing community tourism as an important tool for reducing poverty.
Another similarity can be seen with the funding of these projects. Most of these projects are donor funded. Kenya is heavily reliant on donor funding. In fact, almost 100% of community based tourism development activities in Kenya is donor funded. For example, funds from USAID and World Bank were used to set up an electric fence around the Kimana Community Wildlife Sanctuary (Jonathan et al. 2013). Mwaluganje, another community based tourism development activity, was established through donor funding. Sera Conservancy that was formed to empower the local Samburu communities in Kenya was established with funds from USAID.
The EU has also played a major role in funding community based tourism development in Kenya. In 2000, a massive grant of 5.5 million Euros was released by the EU which saw the establishment of 16 community based tourism developments in Kenya (Ruhiu 2007). Other key players funding CBT in Kenya include international bodies such as the UNDP, conservation based NGOs such as AWF, Pact Kenya and WWF; and national agencies such as Kenya Wildlife Service (KWS) and Kenya Forest Research Institute (KEFRI) (Jonathan et al. 2013). It is clear that donor funding has played a major role in the development of community based tourism in Kenya. The government’s role has merely been the provision of an enabling environment such as security, programme coordination and policy formulation (Ruhiu 2007).
Similarly, Community Based Tourism Enterprises (CBTE’s) in Uganda rely predominantly on donor funding. The Mgahinga Bwindi community project was established with funds from the World BANK (Mujuni et al. 2003). Moreover, the two major associations Uganda Community Tourism Association (UCOTA) and (NACOBTA) in charge of promoting community based tourism in Uganda by providing loans and training to the local communities are predominantly donor funded. NACOBTA is 99% donor funded whereas UCOTA is 44.8% donor funded (Elisa et al., 2001) UCOTA empowers the local Ugandan communities to improve their livelihood through participating in sustainable tourism development activities. The association helps the local communities by aiding in the sale of handcrafts, providing accommodation, and tour guiding.

Furthermore, both countries have witnessed improved livelihoods due to community based tourism activities. For example, the Mgahinga Bwindi Community Project in Uganda has improved the livelihoods of the locals living around Bwindi Impenetrable National Park. Many of the local population living nearby have been employed as park rangers and ‘porters’ (labourers). The community has also benefited through improved infrastructure including roads, education and health facilities. About 60% of the Mgahinga Bwindi Impenetrable Forest Conservation Trust has been devoted towards development of local community projects (Adams & Infield 2013).

The local communities in Kenya have also benefited from employment and improved livelihoods. The locals living near Mwaluganje, Sera Conservancy and Kalacha Bandas in Marsabit have benefited from schools, clinics and boreholes which have been built by these projects (Ruhiu 2007). Further, pro-poor tourism have assisted women with bead making through provision of platform for selling their products.
Whilst these benefits are encouraging, participation of the locals in both countries is still far from enough. Although some of the locals have managed to secure jobs and improve their livelihoods, most of them are paid low salaries, an equivalent of 30 pounds per month (Ruhiu 2007). This certainly doesn’t really improve their livelihood that much. In fact, critics have argued that community based tourism and tourism in general should not necessarily be relied on as a tool for poverty alleviation. According to them, tourism does not compete well with sectors such as agriculture which have higher potential of reducing poverty.

Environment impact

Also, community based tourism in both countries have led to positive impacts on the environment. For example, in Uganda, KAFRED has created awareness among the local communities bordering wetlands about the importance of protecting and preserving the environment (Adams & Infield 2013). This has led to a reduction in encroachment and eucalyptus planting in the wetlands. Further programs such as the National Wetlands Program and Semliki conservation project which have risen from CBT activities have established village by-laws governing the use of wetlands (Adams & Infield 2013). Environmental education has played a role in ensuring sustainability of tourism.
Similarly, in Kenya, involvement of the local people in tourism activities has led to reduction in wildlife poaching and destruction of forests. Community wildlife and conservation ventures in Kenya have played a major role towards protecting the environment and preserving wildlife (Jonathan et al. 2013). Environment degradation has reduced and conservation measures strengthened with the help of the locals who are employed as park ranges and ‘porters’. Community based tourism and eco-tourism have led the way towards responsible travel with important environmental benefits.

Differences

Having highlighted the similarities, it is important to identify some of the differences in community based tourism between the two countries. One particular difference relates to the extent to which community based tourism is promoted. CBT in Uganda is only limited to areas within or along the forest reserves and national parks. Almost all of the community projects are within or along the forest reserves and national parks. For example, the Buhoma Community Restcamp is within the impenetrable Bwindi Forest national park. The Mgahinga Community Campground project lies next to Mgahinga Gorilla National Park (Zeppel 2006).
Others including the Bigodi Wetland Sanctuary, Busingiro and Kaniyo community project and the Ruboni community campground are located along or near national parks and forest reserves (Zeppel 2006). Community based tourism activities in Uganda continue to be limited to areas lying within or along the national parks and forest reserves. This has been echoed by Industry operators who have highlighted ‘limited efforts to promoting community tourism at the national level’ as one of the main concern of tourism development in Uganda.

In stark contrast, community based tourism is promoted at the national level as evident with the opening up of new areas of possibility such as sports tourism, eco tourism, adventure safaris, horse and camel safaris, walk tours, and cultural tourism among many others (Cobb 2006). Further, programs such as the Enterprise Development Program have been implemented across the country to build the local capacity and integrate communities into tourism development activities. Such programs ensure the mobilization of the community through seminars, debates, regional workshops and participatory trainings (Ruhiu 2007). Further the local communities are provided advisory services on product development and market access which helps strengthen growth of their enterprises (Cobb 2006). This has been driven by the realization of the potential of community based tourism to reduce poverty, and multiplier effects of the tourism sector as a whole in driving the economy.
Perhaps another difference that can be pointed between CBT in Kenya and Uganda relates to the coastal attraction. While community based ecotourism ventures along the coastal region form the flourishing tourism sector in Kenya, Uganda being a landlocked country does not have any coastal attractions (Mulinda & Wilbert 2009). Coastal attraction features provides Kenya with an edge over Uganda(Wilbert, 2009). Beaches, sun-basking, the aquatic life at the coast and rich culture that includes performances, dances and the contemporary ways of living of the coastal people make it a popular tourist destination.
Another difference is related to the marketing and promotion of CBT activities. Unlike Uganda, Kenya has invested more in marketing and promotion of tourism activities. For example, last year, Kenya budgeted $34 million dollars for tourism promotion and marketing. This is in stark contrast with Uganda’s budget of only $90,000 (UIA 2014). While this may be seen as impacting on development in the overall sector, community based enterprises are also affected in terms of the number of visits and revenues generated from sale of products. Uganda’s funding of the sector remains very low despite the potential of becoming a multi-billion sector. The slow pace of tourism in Uganda can be attributed to the lack of identity at the international level. While Kenya has promoted their visibility at the international level, Uganda is still lagging behind in terms of investing fully in promotion of tourism.

While CBT in Kenya has grown much faster than Uganda, it has not developed as expected owing to many factors including in adequate funds for marketing and promoting tourism, transparency and governance issues, lack of marketing skills and absence of a system for ensuring equitable sharing of the opportunities and benefits accruing from tourism activities. For example, while Kenya’s budget for promotion of tourism may be $34 million, the Kenya Tourism Board receives only $6 million.

Further, funding remains a major problem in both Kenya and Uganda. Given that these countries are still developing, there are very limited financial resources for supporting CBTEs. Even when these finances are incorporated in government budgets, they are often inadequate to support CBT developments (Ruhiu, 2007). As a result, community based tourism has often relied on foreign investment which may lead to the rise of neo-colonial structures discussed above as foreign investors seek control of tourism resources.

Whereas Kenya may be ahead of Uganda in terms of pro-tourism development, it is still far from being developed as it is still prone to failures resulting from limited funding, poor infrastructure development, lack of formal education, political influences and inadequate representation of the locals. CBT in Kenya still remains very low with lack of local representation in the workforce. While the industry may boast of over 500,000 jobs, the employment opportunities remain inequitably distributed (Cheung 2012). Most of the local communities are missing out on employment opportunities as these are being taken over by the outside workforce. According to a survey conducted by Bruyere et al. (2009), 64% of the local community members found the employment opportunities to be insufficient. Kenya’s community based approach to tourism development is still largely skewed to the interest of tourism (hotels, hospitality and service) with limited representation of the locals.
There are also political considerations to take into account. For example, a neo-colonial structure has emerged within the industry as some foreign investors seek control of tourism resources. (Cheung 2012). This has resulted in social and political disempowerment of the locals as neo-colonial structures have made it increasingly difficult for them to participate in the planning and decision making process. Although there exist more opportunities for local entrepreneurs to invest in the industry compared to Uganda especially given the ongoing development agenda that encourages of the growth SMEs, a divide of power continues to disengage and disempower the local communities. The majority of Kenyans continue to live below the poverty line with the highest incidence of poverty occurring in tourist destination areas.

5. Conclusion

The above has looked at the notion of CBT with particular reference to the situation in Kenya and Uganda. From the analysis, both countries seem to share certain commonalities and differences as well. For example, community based tourism is embraced in both countries and recognized as an important tool for reducing poverty. Also, both countries are heavily reliant on donor funding. Moreover, the locals in both countries have experienced improvement in their livelihoods through employment opportunities, and access to school and health facilities. Further, Pro-poor tourism has assisted women with bead making through provision of platform for selling products.
Both countries have also seen improvement in their environments which has resulted due to community development projects and conservation ventures. In Uganda, programs such as the National Wetlands Program and Semliki conservation project have established village by-laws governing the use of wetlands. Community wildlife and conservation ventures in Kenya have played a major role towards protecting the environment and preserving wildlife.
There are also sharp differences in CBT developments in both countries. For example, community based tourism activities in Uganda are limited to areas lying within or along the national parks and forest reserves. In stark contrast, community based tourism in Kenya is promoted at the national level as evident with the opening up of new areas of possibility such as sports tourism, eco tourism, adventure safaris, horse and camel safaris, walk tours, and cultural tourism.
Another difference is that Uganda being a landlocked country does not have coastal attractions. On the other hand, beaches, sun-basking, the aquatic life at the Kenyan coast and rich culture that includes performances, dances and the contemporary ways of living of the coastal people make it a popular tourist destination. Additionally, Kenya has invested more in marketing and promotion of tourism activities compared to Uganda. While Kenya has promoted their visibility at the international level, Uganda is still lagging behind in terms of investing fully in promotion of tourism.
While CBT in Kenya has grown much faster than Uganda, it has not developed as expected owing to many factors including in adequate funds for marketing and promoting tourism, transparency and governance issues, lack of marketing skills and absence of a system for ensuring equitable sharing of the opportunities and benefits accruing from tourism activities. Nonetheless, the future of tourism in both these two countries lies in community based tourism. The potential of CBT to reduce poverty and make the sector sustainable is enormous. Not only can CBT help in enhancing biodiversity conservation but it can also generate income and bring economic growth to the local communities.

6. References

Adams, W. and Infield, M. 2013. Community conservation at mgahinga gorilla national park, uganda. Institute for Development Policy and Management, Manchester.
Akama, J. and Starry, P., 2000. Cultural tourism in Africa: strategies for new millennium.Africa International Conference, Mombasa, Kenya.
Beeton, S (2006) Community Development Through Tourism, USA: Landlinks Press
Bruyere, B.L., Beh, A.W. and Lelengula, G., 2009. ‘Differences in perceptions of communication, tourism benefits, and management issues in a protected area of rural Kenya’. Environmental Management, 43, 49-59
Butler, R., Hall, C.M. & Jenkins, J. 1998. ‘Continuity and change in rural tourism: Introduction’ in R. Butler, C.M. Hall and J. Jenkins (eds) Tourism and Recreation in Rural Areas (New York: Wiley) 3-17
Cheung, H., 2012.Tourism in kenya’s national parks: a cost-benefit analysis. Kenya
Giampiccoli, A. and Kalis, J.H., 2012. Community-based tourism and local culture: the case of the amaMpondo, vol. 10 (1), pp. 173-188
Frederic, T., Grace, B, and Celestine, k. 2011. Opportunity study: Uganda inclusive tourism.
Jonathan, T. B., Nelly, J., and Nehemia, K., 2013. ‘An examination of Kenya’s outbound tourism to ugandan destinations: towards re-thinking Kenya’s tourism product development and marketing’. Journal of Economics and Sustainable Development 4(8).
Kibicho, W., 2004. Community tourism: a lesson from Kenya’s coastal region. Journal of Vacation Marketing, Vol. 10, pp.33-42
Korir, J, Muchiri, J and Kamwea, J 2013. ‘Wildlife Based Tourism, Ecology and Sustainability of Protected Areas in Kenya’ Journal of Natural Sciences Research 3:3,
Koster, R.L., 2007.An evaluation of community based tourism development: how theory intersects practice. Priarie Perspectives
Lopez-Guzman, T. and Sanchez-Canizares, S. and Pavon, V., 2011.‘Community based tourism in developing countries: a case study’. An International Multidisciplinary Journal of Tourism, vol.6 (1), pp 69-84
Mearns, K., 2003. Commmunity based tourism. The key to empowering the Sankuyo community in Botswana. Africa Insight, 33:29-32
Mujuni C.N., K. N., P. van de Kop, A. Baldascini and S. Grouwels 1., 2003. ‘Community-based forest enterprise development for improved livelihoods and biodiversity conservation: A case study from bwindi world heritage site, uganda’. In World Forestry Congress. Canada, Quebec City.
Ndivo RM, Waudo, J N and Waswa F 2012. ‘Examining Kenya’s Tourist Destinations’ Appeal: the Perspectives of Domestic Tourism Market.’. Journal of Tourism and Hospitality, 1, 103.
OECD 2012.Tourism Trends and Policies, OECD Publishing, UK
Paul, A. 2004. Tourism in a rural Ugandan village: impacts, local meaning and implications for development. Pergamon, New York.
Pearce, D. 1992 ‘Alternative tourism: concepts, classifications and questions’, in Smith, V.L. and Eadington, W. R., (eds), Tourism Alternatives: Potentials and Problems in theDevelopment of Tourism, New York: John Wiley and Sons pp. 18–30.
Rihiu, J.M., 2007. Capital for investing in community based tourism (CBT) – grants vs loans. National Ecotourism Conference
Sanchez-Canizares, T. and Lopez_GuzmanL, 2013. Community – based tourism in developing countries: A case study Tourismos: An International Multidisciplinary Journal Of Tourism 6(1):69-84.
Scheyvens, R., 2002. Tourism for development empowering community. Harlow: Prentice Hall
Suansri, P., 2003. Community based tourism handbook.Responsible ecological social tour – REST project, Thailand.
Tasci, A.D., semrad, K.J. and yilmaz, S., 2013. Community based tourism: finding the equilibrium in the COMCEC context setting the pathway for the future.
Tang, K. 2013. Community based tourism. Singapore.
Tefler, D.J., 2009. ‘Development studies and tourism’. In: Jamal, T. and Robinson, M. (eds). The SAGE handbook of tourism studies, London: SAGE Publications
Zeppel, H. 2006. Indigenous Ecotourism: Sustainable Development and Management. CABI.

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Nowhere in Africa

Desperate situations create good autobiographical novels. To meet those situations, an individual looks out for desperate remedies. To face worst situations, the best and the bravest within the human personality, surfaces. For the new and unexpected situations solutions are found. The seemingly impossible, becomes possible. New situations not only become tolerable, but acceptable. One comes to enjoy beautiful experiences. The routine and protected life, when suddenly disrupted, finds new vibrant alternatives. The new way of life, gives rise to new views about life. The strange surroundings turn out to be divine blessings. Nowhere in Africa turns out to nowhere in Africa!

The Film:

The autobiographical novel-based movie is about such happenings in the life of Stefanie Zweig. Walter Redlich was a successful lawyer in Germany, when Hitler rode to power. The persecution of Jews in Nazi Germany was gathering speed, and to remain in Germany was to invite grave danger to life and property for the Jews.  Walter moved to Kenya. But his wife Jettel and daughter Regina stayed back. This decision of Jettel, shows her love for the social life in Germany, her reluctance to give up the comforts of city life. She also wishes to keep her daughter under her protective wings.

She doesn’t like the dark and backward country Kenya. She is a prominent figure in the social circles in Germany, and she is enamored by the glamour of social life in Germany. As the Nazi persecution goes on unabated, Jettel has no alternative and she joins her husband in Kenya along with Regina. Her worst fears about the life and living in Kenya come true. She is accustomed to live a cozy life in Germany, and she resents the rugged farm labor imposed in her new Kenyan pattern of life.

Another psychological problem surfaces for Walters as he discovers that Germans are not liked by British settlers in Kenya. The young Regina suffers the most, initially. She finds herself lost in the new and unfamiliar surroundings and nothing fascinates this young girl—except their African family cook, Owuv. Gradually, she begins to like the natural beauty of Kenya. A deep friendship sprouts between Owuvr and the young child.

Subsequently Germany invades Africa, and the German National Walter is taken to a British internment camp along with his wife and daughter. The beauty Jettel, seduces a British Army Officer, Walter is put in charge of another farm, and Regina is admitted to a boarding school. The strength of the movie is that it searches the real Africa, its soul, through the innocent and affectionate view point of the child, which has malice towards none. She is kindled with curiosity to know the ways of the world around her.

The vast gorgeousness of Kenyan plains has tremendous appeal to her. The transformation that takes place in the city -kitten Jettel as a professional farmland Manager, is real and worth noticing. She understands now, and is not fussy. But human nature being what it is, she continues to be culturally insensitive. She came to Kenya to escape torture and certain death at the hands of Nazis, but it is tormenting to watch how she discriminates against the native Kenyans –then where lies the difference between her and the Nazis?

The strength of the film lies in the authentic portrayal of the characters, how they face the ups and downs of the family relationship and the gradual growth and the relevant changes related to its characters. This film is suitable for family viewing. But the short sex scenes and those related to animal sacrifice do not contribute to the overall dignity of the movie.

Nowhere in Africa, an Autobiographical Novel, Stefanie Zweig.

That the movie is based on this best-selling autobiographical novel won the 2002 Academy Award for the best foreign language film speaks about the merit of the novel. The book describes the harsh realities for the Redlich family, moving from a western country, Germany, to the remote farmlands of Kenya. Regina, their five year old daughter has no problems to adjust and adopt the new way of life. Their cook, Owuor is their language teacher as well. They begin to love the country of their forced choice, but when the war is over, the real problem surfaces. Walter wishes to return to Germany, but once the- Kenya-hater Kettel, wishes to stay back in Kenya. The German children, on their return to Germany after the War, are strangers in their own land. They have to learn German from the beginning.

Whenever a book is made into a film, changes in many areas are inevitable. The actress shown in then film (Kettel) and the real mother of the novel are diametrically opposed to each other. Many other parts of the film are true to the contents of the novel. The African cook speaking Swahili gives the genuine touch to the conversation. Stefanie wrote the book under strange circumstances. The paper for which she was working closed down and then she joined a tabloid paper in Frankfurt, as Arts Editor. There she did many a film reviews. She admits the limitations of making a film out of a book, when she says, “So I knew that the film and the book weren’t going to be the same.”

The reality of Walter family returning to Germany after the end of the war has been very well depicted in the book. The great love of Stefanie for her father is also touchingly narrated on more than one occasion in the book. She was asked to do a thing, which she did not like-returning to her own Germany, which was a strange land to her on all counts but she did it for the sake of her love for her father. In a novel the author has lots of freedom to write detailed descriptions, but the director of the film has limitations. Therefore, then film is not the true representation of her life, as compared to the book.

The emphasis in the book is for the story of the little girl Regina (Stefanie), but in the film it shifts to her parents and their marital problems. In a highly complicated novel like Nowhere in Africa, with several characters interacting with each other and shifting locales, film adaptation is very different from the original text. The undercurrent of love is seen through the characterization of all characters in the novel, that’s why it is said, the novel tells something deep within the author. It was her father’s advice not to hate. Also the life of 1938 as depicted in Kenya is much different from what is portrayed in the film.

More importance is given in the film to the Walter couple and they talk of their marriage incessantly, sidetracking the real problems of their forced migration. Their intense talk about adjusting and saving their marriage looks unrealistic in the given circumstances. At least that is not what is described in the novel. The family escaped from Nazi Germany certainly not to settle scores about their marriage relationship, they had other priorities in life, according to the book. But the film ignores it. That is moving from the tracks of reality.

From the point of view of generating revenue for the film, the leading lady of the novel has got to be glamorous, she has to have some peculiar characteristics either positive or negative, and Jettel has been accordingly shown as a cold, calculating and a woman filled with vanity. The book views the qualities in a different perspective. She is not at all that had as shown in the film. To be unhappy is one thing. But what is chiseled in the film is no justice to Jettel.

The film presents a more luxurious pattern of life than what is depicted in the novel. As a child Regina was very poor and she could not afford the costly costumes shown in the movie-that is not what is shown about her at that age. But the Regina of age 12 in the book and the movie are one and the same. Her deep love for Ouwor is shown realistically in the movie as compared to the book.

The book was hailed as the Society’s best juvenile title in The Netherlands. So also, the movie, whose main focus is on the parent’s relationship. She wrote the book out of respect for her parents. The strong influence of her father played a big part in shaping of the book, which the film could not show in detail due to the limitations of time and other related factors. The actress does not convey the real Jettel in the book. Besides being tough, she was a charming human being also. You see and experience the lasting human love between her and the family cook Ouwor. That’s a great characterization in the book.

————————

References:

Nowhere in Africa, DVD, 2003

Zweig, Stefanie, Nowhere in Africa: An Autobiographical Novel, Publisher: University of Wisconsin Press; 1st edition (March 15, 2004) ISBN-10: 0299199606 ISBN-13 :
978-0299199609

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Statement of Interests

“Studies! Studies! Studies! You have no time for indulgence; there is not much time for games or hobbies. They are luxuries.” These words are still ringing in my years.

It is an unforgettable period of my life-the tough days at campus that has made me whip myself to be a top performer in my curriculum. It was tough studying in Kenya, where the facilities are limited but the curriculum is overwhelming. The standards expected by our universities were different where an overall GPA of 2.65 was meritorious and the performer was a topper [if it were more it would have spoken poorly of the syllabus, training as well as grading].A tremendous capacity for hard work and focused efforts made me one such performer, and has enabled me to apply for this program of MSIS.

I have acquainted myself with many computer applications and through intense self-motivation I have learnt these by trial and error – This field of technology is fascinating because it is the most relevant in the current scenario. Moreover, Information Technology is evolving day after day and there is no end to innovation in this field. Getting systematic hands on training is my intention and this program is sure to provide me the chance.

This will enable me to enhance my skills and I shall use the practical knowledge acquired here to improve my creative skills, thereby excelling in my future career. . I have dreamt of a lucrative career in this field, one that is full of self-improvement and that gives room for novelty every day. It is fascinating to see how information is passed on through an organization while at the same time is being integrated with and aided by newer and newer computer programs and applications.

In Kenya, the system of education focuses a lot on theory and not practical applications. I need to apply the intense theoretical knowledge I acquired all these years and this can only be achieved here .This MSIS Program will provide me with a specialized knowledge of Information Systems and expose the student to practical applications in systems analysis and design.  Moreover, choice of  electives in ERP, , problem formulation ,decision supporting systems  and electronic commerce application theories  would provide one with  new  skill sets  and enhance existing ideas  .

My aim is to be an expert problem solver, using technology to achieve strategic advantage in modern organizations .  It has been a longstanding dream to pursue a Masters’ in the US and to seek prestigious employment in the field of Information Technology and be that high-flying executive who is a big asset to a Fortune 500 company.

As my desire is to hold a position of significance in a huge company, the necessary expertise to analyse, synthesise and evaluate situations to make sound decisions is imperative. The integrated approach of experimentation and analysis offered by the MSIS Program would provide my longed-for practical training and help me be an expert System Creator. I would ultimately go back to my homeland where managers of superior skills are in short supply and then I would be able to make good use of all the experience acquired over here.

My performance in underprivileged circumstances stands testimony to my hard work and motivation. I am very meticulous and systematic by nature and my attention to detail is sure to stand me in good stead in this logical field of Information Systems. I would make the best of the great opportunity in the U.S. and the training acquired here would stay through the rest of my career, helping me achieve my ambition in life. There is also the fond hope and wish that one can fit in extra hobbies within the time available, given the desire and proper time management.

Dear student,

I have written your essay and I sincerely pray that you get admission into a good school, thereby fulfilling your ambition in life.  I have written quite forcefully about your overall grade being very meritorious because I was worried that if, by chance, it fell short of the cutoff, the tough conditions in Kenya should at least speak strongly in your favor.  However, I would like to make a few suggestions.

1. I have mentioned a few electives that I thought may best suit you [you have to impress upon the panel that you are very focused in what you want and cannot be general all the time]. . Now, you go through this very carefully and use your discretion to include or eliminate the names [as you think fit]. You will be able to get an idea if you read the brochure of the schools, and the electives offered. However, see that it coordinates with the general theme and tone of the essay. If something of your aptitude is more logical then you can include that also.

Another suggestion would be that you do some home work on all that you have written before you attend your interview [if there is a personal interview-] you must give very precise answers and nothing should be vague or generalized. That will give an unfavorable impression.

I have just mentioned about the ‘tough’ days in campus-you may add the number of years-say—“ 5/6/7/ years of  life in Boarding school and the five/four year period of Engineering  college’[yearsxxxx-yyyy].

As the question stresses on what this program would help you achieve, I have not highlighted your hobbies and other interests. [You did not have time or the facility to shine in any hobby of yours from what I could gather. There was no point in highlighting this in your essay.] However, you can make a discreet mention in your c.v.

WISH YOU ALL THE BEST IN YOUR FUTURE ENDEAVOURS AND HOPE YOU GET ADMISSION IN THE SCHOOL OF YOUR CHOICE!

Writer 7160.

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The Nandi Warriors

Deep in the Western Highlands of Africa lives a group of people known as the Nandi people. These people once lived a sedentary life as cattle herders and agriculturalists.  Interesting facts about the Nandi people include beliefs of male and female circumcision. In the past, large ceremonies were held every seven and one half years for male circumcision, which provided rite of initiation into adulthood (Wikipedia, p.1).

While male circumcision is an everyday occurrence here in the U.S., female circumcision is not. Female circumcision was performed among the Nandi females in preparation for marriage. In addition to beliefs such as male/female circumcision, this culture also believed in female-female marriages (Wikipedia, p.1). The female-female marriages solved the problems of marriage failure, and served as a way to rescue young mothers from social and economic distress.  Born from this group of intriguing people were the Nandi warriors. Men young and old formed this protective group who later came to be known as one of the most notorious for slaying in Kenyan history (Kamau, p.1).

The Nandi Warriors were successful in keeping out any possible threats to their people by limiting access into their territory. Many outsiders attempted intrusion in order to proceed with trading practices, and as a result, thousands were killed. Small groups of the Nandi warriors would lead intruding caravans deep into the Nandi lands, where, later in the evening, the warriors would massacre their “guests” (Bishop, p.1).  Only rarely did the warriors entertain trading opportunities. Items up for trade included ivory and other coastal goods in exchange for cattle (Biship, p.1).

While the Nandi Warriors’ protective measures would continue to last only a short time longer, the British’s own slaying of Nandi Warrior leader Kimnyole arap Sameoi would end slayings on the Nandi people’s behalf completely (Kamau, p. 1) in order to proceed with foreign rule. This defeat, enforced by the Imperial British of East Africa, would end the Nandi Resistance, and allow the peaceful beginnings to show face to the Nandi people, as well as surrounding areas.

The Nandi were noted warriors (Bishop, p.1). After many battles, many victories and many defeats, the Nandi Warriors were feared by anyone who had reason to walk by their territory. Resistance to foreign rule would eventually weaken the opposition of the Nandi Warriors, and much needed peace would be restored in East Africa.

Works Cited

1.Cultural Safari. 2005. Kenya Tourist Board. MK Literary Group. January 2007.

2.  Warriors in the Heart of Darkness: The Nandi Resistance. 2002. Koitalel Kenyan Heroes. Dennis Biship. January 2007.

3. The Unresolved Issue of the Kenyan Freedom Movement. 1999, Rev. 2000. Saxakali.com. Michael Mundia Kamau. January 2007.

 

 

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How Should Rmit University Address the Issue?

How Should RMIT University Address the Issue of Declining International Student Numbers in A Very Competitive Global Market? [pic] Executive Summary Royal Melbourne Institution of Technology (RMIT) is a worldwide famous university and it provides global education service with good evaluations, lots of international students in Australia would choose RMIT University for their first or continuing studies and they are becoming a big part to consist of RMIT University students.

But recently, because of the global financial situation change and current conditions in Australia, the RMIT University might face the declining problems of international students. Base on this overview, this research provides an analysis and recommendations of current RMIT University’s international student’s situations and future improvements. The purpose and objective of this research is searching the most closely reasons which are creating the biggest influence in international students’ evaluations and social measurements.

The major method of analysis adopts questionnaires survey; each questionnaire involves eleven progressive questions to measure the results from different gender, nationality, level of degree and personal opinions. The sample of survey can be found in appendix. The outcomes of primary and secondary data analysis indicate that the current international students declining in RMIT University because of the whole trend of the Australian international students is decreasing and lots of international students are not satisfied with RMIT University’s basic conditions or they just measured it as “Just okay”.

This paper finds out the general evaluation of RMIT University is medium, a part of international students’ rate is high quality, but the most investigators evaluated as medium or lower indications. The major area of declining problem possibly is related with RMIT University itself, such as education and facilities quality, tuition fees and so on. But the integral situations in Australia also influence the student source of RMIT University. The recommendations are discussed as: 1. Improve education quality; . Enhance the quality of facilities and assistant services; 3. More overseas advertising; 4. Career or employment support; 5. Students wellbeing care; 6. Establish more scholarship programs and reduce tuition fee. Table of Contents 1. Introduction………………………………………………………….. 6 2. Research Purpose and Objective……………………………………. 7 3. Methodology………………………………………………………….. 8 4. Findings and Outcomes……………………………………………… 9 5. Recommendations…………………………………………………… 15 6. Conclusion…………………………………………………………… 9 Reference…………………………………………………………………………………… 21 Appendix…………………………………………………………………………………… 23 1. Introduction In this particular research paper, the major research project is around the question of “How should RMIT University address the issue of declining international student numbers in a very competitive global market? ” to seek relative factors and then analysis main reasons and influence.

The first part of this paper is identification of research purpose and objectives; in this part it briefly describes currently general situation of Australian international students market and most of universities’ behaviours. Especially, this part represents detailed information of international students in Royal Melbourne Institution of Technology (RMIT) and recent important performance, and then combines all mentioned data and information to confirm the research purpose is aim to find out core factors by examine all related elements.

Base on the research purpose of this paper, the reasonable and logical methodology should be used in collecting data and distribute the results from data analysis, therefore this article adopts the method of questionnaire survey to collect information from RMIT University’s international students. In this particular questionnaire, it concerns the research project to set up eleven progressively questions. And in third part of this paper, it through the main questions in survey to create accurate data results to assist the continuous analysis and final outcomes.

At the end of analysis, according to previous detailed analysis of primary and secondary data, this paper suggests several reasonable and active recommendations such as enhance the quality of education system and facilities and so on to support the objective purpose of this research. Finally, the conclusion of this research summarise all findings and emphasize the key improvements which is suggested to RMIT University then help institution to solve current problems. 2. Research Purpose and Objective

A number of international students in Australia have increased considerably over many years ago. More people, particularly from Asia-Pacific region, were likely to study in Australia. Many universities tried to develop educational systems into Australia education standard and undertake assessment of overseas qualification by the National Office of Overseas Skills Recognition (NOOSR) in order to attract more international student (Auditor General Victoria, 2002). However, since the global financial crisis in 2008 numbers of international students are decreased by 10% to lowest levels.

Margaret Gardner, vice chancellor and president of RMIT University, said that there is likely to be a decline in the total number of international students coming to Australia. This issue can be caused by many factors, that influence dramatically on decision, such as a soaring currency, restriction of visa application, etc. (Mercer, P 2011). Furthermore, students also have other option countries, which are more affordable study destination. All Australian universities are faced high competitive situation.

This seems to be very concerning issue due to the fact that an education industry earns a massive income from international student. According to Ding, K (2012), international students bring Australia a huge $16. 3 billion in export income in 2010-2011. RMIT University is one of high reputation universities in Melbourne. It provides 74,000 students, including 30,000 international students inshore and off shore from more than 100 countries (RMIT University, 2012). However, it has also been in the declining of international student numbers situation even numbers of student in higher education was still growing (Lane, B 2011).

In 2011, the Australian Government has changed some visa application policies that would help reverse the decline in international enrollments (PIER, 2011). This may bring advantages to all universities, including RMIT University to have more international students’ enrollments. The purpose of this research is to examine various factors, which affect on decreasing in numbers of international student at RMIT University. The issue will be considered thoroughly in order to find out appropriate solution for this situation.

As a result, some crucial recommendation will be given to RMIT University to address the issue of declining of international student numbers. 3. Methodology Research was created by RMIT International students in order to investigate the declining of international student numbers issue faced by RMIT University and give some crucial recommendations to address the mentioned issue. Interviewees comprised 26 overseas students, divided by gender half and half from Chinese(14), Thai(2), Taiwanese(2), Malaysian(1), Indian(2), Ethiopia, Saudi Arabian, Pakistan, UAE, and Kenyan.

Most respondents were student 21 – 30 age group. This survey consisted of 11 questions. Personal information was surveyed in the beginning, regarding gender, age, and nationality. Other questions were linked to the factors that affect the problem of declining international student numbers in RMIT University. Furthermore, it can be inferred to some solutions that address the issue effectively. In the second part of the survey, the interviewees were asked about the person who influence most to study overseas, including provide financial while they are studying.

The questions focussed on internal factors that encourage international student studying at RMIT University. The next questions pointed at factors from RMIT University. The participants were asked for an opinion about the most popular education level in RMIT University for international student, also ranked a satisfaction of quality of educational system, facilities and student service at RMIT University if they were concern in these factors. The rest of the questions related to external factors, which would influence participants study at RMIT University. The respondents were asked to rank each factor influences’ to study at RMIT University.

Additionally, they were requested to show other option country for studying aboard, unless they studied in Australia. The last question asked for the recommendation to attract more international student come to study at RMIT University. A copy of the interview questions appears in the appendix section of this report. 4. Findings and Outcomes Generally, to study overseas will offer international students a better education and more job opportunities. On the other hand, international students also make significant contributions to Australian society and economy. For example, they will bring different cultures to communities and enrich them.

The Australian economy as well as universities will obtain benefits from the tuition fees paid by international students or other expenses. As the number of international students declined in Australia recently, RMIT University should pay attention to this issue for the sake of continuous making profits. Therefore, in this section we will analyse why the number of international students declined recently from secondary data which are collected from literature review and primary data which are collected from our questionnaires. The following graph shows the basic trends in international student visa pplications to Australia. Fig 4. 1 [pic] (Source: Australian Bureau of Statistics 2011) As Figure 4. 1 shows, there is a sharp increase of student visa applications from 2006 until 2008-09 because of the higher reputation of Australian education system. However, the total number followed by a significantly sudden decrease from 2008-09 until 2011. Because of the graph shows the whole trends of international student visa applications, it can be guessed that not only RMIT University experienced the decline, but also other universities such as Melbourne University or Monash University struggled.

Moreover, the decline issue has not changed from the end of 2011 and still continued in 2012. The following Fig 4. 2 shows the change of volume of Enrolments and Commencements in different Australian educational sectors. As we can see the total volume of Enrolments and Commencements in March 2012 declined by -8. 5% and -7. 2% respectively compared with the same month of last year. Especially, the Higher Education sector displays a decrease in Enrolments of 4. 0% and a 6. 0% decline in Commencements compared with 2011 figure. Fig 4. 2 pic](Source: Australian Education International 2012) What kind of reasons that contributed to this situation? According to Deloitte Access Economics (2011), the reasons include the appreciation of the Australian dollar which will increase the living cost in Australia for international students, the change of the General Skilled Migration program which made more difficult for international student to apply the permanent residency and the increased competition from other countries’ universities may also effect the number of international student visa applications.

The above analysis is based on the secondary data, next we will use our own data which are concluded from questionnaires to do the further analysis. One question in the questionnaire is: How would you rank the quality of education system of RMIT University? The reason why we ask this question is the quality of education system is an important component of a university. If the quality of a university is good enough and has a higher reputation, then more international students will choose it and vice versa.

The responses of this question can reflect international students’ attitudes to RMIT University. The result of this question is showing in the following Fig 4. 3. Fig 4. 3 [pic] Base: International students (26) Q: How would you rank the quality of education system of RMIT University? As we can see from Fig 4. 3, most interviewees which are 13 ranked the quality of education system of RMIT University as Medium. 7 interviewees ranked as High. However, we are very surprised that 2 interviewees ranked the quality as Low. This means they are not satisfied with the education of RMIT University.

The reason they gave us why they ranked as Low is they think recent years RMIT University did not improve its education system a lot such as the courses in some programs did not change for a period of time. Combined with this question, we think one reason of declining international student numbers at RMIT University should be the quality of education system is not as good as other universities such as Melbourne University. Fig 4. 4 [pic] Base: International students (26) Q: How would you rank the quality of facilities and services of RMIT University?

According to the answers of the respondent in terms of the quality of facilities and services in RMIT University (Fig 4. 4), the result looks like moderate. More than half of answerer (56%) thinks facilities and services quality can be accepted, only 4 students out of 25 who think RMIT University provide a good facility and services, while 28% respondents don’t like the facilities and services. Here, the facilities services, according to RMIT University, includes maintenance of all mechanical and essential services, mail services, cleaning services, fire and emergency services, and security system (RMIT University 2012).

But in the survey, except the facilities mentioned above, the respondent also considers the teaching facilities, library facilities, sport facilities, frequency of social events, administrative services and support, online learning resources, IT support and equipment, university web site, financial support and advice of RMIT University provided. Some students complain that: “there is always a long line in the hub, in computer lab, and even the printer”, “no available group meeting room unless I booked it couple of days before”, “sometimes, I cannot login myRMIT”.

Therefore, it is obvious to see that the quality of facilities and services of RMIT University is not a competitive advantage for attracting international student. Fig 4. 5 [pic] Base: International students (26) Q: How would you rank the following factors that influence you to study overseas such as at RMIT University? Knowing the factors that influence student to study overseas is significant to find the reasons of the changes of number of international students. As shown in the pie chart above (Fig 4. ), there are two main aspects that students will consider when they go to abroad for further study, that is, reputation of the university and education system quality, which occupied totally 52% of the all factors that the survey provided. After consider the university reputation and education quality, 15% international student prefer study at the country with the good currency exchange rate. In addition, tuition fee (13%) and social environment (10%) of the expected country as two important aspects will be considered before students choose the overseas university or the country.

Few students take into consideration the education policy (e. g. Double degree program in short-term) and the country’s immigration policy (e. g. , permanent resident policy), from the survey result, these two policies have the same number of supporter (5%). In this survey question, seven factors were offered, it is clearly that reputation of university, education system quality, education policy and tuition fee refers to the university, while another three factors: immigration policy, exchange rate of currency, and social environment of that country related to the country.

Regarding the survey result, compared with the concerns of the country, international students would like put more concentration on the choice of university. Besides, the survey provides an interesting choice, that is, “which country would you go to study instead of Australia? ” Almost every respondent said they want go to USA and UK, and they gave similar reasons, like: “high quality of education in the world, good education facility, good education atmosphere, weakness of US dollar”. In fact, their opinion of the choice is consistence with the factors affect people study abroad discussed above.

Thus, to attract more international students, the university should take more measures to improve their education quality and reputation, rather than relay on the policies of government. 5. Recommendations In the previous section, we have analysed the reasons that the number of RMIT University’s international students declined using both secondary data and primary data. In this section, we are mainly aiming to propose some recommendations for RMIT University for the sake of preventing the declining trend and continuous making profits.

The last question in our questionnaire is: If you were reporting to RMIT Executive, what would you recommend RMIT University do to attract more international students? This is an open-end question and the purpose of it is to obtain interviewees’ suggestions about the improvements for RMIT University. Finally, we have concluded 6 recommendations from all interviewees’ responses for RMIT University to address the issue of declining international student numbers. Improve Education Quality

Basically, most interviewees’ first suggestion is about the education quality of RMIT University. Education quality includes many areas such as the quality of programs, courses allocation of programs, physical environment of study and the quality of lecturers. Therefore, we think RMIT University should devote some effects to improving these areas in the future. For example, some courses in the program have not been changed for a long time; RMIT University could allocate different courses for the program after a period of time.

This will make the program fresh to students and follow the trend of educational development. By allocating different courses in the program regularly, the quality of program will be improved to a large extent. For the quality of lecturers, we think RMIT University should arrange some training courses for the lecturers regularly to enhance their abilities of teaching and also provide better resources and infrastructures for lecturers. This will improve the quality of lecturers in the long run. Enhance the Quality of Facilities and Services

Except the education quality, university’s facilities and services also play an important role in the levels of satisfaction of student experiences. To satisfy international student’s demand in terms of facilities and services, the paper would like recommend RMIT University provide more service counters in hub, and offer more computers in the lab, more group study rooms. For learning resource, more books or journals are required in the library and allowed registered student can assess more online learning resources.

Furthermore, provide more writing workshop for international student. More Overseas Advertisements Our third recommendation is about the advertisement of RMIT University itself. We think RMIT University should advertise itself more in education market especially in foreign countries such as Asian and European countries. In the advertisements, RMIT University should display its unique educational strength such as it is the only university that provides logistics program in Melbourne.

Because of the globalization is becoming a trend gradually, the logistics in some Asian countries is boosting its development and demanding more good logistics graduates. As a result, more students want to go abroad to get better education in logistics, so this could be an opportunity for RMIT University to advertise itself and increase the number of international students. Moreover, we think RMIT University should also enhance its cooperation relationships with other foreign universities. For example, RMIT University could introduce more students exchange programs such as study tour and cooperation programs.

Cooperation program means international student can study for a period time in his own country’s university and then come to RMIT University to study another period of time to acquire the certificate. This economic way is becoming more and more popular in Asian countries because it can save much cost for students who want to study abroad compared with the way that they apply RMIT University directly. Through this way, RMIT University could also increase its international student numbers. Establish More Scholarship Programs and Reduce Tuition Fee

The next recommendation is about scholarships and tuition fees. Many interviewees mentioned RMIT University should also provide scholarships for international students instead of only providing to PR students or citizens. In fact, most American universities will provide a fairly amount of scholarship to its students regardless of their nationalities. Moreover, as the exchange rate of US Dollar is depreciated currently, more students will choose American universities for better education and scholarship. That is one reason of declining international student numbers in RMIT University.

Thus, if RMIT University could also provide scholarships to international students, the number of students will increase to some extent because Australia has a better environment and society compared with America. This is a significant strength of Australia and an important reason for international student’s choice. Furthermore, tuition fee is another important aspect according to interviewees’ answers. They are not happy with the increase of tuition fee every year. Because the tuition fee is already very high for international students compared with local students.

If the tuition fee increases every year, it will be a big burden for international students. According to their answers, they do not hope tuition could decrease, they just hope the tuition fee can keep stable during their study period because they think the tuition fee is an important factor to influence their choice of university. Therefore, we think if RMIT University could consider the issue of scholarship and tuition fees, it will have more chances to increase the number of international students and improve the reputation. Career or Employment Support

The career support of a university provided is an advantage for attracting international students. Therefore, a suggestion for RMIT University is cooperate or communicate with some companies to offer some practical skill training opportunities to students, enable them obtain the practical work experience and professional skills before they get a job, thus, compared with their peer, the graduates will have more competitive advantage. Besides, RMIT University could provide job information to international students about working in Australia, such as: organise career expo.

Take Care of International Student’s Wellbeing A sense of wellbeing is integral to a high-quality experience for international students and is contains accommodation, community engagement and health and safety issues (Council of Australian Government, 2010). International students face particular challenges and may require some specialized services to support their wellbeing, because they may be living independently and for the first time in a foreign country with an unfamiliar culture and limited English skills.

Apparently, the issues of wellbeing are a responsibility of the council; however, university as an education provider and contact with international students directly, is an important channel to increase student awareness of safety and minimise safety risk by informing students. Therefore, RMIT University can provide safety information and advices to current and future international students and publicise the student personal safety guide to international student at orientation events. In terms of accommodation issues, as we known, there is no accommodation provided in RMIT University.

So, for international student’s convenience and safety, RMIT University can cooperate with housing agency to provide housing information through school’s bulletin board and website. One survey which was held by Council of Australian Government (2010) indicates that 80 per cent of international students want more Australian students as friends. The paper suggests RMIT University should actively to promote social events, help international students engage with local students and community groups and helps them adjust to the new society and culture. . Conclusion At the end of this report, according to the above detailed analysis and recommendations suggested. In conclusion, the major reason to cause the declining issue happens to RMIT University can be divided into two sections, first one is the integral influence, because of the current international students situation in Australia is indicating an decreasing trend therefore the national factors influence the international students source of RMIT University.

The second reason is the social evaluations, concerning the questionnaire survey’s result and analysis; the general evaluations for RMIT University from its international students are obtaining a medium level. Therefore, the results show that the RMIT University service provides to students which is just meet the basic level but not fully satisfied everyone, and most of investigators expect more improvements. Base on the research results, this report suggests several reasonable recommendations to help RMIT University abate current problems.

The major opinions include establish more scholarship programs and reduce tuition fee, take care of international student’s wellbeing and improve the quality of education system and facilities. Because of these three suggestions are the key reasons which were reflected on questionnaires research, therefore these performance should be developed first as essential conditions to innovate the whole institution then develop the other parts as long term enhancement and future strategies.

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Nigerian Economy: Macroeconomic Analysis

sisNigeria – Country Report 2012 61310039 Indian School of Business 7/6/2012 Contents Economic Overview3 Gross Domestic Product (GDP)3 GDP Composition4 Inflation4 Shadow Economy5 Trade Overview5 Foreign Debt7 Labor Market & Human Capital7 Population and Income Inequality8 Unemployment9 Currency10 Money Supply and Monetary Control10 Fiscal policy12 Exchange rates12 Interest Rates13 Foreign Direct Investment14 Globalization and Comparative Advantage14 Conclusion15 References16 Economic Overview Nigeria’s economy is estimated to be worth about $262bn, making it one of the largest economies in Africa.

The estimates and analysis of various indicators is discussed in the later sections. The country has fared better than many other countries during the global economic downturn, but systemic problems in infrastructure and the labor market mean that its position in the Economist Intelligence Unit’s global rankings remains towards the bottom during the forecast period, at 75th out of 82 countries. Efforts to create a significantly more attractive business environment are likely to produce only modest results owing to the slow pace of more fundamental reforms. Nigeria has taken steps to simplify trade by working on its tariff structure.

However, there is still a protectionist sentiment in the country. Cross border smuggling is still a major concern and is liable to remain an important feature of the Nigerian economy. The capacity and efficiency of Nigerian ports (Trade) have improved following the implementation of an ambitious concessioning program that transferred management of terminals to private operators. However, although the reforms have improved port operations and ship turnaround times, there remains the problem of corruption in the customs service, which can complicate and delay the clearance of goods. Gross Domestic Product (GDP)

The latest GDP projection data as brought out by World Bank is $ 268. 5 billion (2013 F) and the country population is projected at 175 million translating into a GDP/Capita to 2,213. The Real GDP Growth for Nigeria has been at 6. 8 %. However, considering the disparity in the country’s infrastructure viz-a-viz other Asian developing nations the growth rate is not enough for substantial improvement. Nominal GDP| 2007| 2008| 2009| 2010| 2011| 2012(F)| 2013(F)| US$ bn| 166. 5| 208. 1| 169. 4| 196. 3| 244. 2| 262. 4| 268. 5| N bn| 20,941| 24,665| 25,225| 29,498| 37,590| 42,877| 46,720| Real GDP growth %| 6. | 6| 7| 7. 8| 7. 4| 6. 4| 6. 9| Source: Economic Intelligence Unit| GDP Composition In Nigeria, the Investment component of the GDP as compared to the private consumption and government is very low, hovering at 17 % approximately. A developing market is required to invest around 40 to 50% of GDP in capital investment for successive number of years. However that is not seen with Nigeria. Hence, the prospect of Nigeria as an investment destination appears to be grim in the near future. | 2007| 2008| 2009| 2010| 2011| 2012 F| 2013 F| Private consumption| 6. 6| -34. 3| 6. 4| -26. 7| 11. 8| 9. | 10. 4| Government consumption| 90. 8| 4. 4| -8. 1| 17. 8| 12| 8. 5| 8| Gross fixed investment| 24. 5| -6. 8| 9. 1| -3. 6| 6. 5| 6| 6. 5| Exports of goods & services| -11. 7| 43. 4| -30| 11. 4| 11. 9| 10. 4| 12. 4| Source: Economic Intelligence Unit| The graph below gives the GDP contribution – Industry wise for Nigeria. Crude is one of the major contributors to the GDP. Hence, and rate fluctuations in the price of crude oil have added volatility in the Nigerian GDP. Inflation Despite monetary tightening carried out by the CBN in 2011, the forecast for inflation remains negative.

Inflation is expected to increase to 12. 7% in 2012. Fiscal laxity by the states is one of the main reasons for this. In addition, the payment of the newly instituted minimum wages and the injection of funds into the bailed out banks, inflationary pressure is bound to continue for the rest of the year. It is expected moderate only in 2014 as a result of moderation in commodity prices. The April 2012 inflation data as obtained shows a Month-on-month inflation to be (0. 13%), Year-on-Year (12. 9%), 12-Month Avg. Chg. (11. 1%). The inflation rate is exceedingly high and is detrimental towards investment in the country.

The Consumer Price Index and Nigerian Inflation rate is shown below. Source: Economic Intelligence Unit Shadow Economy The untaxed and unregulated revenues – by some estimates – account for between 40% and 45% of gross domestic product (GDP). Nigerians make most of their living, as street hawkers, minibus drivers, money changers or market traders. In spite of the abysmal performance of the country’s economy, poor infrastructure and unfriendly business environment Nigeria has huge potentials to be tapped because of its huge deposits of Natural Resources nd population that can be gainfully employed. The black economy accounts for a large part of the Nigerian economy. Trade Overview Nigeria has considerable natural resources such as oils, and the revenue from oil exports forms a major chunk of the Government fund. Nigeria has recently started a sovereign wealth fund and the excess returns from oil exports viz-a-viz projected returns is directed to this sovereign fund. This fund is building up at a slower pace as the revenue is being directed towards meeting government excess spending to meet the countries capital requirement.

The country has been putting efforts to tighten the fiscal policy and the same has been reflected in their medium-term expenditure framework. The country has projected a year-on-year budget deficit of 1% of GDP. However, from the recent trends it appears that Nigeria will be able to sustain a year-on-year budget deficit of 2% given the prices of oil remain stable even though the current European turmoil and a slowdown in china can push oil prices down and lead to further increase in Nigeria’s Fiscal deficit.

Nigeria intends borrowing from the international capital market for meeting its capital expenditure requirement in the near future. The total value of Nigeria’s exports in the first quarter of 2012 is at about USD 30 billion, the exports to India has reached USD 4. 2 billion, compared to USD 3. 7 billion credited to the US in the period under review. Nigeria’s export to India is mostly crude oil and cashew nuts while India exports pharmaceutical goods, machinery, electronics and rice. The US was trailed by the Netherlands with USD 2. billion, followed by Spain with USD 2. 4 billion and Brazil which recorded USD 2 billion. Nigeria is a member of the WTO and does not impose permanent import restrictions however it has a huge banned list of import goods which coupled with ad valorem tariffs have given rise to increase in smuggled goods. As such the restrictions do not seem to have benefited the local industries. There are specially designated export processing zones which provide benefits from tax, duties, foreign exchange restrictions and import-export restrictions.

The Nigerian Export Credit Guarantee and insurance corporation (Nexim) provides insurance under the government’s export guarantee scheme. This has helped exporters in raising funds at subsidized rates for refinancing. Nigeria figures 133rd on the Doing Business in Index among 183 world economies and 15th among the 46 sub Saharan African economies. The trade balance of Nigeria for period 2007 to 2011 and forecasted data for 2012 and 2013 is given below. | 2007| 2008| 2009| 2010| 2011| 2012(F)| 2013(F)|

Trade balance| 37,748| 45,885| 25,342| 20,237| 34,528| 34,131| 28,778| Goods: exports fob| 66,040| 85,729| 56,121| 73,698| 103,847| 114,068| 111,836| Goods: imports fob| -28,291| -39,844| -30,779| -53,461| -69,319| -79,937| -83,058| Services balance| -16,902| -22,113| -16,479| -19,231| -24,761| -24,278| -25,914| Income balance| -11,747| -15,059| -14,404| -18,623| -22,905| -20,913| -24,624| Current transfers balance| 18,545| 19,366| 18,694| 20,092| 25,004| 27,387| 28,562| Current-account balance| 27,643| 28,079| 13,153| 2,476| 11,867| 16,327| 6,802| Source: Economic Intelligence Unit|

Nigeria and its neighboring African nations have imposed strong continental Trade Barriers which is depriving the continent of new sources of economic growth, new jobs and leading to a sharp fall in poverty and other factors. However, many African countries are losing several billions of dollars in potential trade earnings every year, because of high trade barriers with neighboring countries. It is easier for Africa to trade with the rest of the world than with itself.

The Policy progress in the nation has been restricted due to political instability and tussle between the presidency and senior economic team. Policies towards changes in exploiting the proceeds from fuel exports are always the concern restricting policy improvements. The country has huge limitation in the power sector and the government has initiated privatization program focused mainly on the power sector, However the progress has been slow as a result of private-sector reluctance, the various vested interests involved and strong union opposition.

This is limiting foreign investments in Nigeria. Nigeria urgently requires Tax reform for attracting investments in the country and this policy reform is high on the political agenda. However due to conflicting interests and the fragile nature of the Nigerian administration reforms are expected to be slow. Foreign Debt Due to the economic slowdown public sector revenue and expenditure has contracted in the past 3 years. As a result of the budget deficit, infrastructure is facing acute shortage which is mostly financed by internal public borrowing while also seeking access to external funding.

The Nigerian government has set on the path of prudent reforms to reduce total spending while improving funding for capital requirements for efficient spending that will translate to long term economic growth. The government also launched a Euro denominated bond in 2011 and expects to return to the international debt capital markets again in the next few years. Labor Market & Human Capital The education system of Nigeria is in a poor state unable to meet the educational requirement of the country. There are currently only 46 tertiary institutions in Nigeria providing education covering all functional areas.

Out of the 42m Nigerian children who ought to be in primary school, less than 24m are in school. Out of the 33. 9m children of secondary school age, only 6. 4m are in secondary schools. The pass rate for JAMB examinations is about 20% – indicates poor quality of secondary school graduates. The educational system has not been tailored to meet developmental needs of the nation. Any foreign investment has to transfer both funds and human capital to the country. There are no improvements visible in the near vicinity.

The Nigerian Labor market is marred with constraints and there appears little prospect in the near future of resolving many of the key constraints to improving the labor market in Nigeria. Most of the talented Nigerians prefer to move out of the country and the country is suffering from a ‘brain drain’. Nigeria has a large number of very capable professional and highly skilled workers in a range of sectors. Unfortunately for the country, large numbers, particularly in the medical profession, live and work overseas, and the restoration of civilian rule in 1999 has failed to bring an end to the brain drain’. Although labor law reform in 2005 weakened the capacity of the unions to organize political or sympathy strikes, the labor movement remains powerful, capable of organizing paralyzing national strikes. Value of indexa| | Global rankb| | Regional rankc| | 2006-10| 2011-15| 2006-10| 2011-15| 2006-10| 2011-15| 4. 4| 4. 6| 80| 80| 16| 15| a Out of 10. b Out of 82 countries. c Out of 17 countries: Algeria, Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Libya, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Angola, Kenya, Nigeria and South Africa. Source: Economic Intelligence Unit| Population and Income Inequality The population in Nigeria is growing at a very fast pace, but given the poor state of the countries health care and educational system, this is only constraining the already dismal state of the country the growth rate is presented below, the high rate of population growth and the deteriorating state of infrastructure is not conducive enough for enticing foreign investment. Population (Million)| 2006| 2010| 2015| Total| 140. 4| 152. 2| 166. 7|

Period averages (%)|  | 2006-10| 2011-15| Population growth|  | 2. 1| 1. 8| Labor force growth|  | 2. 4| 1. 9| Source: Economic Intelligence Unit| Poverty in Nigeria remains significant despite high economic growth. Nigeria retains a high level of poverty, with 63% living on below $1 daily, implying a decline in equity. There have been attempts at poverty alleviation, but the inequality has been rising. Income inequality worsened from 0. 43 to 0. 49 between 2004 and 2009. This is correlated with differential access to infrastructure and amenities.

In particular, there are more rural poor than urban poor. This primarily results from the composition of Nigeria’s economy. Oil exports contribute significantly to government revenues and about 15% of GDP, despite employing only a fraction of the population. Agriculture, however, contributes to about 45% of GDP, and employs close to 90% of the rural population. This incongruence is compounded by the fact that oil revenue is poorly distributed among the population, with higher government spending in urban areas than rurally.

High unemployment rates have rendered personal incomes even more divergent. The graph below gives a comparison of the population below poverty line in relation to the total Nigerian population. Data Source: Economic Intelligence Unit Unemployment According to the ‘2011 Annual Socio-Economic Report’ released by the Nigerian Bureau of Statistics, the total number of unemployed people have increased from approximately 7 million in 2006 to 16 million in 2011. In 2011, approximately 2. 1 million people were newly unemployed.

The report has also predicted the new entrants into the unemployed pool to be around 8. 5 million in 2015. The increase is also interestingly explained by the tendency of Nigerian university graduates to stay away from labor intensive work. They are now ready to wait for a white collar job thus resulting in the entry of new university graduates into the unemployment pool. The total number of employed labor force has remained fairly constant from 2006 to 2011 at around 51 million. However, 10 million new people have been added to the labor force during 2006-2011.

The increase in labor force could be explained by the steady increase in the number of universities, polytechnics and colleges of education. While the enrollment in universities and polytechnics has decreased from around 460,000 in 2006 to 340,000 to 2011, enrollment in colleges of education has increased during the same period. Whereas the enrollment in state and federal institutions has decreased during 2006-2011, enrollment in private institutions has increased steadily. According to the report, the increase in unemployment rate has been kept in check by Nigerian government’s employment policies.

The unemployment rate in rural areas was 25. 6% and 17. 1% in urban areas. The total national unemployment rate was 23. 9% in 2011. Total unemployment rate amongst males was 23. 5% in 2011 while the same rate amongst females was 24. 3%. The report explains that married women who previously stayed out of the labor force have now started entering the market for jobs due to a raise in claim for financial independence. More women are also now forced to enter the labor market because of the need to supplement the income of males in families.

The unemployment rate has been consistently growing in Nigeria due to lack of industries, political stability and a myriad of other reasons. Unemployment is leading to crime and shadow economy which is further hindering investments in the country. Data Source: Economic Intelligence Unit Currency The Legal Tender followed in Nigeria is the Naira (sign: ? ; code: NGN). The Central Bank of Nigeria referred as CBN is the sole authority responsible for issuing and maintaining the volume of the currency in the Nigerian economy.

The currency was adopted by Nigeria on 1st Jan 1973 replacing the pound that was being followed since the colonial days. Money Supply and Monetary Control The Central Bank of Nigeria (CBN) is the central bank of Nigeria. Since the global financial crisis of 2008-09, maintaining adequate liquidity and averting a total collapse of the banking system has been the main focus of the CBN. The CBN uses the Monetary Policy Rate (MPR) to anchor short term money market rates and other interest rates in the economy.

Open market operations conducted through the Treasury Bills auction is the major instrument of monetary policy. The CBN also uses discount window operations (including standing lending and deposit facilities, repo and reverse repo operations) and Cash Reserve Ratio (CRR) in monetary management. The banking crisis of 2009 and the subsequent reform initiated in the banking sector has complicated the monetary policy. The central bank also ensures that there is sufficient lending in key sectors such as agriculture.

Since 1977, Nigeria has had an Agric Credit Guarantee Scheme (ACGS) under the management of the central bank. The Central Bank of Nigeria (CBN) is responsible for maintaining a balance between its objective of managing inflation and the government’s aim of reducing the cost of borrowing by the private sector to encourage investment in productive activities. The CBN is currently pursuing the former objective, having increased its prime interest rate six times during 2011: the Central Bank is attempting to counter what it sees as high inflationary expectations embedded in the system.

As the forecast period progresses and the inflation outlook improves, the focus of the CBN will return to easing monetary policy and boosting lending to productive sectors. Nevertheless, this has been complicated by the banking crisis of 2009 and the subsequent reform program put in place by the Central Bank, which is likely to mean that risk aversion among the banks persists into the first part of the forecast period at least. Below is the summary of the key Monetary Indicators for Nigeria. Monetary indicators| 2007a| 2008a| 2009a| 2010a| 2011a| 2012b| 2013b| 2014b| 2015b| 2016b| |

Exchange rate N:US$ (av)| 125. 8| 118. 5| 148. 9| 150. 3| 153. 9| 160. 7| 174. 0| 172. 0| 174. 0| 176. 0| Exchange rate N:US$ (year-end)| 118. 0| 132. 6| 149. 6| 150. 7| 158. 3| 170. 8| 173. 0| 173. 0| 175. 0| 177. 0| Exchange rate N:€ (av)| 172. 44| 174. 33| 207. 46| 199. 42| 214. 19| 209. 71| 224. 46| 217. 58| 215. 33| 221. 76| Exchange rate N:€ (year-end)| 173. 66| 184. 49| 215. 49| 201. 31| 210. 42| 221. 23| 222. 31| 215. 39| 219. 63| 223. 02| Real effective exchange rate, CPI-based (av)| 38. 05| 42. 32| 38. 59| 42. 11| 42. 74c| 46. 39| 46. 44| 50. 42| 53. 60| 56. 5| Purchasing power parity N:US$ (av)| 71. 31| 80. 30| 88. 60| 99. 68| 115. 8c| 120. 9| 121. 0| 123. 9| 129. 2| 136. 3| Money supply (M2) growth (%)| 58. 1| 53. 6| 20. 6| 3. 7| -0. 5| 8. 7| 20. 5| 19. 6| 17. 5| 18. 5| Domestic credit growth (%)| 358. 3| 55. 9| 41. 1| 14. 1| 28. 1| 7. 9| 21. 5| 20. 7| 18. 2| 17. 7| Commercial banks’ prime rate (av; %)| 16. 9| 15. 5| 18. 4| 17. 6| 16. 0| 16. 0| 14. 0| 13. 0| 13. 5| 13. 8| Deposit rate (av; %)| 10. 3| 12. 0| 13. 3| 6. 5| 5. 7| 6. 0| 5. 8| 5. 8| 5. 8| 5. 5| Money-market rate (av; %)| 6. 9| 8. 2| 3. 8| 3. 8| 8. 5c| 8. 8| 7. 0| 6. 5| 6. | 6. 0| a Actual. b Economist Intelligence Unit forecasts. c Economist Intelligence Unit estimates. Source: EIU| Fiscal policy While Nigeria’s fiscal policy during the last half of the decade has been favoring expansive expenditure in the productive sectors, there is growing pressure to introduce tough, unpopular market reforms to tighten the fiscal policy. However it will be difficult to do so considering the different interest groups that the government needs to placate and wider legislature that favors greater government expenditure to counter the crippling infrastructure deficit.

Even as investment in infrastructure remains critical, how the government manages to bring down the share of recurrent expenditures while improving the quality of capital expenditure is the key challenge. Another challenge for the government will be how it manages its dependence on oil prices, the key component of its revenue. A return to recession in Europe or a less than expected growth in China could bring down the oil prices. Exchange rates The Central Bank of Nigeria (CBN) has been responsible for managing the exchange rate and this was being done by auctioning of foreign currencies.

The CBN sets the exchange rate. However, Nigeria’s currency fluctuations is correlated to fluctuations in the oil prices. In 2007, the Naira saw significant appreciation viz-a-viz the dollar due to increase in Global crude prices. Nigeria’s central Bank intends making the Naira exchange rates floating and policy decisions are being formulated towards this objective. The CBN also intends to make the exchange rate independent to the extent possible and aims at intervening only to meet defined policy objectives.

The country has seen a huge depreciation of the Naira in the past 3 Decades, presently owing to the stable and strong crude prices the currency is considerably stable but is forecasted to slip further if the Global Economic crisis continues to deter. Source: http://www. exchangerates. org. uk/ Interest Rates The CBN kept its benchmark interest rate at 12%. The CBN will find it hard to balance its objective of managing inflation and the government’s aim of reducing the cost of borrowing by the private sector to boost investment.

Nigeria has seen a slowdown in economic growth in its economy as a result of slackening in global economic activities. As the tight liquidity condition persists, short term interest rates have been rising for the past couple of years. Another cause of concern for the CBN was the slowdown in interbank lending, which prompted the CBN to guarantee placements in the interbank market. This also helped bring down the interest rates in the short term money markets, such as the interbank call rates.

The above table indicates the Monetary Aggregates and Interest Rates as obtained in 2010. Foreign Direct Investment Although the government will continue to welcome foreign direct investment (FDI), the level of FDI outside the oil and gas sector will remain low in relation to the potential size of the market. This reflects the complexities of the local business environment, together with the bureaucracy, corruption, low productivity, poor infrastructure and low income levels that restrict the potential market.

The salient feature of the policy is enumerated. Full foreign ownership is allowed in all sectors apart from banking, although the Central Bank of Nigeria (CBN) has been more relaxed on the issue since the 2009 crisis in the sector and the subsequent need to recapitalize the affected banks. A new bill proposes to outlaw discretionary awards of oil and gas contracts, and stipulates that licenses must be given through “open, transparent and competitive” bidding processes.

Nevertheless, a number of Asian investors, from China, India and South Korea in particular, who have shown keen interest in entering Nigeria on the basis that they concurrently develop local infrastructure, may still find themselves the preferred bidder on new acreage. There is also likely to be a continued bias towards policy favoring local business, as evidenced by the recent local content bill for the oil industry that gives indigenous firms priority in the awarding of oil concessions and requires foreign companies to employ more local staff.

As a result, and with other countries set to improve more rapidly, Nigeria will slip in the global rankings from 67th to 71st out of 82 countries, and from 12th to 13th in the Middle East and Africa region. Value of indexa| | Global rankb| | Regional rankc| | 2006-10| 2011-15| 2006-10| 2011-15| 2006-10| 2011-15| 5. 1| 4. 6| 67| 71| 12| 13| a Out of 10. b Out of 82 countries. c Out of 17 countries: Algeria, Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Libya, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Angola, Kenya, Nigeria and South Africa.

Source: Economic Intelligence Unit| Foreign direct investment, net inflows (% of GDP) in Nigeria was 2. 99 as of 2010. Its highest value over the past 40 years was 8. 28 in 1994, while its lowest value was -1. 15 in 1980. The below outlines the Annual inflows of FDI along with its percentage composition of the gross fixed investment. (US$ m)| 2006| 2007| 2008| 2009| 2010| 2011| 2012| 2013| 2014| 2015| Annual inflows of FDI| 4,854| 6,035| 5,487| 5,787| 3,000| 3,500| 6,000| 7,500| 7,250| 7,250| % of gross fixed investment| 40. 4| 39. 7| 32. 1| 35. 3| 13. 7| 14. | 20. 5| 20. 9| 16. 8| 14. 2| Source: Economic Intelligence Unit| Globalization and Comparative Advantage Nigeria has not benefited considerably from globalization due to mono-cultural export, inability to attract increased foreign investments and huge indebtedness. And the way forward for Nigeria is to focus towards diversification of exports, debt reduction and expand developmental cooperation. Nigeria got connected to the rest of the world with the arrival of British in the Year 1539 and by the 1800’s Nigeria was under complete control of the British Empire.

And since then Nigeria’s trade has been heavily dependent on British trade. Nigeria has been a country rich in natural resources and traded these resources for weapons and tools. This asymmetric trade is the reason for the wide variance in the distribution of the nation’s wealth. The country received its independence in 1960 and during that time the Farm products was its major export. Post-independence, farm products constituted the major portion of Nigeria’s Trade. The six major agricultural products then were cocoa, rubber, palm oil, groundnut, cotton and palm kernel.

And this constituted 69. 4% of its total GDP for the year 1963/64. The other contributor to exports was oil. However, during that period oil was priced low at $3. 8 per barrel and thus was not much lucrative. The 1970’s saw Nigeria’s fortune turn with the jump in fuel price by almost 4 times. Nigeria had high grade petroleum reserves and these reserves were easier to extract. The petroleum price rose to $14. 7 per barrel by January 1974 and rates continued to soar reaching a high of $38. 77 per barrel in 1981.

Within the same period, total revenue from oil rose correspondingly. By 1978, oil contributed 89. 1% of Nigeria’s export and in the same year contribution from agriculture plummeted to 6. 8% of exports. The overdependence of the country’s economy on oil exports has seriously hindered the development in other spheres. Globalization poses a multitude of challenges on Nigeria. The countries very poorly on education, health, agriculture and industrial development and therefore it is imperative that Nigeria focuses on these area to fundamentally transform the nation.

The country requires focusing on technological development and science and Technology are required to be central theme of their Developmental Strategy. The Country also requires focusing on basic Infrastructure such as power supply and telecommunications and these must exist regularly and uninterruptedly. Also, industrialization, including manufacturing and fabrication must be brought in at the center place. There is a need to revitalize agriculture by utilizing the technologies in the field and shifting to mechanized farming. Conclusion

There is an element of risk of doing business in Nigeria even though the debt of the country is in a manageable state. A prolonged European crisis and a slowdown in China will lead to dip in oil prices and Nigeria will face difficulties in meeting its deficit requirements. The currency of Nigeria-Naira is currently seen stable and after depreciating by an average of 6. 3% per year in 2012-13 to N174:US$1, the naira is expected to moderate more gently in subsequent years, to N176:US$1 in 2016, though the currency has seen a continuous downslide when data is compared for the last three decades.

After the Banking crisis of 2009, the banking sector is skeptical on lending to private sector, however the confidence is returning. The political risk of the country is seen as high due to factions in the government and the rise in Islamist fundamentalism. Piracy is also a major phenomenon in the Gulf of Guinea which makes Nigeria’s coastline a risky shipping port. Nigeria declared a state of emergency in January 2012 in the northern parts due to a recent spate of terror attacks; however no civil war or major instability is expected in the short run.

The government has been accused of largely ignoring public grievances like unemployment, poverty, inequality in wealth and corruption. Unless the government steps up to address these issues and establish credibility there is risk of escalation. The President Mr. Good luck Jonathan has recently commissioned investigations into allegations of corruptions in the oil subsidies and replaced the Chief of the Police for failing to root out infiltration by the insurgents into the government offices.

However the effectiveness of these measures will depend on their enforcement. The future of the Nigerian economy therefore depends on stabilizing governance and enabling the parliament to unlock major reforms in the Oil and Gas sector. References 1. Economic Intelligence Unit – (http://country. eiu. com/Nigeria) 2. CBN Monetary Survey 3. Exchange Rates – (http://www. exchangerates. org. uk/) 4. Shadow Economy Reference – (http://news. bbc. co. uk/) 5. Currency Reference – (http://www. cenbank. org/)

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Leadership and Performance

CHAPTER ONE (1) INTRODUCTION 1. 1Background of the Study Globally, educating a nation remains the most vital strategy for the development of the society throughout the developing world (Aikaman & Unterhalter, 2005). Many studies on human capital development concur that it is the human resources of a nation and not its capital or natural resources that ultimately determine the pace of its economic and social development. Since education is an investment, there is a significant positive correlation between education and economic-social productivity.

When people are educated, their standards of living are likely to improve, since they are empowered to access productive ventures, which will ultimately lead to an improvement in their livelihoods. The role of education therefore, is not just to impart knowledge and skills that enable the beneficiaries to function as economies and social change agents in society, but also to impart values, ideas, attitudes and aspirations important for natural development.

In spite of the government initiatives in improving access, equity and quality of education, the secondary sub-sector continues to face challenges, particularly the low participation rates, low transition rates from primary to secondary and from secondary to tertiary (particularly to universities), as well as gender and regional disparities. From the researches that have been conducted on the impact of the government efforts to improve access equity and quality on performance indicate that most public schools have a lot of wastage, very poor performance in national examinations and poor learner preparation to face the world after school.

It has become alarming since the number of secondary school graduates from public day and boarding schools exit without entry grade to university is increasing day by day. This has increased crime rate, drug and substance abuse, immorality and cases of HIV and AIDS on the increase. It is, on this backdrop that the research endeavors to establish reasons why even when the Government has done so much to increase access, equity and quality to education still good performance remains for a few secondary chools (without the district) and many Kenyan children are still coming out of school with poor grades that can not help them move to the next level or get meaningful training. How can the problem be remedied and which adjustments need to be made. To this end, this proposed research will analyze the effect of management or leadership styles of the principal on the teachers and students performance. The theoretical framework adopted for this study is derived from the systems theory of organizations, which emerged as part of an intellectual ferment following the World War II, although its roots are much are much older.

Its founder, Ludwig von Bertalanffy, was concerned about growing compartmentalization of knowledge and argued that certain general ideas could have relevance across broad spectrum of disciplines: that despite obvious differences among the many kinds of organizations, they share very general characteristics and that is important to discover what they are(Hong et al. , 2004). The systems theory cuts across all the four paradigms of management thoughts, for every organization that produces output in a system of some of sort (Katz & Kahn, 1966).

And an organization, including a school, regardless of its size and purpose, and the management perspective adopted not withstanding, basically concerned with relationships, structures and interdependence rather than just constant attributes (Katz & Kahn, 1966). This study will be modeled on the postulates of systems theory because schools, like other organizations, are always in constant exchange with the larger society. Rosemary as cited in BPP (1999) defines management as ‘‘the art of getting things done through others’’ (p. 6). Fabunmi (2001), however, defines management ‘‘as the coordination of all the resources of an organization through the process of planning, organizing, directing, and controlling in order to attain organizational objectives’’ (p. 12). Resser (1973), on the other hand asserts that management is the utilization of physical and human resources through cooperative efforts, which is accomplished by performing the functions of planning, organizing, coordinating, directing and controlling.

By management styles, I refer to, new leadership and management approaches in order to enhance efficiency and effectiveness. Improved efficiency is achieved through management reforms; raising the learner teacher ratio, increasing teachers’ time on task, reducing repetition and improving accountability (Nsubuga, 2003). Leadership at work in education institutions thus needs to be a dynamic process where an individual is not only responsible for the group’s tasks, but also actively seeks the collaboration and commitment of all the group members in achieving group goals in a particular context (Cole, 2002).

Leadership in that context pursues effective performance in schools, because it does not only examine tasks to be accomplished and who executes them, but also seeks to include greater reinforcement characteristics like recognition, conditions of service and morale building, coercion and remuneration (Balunywa, 2000). It is this scenario that the researcher needs to establish whether it is practiced in Nyamira North District and if it is, what is its impact on the teacher and student performance This is also described by Sashkin and Sashkin (2003) as visionary leadership.

However, according to them, the concept of leadership that matters is not being limited to those at the top of the organization such as the chief executive officer or principal/head teacher, but depends on certain characteristics of the leader. It involves much more than the leader’s personality in which leadership is seen as more of mutating followers to achieve goals (Shashkin, 2003:2). This is supported by Lav Tzu (as reported in Shashkin, 2003:7) that good leadership commits to doing less and being more.

However, Cole (2002) defines leadership as inspiring people to perform. Even if an institution has all the financial resources to excel, it may fail dismally if the leadership does not motivate others to accomplish their tasks effectively. It is therefore this consideration that has made it necessary to determine the impact of the management or leadership styles on the teacher and learner performance in secondary schools in Nyamira North District of Nyamira County. . 2STATEMENT OF THE PROBLEM Although it is the Kenyan government’s policy to ensure the delivery of quality education in secondary schools in Kenya, performance, particularly in Nyamira North District has remained poor, despite the various interventions by policy makers and implementers. Such a situation is alarming, bearing in mind that secondary education play a pivotal role in the development of any country.

Equally important, are the overarching policies of Kenya’s education, which strongly emphasize the importance of science education in attainment of vision 2030. Scholars, policy makers and school managers have resolved to address the poor academic performance in secondary schools in Nyamira North District by conducting research on its would be antecedents such as a lack of instructional materials, ensuring quality teachers, admitting good students, remuneration and the motivation of teachers, improving discipline and community participation in schools.

Nevertheless, all the above studied and recommendations implemented there is still poor academic performance in our public secondary schools which makes it necessary to make a study on the management or leadership styles adopted and the impact of them on teachers and students performance. Hence this study is intended to investigate the relationship of head teachers’ leadership or management style and the performance of secondary schools in Nyamira North District.

It is deemed that an investigation in this area would shed light on the factors affecting performance and in particular the effect of leadership /management styles on school performance. 1. 3The purpose of the Study The purpose of this study is to establish to what extent the leadership/management styles adopted by principals have influence on the teacher and school’s performance Nyamira North District, using cross – sectional survey design with the aim of examining how leadership styles adopted by school principals influence the schools overall performance in secondary schools in Nyamira North District.

Leadership styles will be characterized by behavioural tendencies, and characteristic methods of a person in a leadership position. An important dimension of leadership style is the extent to which the leader is willing to delegate responsibility and encourage input from followers. Another basic dimension is the extent to which a leader is task-motivated (concerned with defining goals and the means to achieve them) or relationship-motivated (concerned with supporting and encouraging subordinates).

A distinction can also be drawn between the charismatic leader, who relies on his or her personal qualities to inspire followers, and the bureaucratic leader, who depends on his or her position in the hierarchy and an established set of rules and procedures. In particular the study will determine and describe the effects of the various leadership styles (the authoritarian or autocratic leader, democratic leader, transformational leader, situational or contingency and laissez-faire leader) adopted by principals on teachers and student performance. 1. 4Specific objectives

The study will be guided by the following specific objectives: a)To establish the relationship between the demographic characteristics of principals and teachers and school performance. b)To establish whether performance in Nyamira North District secondary schools is dependent on the management or leadership styles c)To establish whether performance in secondary schools in Nyamira North District is dependent on the autocratic leadership style, democratic leadership style, transformational leadership style, situational or contingency leadership style of school head teachers. )To elicit the viewpoints of head teachers, teachers and students on the preferred leadership styles. e)To make recommendations for the improvement of schools on the basis of an analysis of leadership styles. 1. 5Research Questions/Hypotheses The guiding questions will be: 1. What is the relationship between the demographic characteristics of principals and teachers and school performance? 2. What is the relationship between management styles of principals and staff performance?

A case study of secondary schools in Nyamira North District (Nyamira County). 3. Is the performance in secondary schools in Nyamira North District dependent on the autocratic leadership style, democratic leadership style, transformational leadership style, situational or contingency leadership style of school principals? 4. What are the viewpoints of principals, teachers and students on the preferred leadership styles? 5. What recommendations can be made for the improvement of schools on the basis of an analysis of leadership styles?

Hypotheses 1. The demographic characteristics of principals influence teachers’ and student academic performance 2. There is positive relationship between management styles of principals and staff, and student academic performance. 1. 6Significance of the study While some may still ascribe to the old adage that ‘leaders are born, not made’, there remains a societal responsibility to provide school leaders with the skills and practices needed to orchestrate schools in a way that can maximize sustained achievement for all students.

The continued research on behaviors and practices of leaders (Fullan, 1985; Murphy & Hallinger, 1992) remains important in the light of the changing role of the principal. The findings from the study would help to augment and enrich theories and principles on school leadership. It would also have a direct impact on the future training of school leaders and teacher leaders. Data generated from this study could serve as a practical framework for the Ministry of Education, or other training agents and higher institutions, to plan, organize and provide leadership-training program for school leaders and prospective leaders.

The study could also be important for school leaders as the findings can help them take heed of their leadership behavior and become more sensitive to the process and importance of human interaction. The findings from this study may offer more insights and serve as a critical friend in academia, encouraging principals to reflect, break out of their traditional practices, raising consciousness, and questioning deeply entrenched assumptions. Hopefully, all principals would ultimately fulfill their leadership dream, and lead the schools in the direction as Bath (in Fullan, 1997) puts it, ‘you can lead where you will go. 1. 7Limitations and Delimitations of the Study This study will be concerned with effects of leadership or management styles on teacher and learners performance. It will be conducted in Nyamira North District (Nyamira County) between September 2011 and December 2011 using cross – sectional sample survey design and a sample of 25 secondary schools will be selected from 43 secondary schools in the district. Data will be collected by the researcher using questionnaires, interviews and document analysis techniques. The following are limitations of the proposed study. The study will include public secondary schools in Nyamira North District. Therefore, the results of this study may not be generalized to private schools. •It will not be possible to cover the opinions of parents and other stake holders in this district because tracing them will require considerable time, resources and other logistics Though only public secondary schools in Nyamira North District will be included in the study, nevertheless, Nyamira North is typical of many districts with regard to recent emphasis on school reform and school improvement projects.

Therefore, the results of this study may apply to other, similar district of the county and Kenya at large. 1. 8Theoretical and conceptual frameworks The theoretical framework adopted for this study is derived from the systems theory of organizations developed by Ludwig Von Bertalanffy in the early 1950s. It emerged as part of an intellectual ferment following the World War II, although its roots are much are much older. The systems theory has had a significant effect on management science and understanding organizations.

A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. A system can be looked at as having inputs (e. g. , resources such as raw materials, money, technologies, and people), processes (e. g. , planning, organizing, motivating, and controlling), outputs (products or services) and outcomes (e. g. , enhanced quality of life or productivity for customers/clients, productivity). Systems share feedback among each of these four aspects of the system.

The systems theory is an alternative to the classical and neo – classical organizations theories which the researcher felt cannot suffice because of their emphasis on schools as fragmented and closed social units independent of external forces (Baker 1973). The only meaningful way to study an organization (school) is to regard it as a system. Thus schools should be managed more like organizations where educational programmes are innovated and re – innovated to realize the importance each part makes to the whole, and the necessity of eliminating the parts that make negative contributions.

With the development of the various educational disciplines and departments, considerable overlap is inevitable among the different fields. The proliferation of specialization, as in many branches of education, also leads to further overlapping. Because of these interactions, schools are better studied as wholes rather than parts (Baker, 1973). Systems theory postulates that schools are like other on systems which of necessity engage in various modes of exchamge with the environment (Katz & Kahn, 1966).

The theory emphasizes the consideration of the relationships between the school and its environment as well as what goes on within the school (Hall, 1977). The systems theory is basically concerned with the problems of relationships, of structures and of interdependence, rather with the constant attributes of objects (Katz & Kahn, 1966). The fundamental concept in the general systems theory is the notion of emergence and interaction. As adapted in this study the systems theory holds that management actions influence the internal efficiency of a school.

That staffing and control of students’ admissions coordination of teaching and learning resources, school fees budgeting and leadership styles adopted in school influence the drop outs and repetition rates, and promotion rates and general climate in a school. In the application of the systems theory to this study on the effect of management/ leadership styles on teacher and student performance the variables will be identified as follows: 1. Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims (Koontz and Weihrich 1990, p. ). This basic definition means several things. First, as principals, carry out the managerial functions of planning, organizing, staffing, leading, and controlling. Secondly, managing is concerned with productivity – this implies effectiveness and efficiency. Effectiveness and efficiency is the ability of the school to keep or reduce, to as low as possible, the dropout and repetition rates, increase completion and promotion rates and to produce high outcomes that is good academic performance and no wastage.

It also ensures that students complete an educational cycle in the possible minimum time. 2. Thus, management refers to the development of bureaucracy that derives its importance from the need for strategic planning, co-ordination, directing and controlling of large and complex decision-making process. Essentially, therefore, management entails the acquisition of managerial competence, and effectiveness in the following key areas: problem solving, administration, human resource management, and school leadership.

First and foremost, management is about solving problems that keep emerging all the time in the course of an organization (school) struggling to achieve its goals and objectives. Problem solving will be accompanied by problem identification, analysis and the implementation of remedies to managerial problems. Second, administration involves following laid down procedures (although procedures or rules should not be seen as ends in themselves) for the execution, control, communication, delegation and crisis management.

Third, human resource management should be based on strategic integration of human resource, assessment of workers, and exchange of ideas between stakeholders, teachers and workers. Finally, school leadership should be developed along lines of interpersonal relationship, teamwork, self-motivation to perform, emotional strength and maturity to handle situations, personal integrity, and general management skills. However, in adopting the systems theory of organizations this study, the researcher is not ignorant of its shortcomings.

The interrelationships among parts of a system have to be recognized and understood by ‘all’ people involved. This theory also requires a shared vision so that ‘all’ people in the school have an idea of what they are trying to accomplish. It requires a cohesive effort from all participants, a task that is not easy to achieve especially where ‘all’ is involved. Conceptual frame work In the conceptual framework depicted in the figure above the management or leadership style is hypothesized to influence the teachers and student performance.

Management or leadership style is defined as having managerial competence and effectiveness in the following key areas: problem solving, administration, human resource management, and school leadership that is being able to carry out the managerial functions of planning, organizing, staffing, leading, and controlling and teacher and student performance as early syllabus coverage motivated staff reporting to work early and leaving work place late, no school drop outs, no repletion cases, there is increased completion rates and good academic results in national examinations.

The frame work postulates that managerial competence and effectiveness in leadership will affect the rate of drop outs, repetition, completion rates and academic performance of students in a school. However, this relationship may be modified by age, faith of the staff, background as well as families from which the staff comes from. Chapter Two (2) Literature review 2. 0Introduction This chapter discusses the literature related to the effect of management/leadership style on teachers and student performance.

It particularly focuses on the relationship between the demographic characteristics of principals and teachers and school performance, establish whether performance in Nyamira North District secondary schools is dependent on the management or leadership styles, establish whether performance in secondary schools in Nyamira North District is dependent on the autocratic leadership style, democratic leadership style, transformational leadership style and situational or contingency leadership style, elicit the viewpoints of head teachers, teachers and students on the preferred leadership styles and make recommendations for the improvement of schools on the basis of an analysis of leadership styles. These are considered the pillars of the study. In this chapter, the researcher reviews literature related to management/leadership styles and its effects on school performance. The review is conceptualized under the objectives and focuses mainly on autocratic leadership style, democratic leadership style and situational or contingency leadership style and their relationship with teachers and students performance. 2. 0 Transformational leadership Bush (2003) links three leadership models to his ‘collegial’ management model. The first of these is ‘transformational leadership’.

This form of leadership assumes that the central focus of leadership ought to be the commitments and capacities of organizational members. Higher levels of personal commitment to organizational goals and greater capacities for accomplishing those goals are assumed to result in extra effort and greater productivity. (Leithwood et al. 1999: 9). Leithwood (1994) conceptualizes transformational leadership along eight dimensions: • Building school vision • Establishing school goals • providing intellectual stimulation • Offering individualized support • Modeling best practices and important organizational values • Demonstrating high performance expectations • Creating a productive school culture • Developing structures to foster participation in school decisions.

Caldwell and Spinks (1992: 49–50) argue that transformational leadership is essential for autonomous schools: ‘Transformational leaders succeed in gaining the commitment of followers to such a degree that higher levels of accomplishment become virtually a moral imperative. In our view a powerful capacity for transformational leadership is required for the successful transition to a system of self-managing schools. ’ Leithwood’s (1994) research suggests that there is some empirical support for the essentially normative transformational leadership model. He reports on seven quantitative studies and concludes that ‘transformational leadership practices, considered as a composite construct, had significant direct and indirect effects on progress with school-restructuring initiatives and teacher- perceived student outcomes’ (p. 506).

The transformational model is comprehensive in that it provides a normative approach to school leadership, which focuses primarily on the process by which leaders seek to influence school outcomes rather than on the nature or direction of those outcomes. However, it may also be criticised as being a vehicle for control over teachers and more likely to be accepted by the leader than the led (Chirichello 1999). Allix (2000) goes further and alleges that transformational leadership has the potential to become ‘despotic’ because of its strong, heroic and charismatic features. He believes that the leader’s power ought to raise ‘moral qualms’ and serious doubts about its appropriateness for democratic organisations. Transformational leadership is consistent with the collegial model in that it assumes that leaders and staff have shared values and common interests.

When it works well, it has the potential to engage all stakeholders in the achievement of educational objectives. The aims of leaders and followers coalesce to such an extent that it may be realistic to assume a harmonious relationship and a genuine convergence leading to agreed decisions. When ‘transformation’ is a cloak for imposing leaders’ or governments’ values, then the process is political rather than collegial. 2. 2 The situational or contingency leadership style The situational theory stipulates that leaders are the product of given situations. Thus, leadership is strongly affected by the situation from which the leader emerges and in which he operates. The contingency theory is a combination of the Trait Theory and Situational Theory.

The theory implies that leadership is a process in which the ability of a leader to exercise influence depends upon the group task situation and the degree to which the leader’s personality fit the group (Sybil, 2000). 2. 3Autocratic leadership style The autocratic leadership style is also known as the authoritarian style of leadership. Power and decision-making reside in the autocratic leader. The autocratic leader directs group members on the way things should be done. The leader does not maintain clear channel of communication between him/her and the subordinates. He or she does not delegate authority nor permit subordinates to participate in policy-making (Smylie and Jack, 1990; Hoy and Miskel, 1992; Olaniyan, 1997). 2. 4Democratic style of leadership

The democratic style of leadership emphasizes group and leader participation in the making of policies. Decisions about organizational matters are arrived at after consultation and communication with various people in the organization. The leader attempts as much as possible to make each individual feel that he is an important member of the organization. Communication is multidirectional while ideas are exchanged between employees and the leader (Heenan and Bennis, 1999). In this style of leadership, a high degree of staff morale is always enhanced (Mba, 2004). Performance Performance is described in various ways. It is an act of accomplishing or executing a given task (Okunola, 1990).

It can also be described as the ability to combine skillfully the right behaviour towards the achievement of organizational goals and objectives (Olaniyan, 1999). Teachers’ job performance is described as the duties performed by a teacher at a particular period in the school system in achieving organizational goals (Obilade, 1999). It can also be described as the ability of teachers to combine relevant inputs for the enhancement of teaching and learning processes (Akinyemi, 1993; Okeniyi, 1995). However, Peretemode (1996) argued that job performance is determined by the worker’s level of participation in the day to day running of the organization. It is noted that employees behave differently under different situations. 2. Summary It is underpinned by the view that leaders should have an entitlement to appropriate preparation and support for their important and onerous role in leading educational change. To appoint school principals without specific preparation is a gamble, and we should not gamble with children’s education. The literature review tends to give reasons for the enhanced global interest in the role of school leaders. It assesses the differences among the various leadership/management styles, and argues that all are essential if schools and colleges are to thrive. It also emphasizes the evidence that effective leadership is critical to school improvement.

While the importance of leadership/management style is increasingly recognized, much less is known about which leadership behaviours are most likely to promote successful schooling. The study will examine the various models of leadership and assess the evidence of their effectiveness. There is great interest in ‘instructional leadership’ because of the widespread view that the main function of schools is to promote student learning. Transformational leadership is widely advocated because of its potential to harness stakeholder support for the school’s (or leader’s) vision but there is some concern that this may be a vehicle for imposing leaders’, or governments’, priorities on teachers, pupils and communities. These and other models that have been highlighted above are subject to scrutiny in this study. 2. 6 Conclusions

Principals’ can therefore encourage effective performance of their teachers by identifying their needs and trying to satisfying or meeting them. Supporting this argument, Owoeye (1999) asserted that variables of job performance such as effective teaching, lesson note preparation, effective use of scheme of work, effective supervision, monitoring of students’ work and disciplinary ability are virtues which teachers should uphold effectively in the school system. In this regard, the teachers’ performance can be measured through annual report of his/her activities in terms of performance in teaching, lesson preparation, lesson presentation, mastery of subject matter, competence, teachers’ commitment to job and extra-curricula activities.

Other areas of assessment include effective leadership, effective supervision, effective monitoring of students’ work, motivation, class control and disciplinary ability of the teachers. From the above researches done the effect of the leadership or management style adopted by principals in secondary schools has not been well researched on and as such not much is known whether it is the style the principals adopt that affects the performance standards or whether there are other issues in management in the secondary schools of Nyamira North District. There is a widespread belief that raising standards of leadership and management is the key to improving schools. Increasingly, this is linked to the need to prepare and develop leaders for their demanding roles.

While this is the main focus of this study, a prior question is the nature of leadership/ management in schools. Which leadership behaviours are most likely to produce favourable school and learner outcomes? The study intends to examine the main models of school leadership and from the research consider the evidences on their relative effectiveness in promoting school improvement. 3. 0 Methodology This chapter presents a detailed description of the research methodology. Methodology refers to the detailed procedure to be followed to realize the research objectives. Methodology include a description of the research design, sampling techniques, instructions as well as data techniques.

It describes in details what will be done and how it will be done. it comprises several sub-sections which are usually presented in the order given below. 3. 1 Research design This study will be conducted through correction research design. Correlation is a research design where the researcher determines whether or not and not to what extent an association exists between two or more paired and qualified variables. In this study the researcher will use semi structured interview method that places open – ended question constituting of various management and leadership styles assessment and the effect /impact it has on teacher and student performance.

The survey will be done in terms of their leadership and management styles that they use in school and the effect it has on teacher and student performance by means of percentile ratio of every management and leadership style and rank those from highest to lowest from within survey questionnaire. Correlation will enable the researchers to provide vigorous and replicable procedure for understanding relationship and determination whether and to what degree a relationship exists between quantifiable variables. The locale of the study will be Nyamira North District in Nyamira County 3. 2 Population and Sampling 3. 2. 1 Target /Accessible Population

The target population will consist of all 38 principals 360 teachers and 9000 student in Nyamira North District in Nyamira County has 38 secondary schools and they have constantly performed dismally in the national examination for the last 20 years. It is therefore considered appropriate for providing a focal point for the study of effect of leadership and management styles on the teacher and student performance. 3. 2. 2 Sample The sample will consist of heterogeneous respondents selected from the target population. 25 schools will be selected and from each selected school three categories of the target group will be targeted. These categories will be selected as one principal, 4 teachers and 12 students.

The size of the sample will be 425 respondents distributed as 25 principals, 100 teachers, and 300 students. This number 425 has been chosen using non-mathematical or convenience method determined at the discretion of the researcher, due to pressure of time that cannot allow for all the target population to be surveyed. 3. 2. 3 Sampling techniques This study will employ stratified sampling, random sampling, purposive sampling, and convenience sampling techniques. Stratified sampling technique will be used to select schools and the category of respondents to be included in the sample. Stratified sampling technique is a technique that identifies subgroups in the population and their proportions and select from each subgroup to form the sample.

It groups a population into separate homogenous subsets that share similar characteristics so as to ensure equitable representation of the population in the sample the sample. It aims at proportionate representation with a view of accounting for the difference in subgroup characteristics. The researcher is convinced that the target population is not uniform since mixed and single sex school and day and boarding schools do not necessary have similar characteristics, since even personnel in different departments within the same school environment may not always think similarly. As such the target accessible populations cannot be regarded as homogenous.

Stratified sampling technique will therefore be used to ensure that the target population is divide into different homogenous strata and that each strata is represented in the sample in a proportion equivalent to this size in the accessible population. Simple random sampling will be used to select a representative sample without bias from the target population this will ensure that each school and its population has equal and independent chance of being included in the sample. Purposive sampling will be used by the researcher consciously to decide who to include in the sample in terms of getting focused information. This will also help to save time and money in cases where the target population may be widely spread. 3. 3 Data Collection 3. 3. 1 Instructions

The study will use questionnaires, interviews, and document analysis as the main tools for collecting data. The selection of these tools have been guided by the nature of data to be collected, the time available as well as by the objectives of the study. The overall aim of this study is to establish the relationship between leadership and management styles on the teacher and student performance. The researcher is mainly concerned with views, opinions, perceptions, feelings and attitudes. Such information can best collected through the use of questionnaire and interview techniques (Bell, 1993; Touliatos &Compton, 1988) The researcher intends to use semi-structured instrument.

This will enable the researcher to balance between the quality and quantity of data collection and provide more information. This delicate balance between the quality and quantity of information is useful for a fuller explanation of the phenomena under investigation. Questionnaire will be used since the study is concerned with variables that cannot be directly observed such as views, opinions perceptions and feelings of the respondents. Such information are best collected through questionnaire (Touliatos &Compton 1988) the sample size is also quite large (510) and given the time constraints, questionnaire is the ideal tool for collecting data.

The target population is also largely literate and is unlikely to have difficulties responding to questionnaire items. 3. 3. 2 Research procedure Qualitative data will be collected from 425, respondents/interviewees/observant, from 9398 target population during the month of October 2011 using questionnaires, interviews, and document analysis. The data will be collected by the researcher himself because this will save time and lower the cost of collecting data. 3. 4 Quality Control The instrument will be piloted in the schools that will not be included in the study sample and modified to improve their validity and reliability coefficients to at least 0. 70. Items validity and reliability coefficients of at least 0. 0 are accepted as valid and reliable in research (Kathuri &Pals, 1993) Validity is the extent to which research results can be accurately interpreted and generalized to other populations. It is the extent to which research instruments measure what they are intended to measure (Oso &Onen, 2005). To establish validity the instrument will be given to two experts to evaluate the relevance of each item in the instruments objectives. The experts will rate each item on the Likert scale: very relevant (4) quite relevant (3) somewhat relevant (2) and not relevant (1). Validity will be determined using content validity index (C. V. I). C. V. I items rated 3or4 by both judges divided by the total number of items in the questionnaire. 3. 5 Data Analysis Chi-square (?? test of goodness – of – fit will be used to analyze the data. Chi – square test is a statistical technique used to compare the different between categorical frequencies drawn from population with a uniform distribution which all alternative responses are equally likely chi-square(?? ) test of goodness – of – fit will be used because the data that the researcher intends to collect is of the type “one-variable-many levels” and are basically categorical frequencies of the description of views, opinions ,perceptions, feelings and attitudes of the respondents on the effects of management and leadership styles of principals on teacher and student performance.

Chi-square is the most sustainable here since it will enable the researcher to identify whether there is any significant difference in the frequencies of the alternative responses. Data from open-added questionnaire items, interviews and group discussions will be grouped under broad themes and converted into frequency counts. All data will be analyzed at a level of significance of 95% or ? = 0. 05) the degrees of freedom depending on the particular case as will be determined. This value (? = 0. 05) has been chosen because the sample size has been adopted from figures calculated on the basis of 0. 95 level of confidence. 3. 6 Assumption and Limitations The following factors; leaner characteristics, and teacher qualifications are expected to influence the DV.

The extraneous variable however many not be adequately controlled because the respondents are found in different institutions that are out of control of the researcher. But they will not have a significance effects on the results because the respondents opinions, views perceptions, feelings attitudes will not be influenced by EV. It is therefore assured that they influence will remain very insignificance. The major limitations of this study are: the reliability and validity of the data collected due to the various views, opinions, feelings and attitudes that can emotionally be influenced. If all factors were kept constant, the researcher should adequately explain to the respondents to be very objective in answering.

But this was the most suitable technique in the circumstances the data to be collected involves what can not easily be measured. 3. 7 Ethical Considerations. The major ethical problem in this study is the privacy and confidentiality of the respondents. Obtaining lists and files and respondents giving their opinion, feeling and attitudes in writing the questionnaire which itself is an infringement. However the respondents will have the freedom to ignore items that they do not wish to respondent to. Reference and Biography: 1. Bell, J (1993) how to complete your research project successfully New Delhi: UBSPD. 2. Creswell, J. W (1994) Research Design Qualitative and Quantitative approaches . California: SAGE Publications, Inc. 3. Kathuri, N. J & Pals A.

D (1993) introduction to educational research Egerton: Egerton university education Burk services. 4. Onen, D (2007). The management and the internal efficiency of private secondary school in Uganda. 5. Touliatos, J. S &Compton, N. H (1988). Research methods in human ecology /home economics. Iowa State University Press/AMES. 6. Willis Yuko Oso and David Onen a General Guide to Writing Research Proposal and Report (2nd edition 2008) Makerere University Printery 7. John Aluko Orodho,Phd. Elements of Education and Social Science Research methods. Kanejza Publishers, Maseno Kenya. 8. John Aluko Orodho,Phd. Techniques of Writing Research Proposal and Reports in Education and Social Sciences. Kanejza Publishers, Maseno Kenya

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Effect of Training on Staff Productivity in Kenyan Banks

EFFECT OF TRAINING ON STAFF PRODUCTIVITY IN KENYAN BANKS: A CASE OF KENYA COMMERCIAL BANK (KCB) By Abong’o Chacha A thesis presented to the School of Business and Economics of Daystar University Nairobi, Kenya In partial fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION In Strategic Management and Human Resource Management April 2012 Approval EFFECT OF TRAINING ON STAFF PRODUCTIVITY IN KENYAN BANKS: A CASE STUDY OF KENYA COMMERCIAL BANK (KCB) By Abongo Chacha

In accordance with Daystar University policies, this thesis is accepted in partial fulfillment of requirements for the Master of Business Administration degree. Date _________________________________________________ Mr. Thomas Koyier, Supervisor _________________________________________________ Prof. David Minja, Reader. DECLARATION EFFECT OF TRAINING ON STAFF PRODUCTIVITY IN KENYAN BANKS: A CASE STUDY OF KENYA COMMERCIAL BANK (KCB). I declare that this thesis is my original work and has not been submitted to any ther college or university for academic credit. Signed: ____________________________Date: ________________ Abongo Chacha ABSTRACT The objectives of the study were to analyze the effect of training on staff productivity in Kenyan banks. This involved determination of the effectiveness of training methods and their effects in employees’ productivity. The study also aimed to recommend the best strategies in employees training. This study covered 15 branches of one of the major banks in Kenya (Kenya Commercial Bank, KCB).

Stratified sampling method was applied to select the bank branches and purposive sampling was applied to select 80 respondents of the study. The survey questionnaire was utilized in the data collection. The data collected was therefore descriptive in nature. Descriptive statistic technique and multiple regression analysis were applied in the analysis of the collected data. The major findings of the study showed that the common employees’ training strategies in KCB were on-the-job training, e-learning training, class-room training and workshop training.

The effectiveness of the training methods applied by the KCB was relatively high as evidenced by the effectiveness of the detailed content of e-learning programs; well organized e-learning programs; importance of on-the-job training programs in employees’ deeper understanding of various concepts in the banking services for instance; On-the-job training methods enabled the employees to learn about the rules and principles of work, courtesy, manners and techniques of handling interpersonal relations.

The results also show that the current training methods applied at the KCB have been effective at great extent in promoting productivity of the employees. This means that there is improved work output per time, efficiency, accuracy and more skills are developed among the employees. The most effective training strategies in enhancing productivity of the employees were deemed to be on-the-job training, seminars/ workshop training and e-learning while class-room training showed less significant effect in employees’ productivity. TABLE OF CONTENTS DECLARATIONiii ABSTRACTiv

TABLE OF CONTENTSv LIST OF FIGURESviii LIST OF TABLESix CHAPTER ONE1 INTRODUCTION AND BACKGROUND OF THE STUDY1 Introduction1 Background of the Study1 Profile of Kenya Commercial Bank (KCB)8 Statement of the Problem9 Purpose of the Study10 Objectives of the Study10 Research Questions10 Justification11 Significance of the Study12 Assumptions12 Limitations12 Definition of Terms, abbreviations and acronyms13 Chapter Summary13 CHAPTER TWO14 LITERATURE REVIEW14 Introduction14 Theoretical Framework14 Human Capital Theory14 Kirkpatrick’s learning and training evaluation theory16

Effects of Training on Employee Productivity17 Training and Employee performance18 Training and Employee Commitment20 Training Methods and Employee Productivity21 Training and Employee Effectiveness24 Training Quality and Performance27 Models for Measuring the Effectiveness of Training30 Strategic Approach to Training and Development33 Empirical Review37 Conceptual Framework39 Chapter Summary41 CHAPTER THREE42 RESEARCH METHODOLOGY42 Introduction42 Research Design42 Population43 Target and Accessible Population43 Sample Size44 Sampling Techniques44 Sampling Frame48 Type of Data49

Data Collection Instruments51 Pre-testing52 Data Collection Procedure52 Data Analysis53 Chapter Summary54 CHAPTER FOUR55 DATA ANALYSIS AND INTERPRETATION55 Introduction55 Response Rate55 Employee Training Strategies used by KCB57 Class room training57 E-learning programs62 On the job training67 Effectiveness of the Employees Training methods used by KCB71 Effectiveness of training methods on employee productivity at KCB72 Best training strategies for maximum employee productivity at KCB73 Regression Analysis74 Chapter Summary77 CHAPTER FIVE78 SUMMARY OF THE FINDINGS, CONCLUSIONS AND RECOMMENDATIONS78

Introduction78 Summary of the Findings78 Employee Training Strategies78 Effectiveness of Training Methods79 Best training strategies for maximum employee productivity at KCB79 Conclusion79 REFERENCES81 APPENDICES89 Appendix A: Research Questionnaire89 Appendix B: Timeline96 Appendix C: Budget98 LIST OF FIGURES Figure 4. 1: Age56 Figure 4. 2: Education level56 Figure 4. 3: Work experience57 Figure 4. 4: Extent to which class room training affect employees’ commitment in KCB58 Figure 4. 5: Extent to which classroom training affect employee motivation in KCB59 Figure 4. : Extent to which classroom training affect employees’ self efficacy in KCB60 Figure 4. 7: Extent to which classroom training affect employee productivity at KCB61 Figure 4. 8: Extent to which e-learning programs affect employees’ commitment in KCB63 Figure 4. 9: Extent to which e-learning programs affect employees’ motivation in KCB64 Figure 4. 10: Extent to which e-learning programs affect employees’ self efficacy in KCB65 Figure 4. 11: Extent to which e-learning programs affect employee productivity at KCB66 Figure 4. 12: Extent to which on job training programs affect employees’ commitment at KCB68 Figure 4. 3: Extent to which on the job training programs affect employee motivation in KBC69 Figure 4. 14: Extent to which the job training programs affect employees’ self efficacy in KCB70 Figure 4. 15: Extent to which on the job training programs affect employee productivity at KCB70 LIST OF TABLES Table 3. 1: Sampling Frame48 Table 4. 1: Extent of agreement of the respondents with class room training as a strategy in employee training. 57 Table 4. 2: The level of agreement on of the respondents on E learning programs62 Table 4. 3: The level of agreement on of the respondents on on job training67 Table 4. : The level of rating of the respondents on effectiveness of training methods71 Table 4. 5: The level of agreement on of the respondents on effectiveness of training methods72 Table 4. 6: The extent to which the following training methods affect employee productivity at KCB72 Table 4. 7: The level of agreement of the respondents on statements on the best training strategies for maximum employee productivity at KCB73 Table 4. 8: Coefficients of the Independent Variables75 Table 4. 9: Analysis of Variance76 Table 4. 10: Squared Multiple Correlation Coefficient, R276

CHAPTER ONE INTRODUCTION AND BACKGROUND OF THE STUDY Introduction This chapter presents a brief introduction as well as historical background of employee training. An overall background of the study has been defined clearly, problem statement, objectives, assumptions, and limitations. Key terms have been defined and operationalized. Further the researcher has shown clearly why the topic has emerged as a topic of importance to the researcher. Background of the Study Nadeem (2010) defined training as the process of transmitting and receiving information to problem solving.

This implies that training is for specific purpose. Omole (1991) sees training as any process concerned with the development of aptitudes, skills and abilities of employees to perform specific jobs with a view to increase productivity. An organisation may have employees with the ability and determination, with the appropriate equipment and managerial support yet productivity falls below expected standards. The missing factor in many cases is the lack of adequate skills, and knowledge, which is acquired through training and development.

Commenting further Iboma (2008) is of the opinion that effective training can change the entire view of workers in an organisation and make the firm more productive as new skills and attitudes are developed by workers. Looking at the indispensability of training and development to an industrial set up, Ladipo-Ajayi (1994) observed that both are very demanding ventures in any organization because people commit huge resources to them. Training is one of the most important strategies for organizations to help employees gain proper knowledge and skills needed to meet the environmental challenges (Goldstein and Gilliam, 1990).

Employee training represents a significant expenditure for most organizations. Tella and Popoola (2007) relating training to library work stated that it is as an essential strategy for motivating workers in the library as a service organization. For the Librarian or information professional to have opportunities for self-improvement and development to meet the challenges and requirements to perform a task there is the need to acquire the needed skills suitable for the work at hand. Institute for Work & Health (2010) defines training as planned efforts to facilitate the learning of specific competencies.

These competencies typically consist of specialized knowledge, skills and behaviours needed for success in a particular environment. Training methods can range from a one-time dissemination of information to intensive programs administered over a long period of time. Njavallil (2007) did study training of bank employees by doing a comparative study between new generation banks and public sector banks in India. By then, there had come about many challenges in the banking sector following the new economic policy that was introduced during the nineties.

The emerging business profile of banks included newer financial services, personal investment counseling, factoring, venture capital and possibly consultancy research services. This called for new knowledge, skills and attitudes and training systems to stand up to the challenges that demanded for changes in the approaches to training. The study found that significant differences existed between the two categories of banks regarding the training provided to its employees. The differences were related to certain aspects.

Based on the study it was inapt to say that the training approach of a particular type of bank was significantly enhanced compared to the other. Sulu (2011) studied motives for training in the Nigerian banking industry focusing on the motives for training using the Nigerian banking industry as a case study . The study relied on both qualitative and quantitative analysis of data. The entire staff of the 25 commercial banks as at 2007 in Nigeria was the population of the study. The results of the analysis showed that banks saw training as important factors, as well as aving motives for investing in training. These motives included – new technology; productivity; responding to skills deficiencies; moral duty; new hire request; and staff request. Some of the recommendations based on the findings include – training should be seen as one of the most important strategies for organizations to help employees gain proper knowledge and skills needed to meet the environmental challenges; it must also be noted that, training though primarily concerned with people, is also concerned with technology, the precise way an organization does business.

Ghebrecristos (1983), studied training methods and techniques in an organization using a case study of the Commercial Bank of Africa Ltd. Nairobi, Kenya. From the findings, CBA used several training methods and techniques in building the employee capability. They made use of classroom teaching, on the job training and seminars and workshops. Ling (2007) notes that training is viewed as an expensive investment for a business organization and is often neglected during recession.

The author cites a reason as the value and contribution could not be effectively ascertained. Ling (2007) mentioned that in most studies relating to training effectiveness, the focus was on establishing the relationship between training system or practices or factors (individual and organizational) with training effectiveness, with emphasis on objective, content, organizational factors, expenditures, duration of training, coverage of employees, delivery methods, profitability, growth and overall organization performance.

IAEA (2003) states that while it is abundantly clear that training can provide added value, a measured, isolated, determination of training effectiveness is difficult because personnel performance depends not only on training, but also on many other factors such as supervision, procedures, job aids, pre-job briefings, management expectations, and the experience and motivation of the workforce. The measurement of training effectiveness i. e. how well the training inputs are serving the intended purpose has also elicited wide reviews.

IAEA (2003) identified three kinds of training outputs that organisations need to measure. They are: relating to course planning, relevance, comprehension and whatever goes on in the teaching programme and the environment; the utilisation of what is learnt on the job i. e. transferring the classroom learning to the job in terms of skills, competencies, decision making, problem-solving abilities and relationships and the like; and the changes in the mind set such as work related attitudes, values, interpersonal competencies and personal attributes.

Winfred, Winston, Edens and Bell (2003) noted that the continued need for individual and organizational development can be traced to numerous demands, including maintaining superiority in the marketplace, enhancing employee skills and knowledge, and increasing productivity. Training is one of the most pervasive methods for enhancing the productivity of individuals and communicating organizational goals to new personnel. The authors note that in 2000, U. S. organizations with 100 or more employees budgeted to spend $54 billion on formal training.

Given the importance and potential effect of training on organizations and the costs associated with the development and implementation of training, it is important that both researchers and practitioners have a better understanding of the relationship between design and evaluation features and the effectiveness of training efforts. Sahinidis and Bouris (2008) noted that insufficient knowledge and skills which can be imparted through training can cause employees not to feel motivated and lack commitment.

Abbas and Yaqoob (2009) noted that training is designed to skill employees so they can perform well. This can be done by formally developing training programs or informally through on job training. Insufficiency in knowledge and skills may result into conflict with organizational goal achievement and eventually affecting employee performance. The authors concluded that training influences employee performance Olaniyan and Ojo (2008) note that the effectiveness and success of an organization lies on the people who form and work within the organization.

Consequently, for the employees in an organization to be able to perform their duties and make meaningful contributions to the success of the organizational goals, they need to acquire the relevant skills and knowledge. In appreciation of this fact, organization like educational institution, conduct formal training programmes for the different levels of their employees. Institute for Work & Health (2010) identified two broad approaches to research on training effectiveness. One approach employs triangulation of multiple data sources and methods to gather data from end users of training.

This method combines qualitative data (e. g. from key informant interviews, focus groups and observations) with various forms of quantitative data (e. g. from controlled study situations. These data are then used to assemble valid co-relational arguments for interpretation of results. The other approach to studying the effectiveness of training explores cause and effect relationships that are pertinent to the learning process or the application of learned material within the workplace. These studies use experimental designs to investigate factors related to the training process itself.

They use measurable outcomes affecting individuals or work teams and, if feasible, gather data related to the impacts of training on the organization or relevant industry. Haslinda and Mahyuddin (2009) examined the effectiveness of training in the public sector using training evaluation framework and transfer of training elements. The findings of this study suggest that public service employees were evaluated at all five levels of evaluation, namely, the reaction, learning, behavior change, results and transfer of training levels.

Factors that can affect the effectiveness of training in the public sector include lack of support from top management and peers, employees’ individual attitudes, job-related factors and also the deficiencies in training practice. The study was done in Kuala Lampur. A number of factors have been identified that influence the effectiveness of training in an organization. Haslinda and Mahyuddin (2009) identified the human resource policy of training, employees’ attitude and motivation, and the commitment of top management to the training and development as some of the key factors.

Pfeifer, Janssen, Yang and Backes-Gellner (2011) observe that training can serve as a screening device without increasing individual productivity, i. e. , the firm learns about abilities and skills of workers and can promote the best fitting (most productive) worker to the next job in the hierarchy. They also note that training might, on the other hand, indeed increase individual productivity by teaching skills and knowledge that are important to fulfil tasks at higher job levels.

Gyes (2008) uses company-level panel data on training provided by employers in order to estimate its effect on productivity and wages in the food industry in Belgium. The productivity premium for a trained worker was estimated at 23%, while the wage premium of training is estimated at 12%. The study concluded that, by training its workers, a company can realise an extra added value per worker amounting to €1,385 higher than the cost of the required training. Konings and Vanormelingen (2009) confirmed and expanded their analysis to the whole Belgian private sector.

Again, the findings showed that training has a positive effect on productivity and wages. The marginal product of a trained worker is on average 23% higher than that of an untrained worker while wages increase by 12% as a result of training. Among the manufacturing subsectors, the largest productivity gains can be found in the chemicals and rubber and plastic industries. Finally, the study’s authors found no differential impact of training on the productivity of male versus female workers; however, wages increase more in response to training for women than for men.

Almeida and Carneiro (2006), using a panel of about 1,500 large Portuguese manufacturing firms between 1995 and 1999, found that an increase of 10 hours per year in training per worker leads to an increase in productivity of about 0. 6 per cent. Colombo and Luca Stanca (2008) investigated the effects of training on employee productivity using a unique nationally representative panel of Italian firms for the years 2002 to 2005 and found that training activity has a positive and significant effect on productivity at firm level.

Training also has a positive and significant effect on wages, but this effect is about half the size of the effect on productivity. Within occupational groups, the effect of training on productivity is large and significant for blue-collars, but relatively small and not significant for white-collars. Profile of Kenya Commercial Bank (KCB) The history of Kenya Commercial Bank dates back to 1896 when its predecessor, the National Bank of India, opened a small branch in the coastal town, Mombasa. In 1958 Grindlays Bank of Britain merged with the National Bank of India to form the National and Grindlays Bank.

In 1970, the Government of Kenya acquired 60% shareholding in National and Grindlays Bank and renamed it the Kenya Commercial Bank. In 1976, the Government acquired 100% of the shares to take full control of the largest commercial bank in Kenya. The Government has over the years reduced its shareholding in the Bank to the current 26% with the public owning the remaining 74% (KCB, 2011). The Kenya commercial bank has four subsidiaries; a wholly owned subsidiary, Savings and Loan (K) Ltd. was acquired in 1972 to provide mortgage finance.

In 1997, another subsidiary, Kenya Commercial Bank (Tanzania) Limited was incorporated in Dar-es-salaam, Tanzania to provide banking and financial services and to facilitate cross-border trade within the East African region. Since inception, the Kenya Commercial Bank Group has endeavoured to provide quality and customer friendly services geared towards meeting the ever-changing customer needs. This has ensured consistent growth in customer deposits that have, in turn, provided a strong reservoir for steady growth in customer borrowings every year. Shares in KCB have, until 2004, historically underperformed most other publicly listed banks.

The KCB share price has recovered dramatically since elections in 2004. KCB has more than 170 branches throughout Kenya, making it the largest banking network in the region. It has the largest number of own-branded ATMs in Kenya. Since 2004 most of the branches in Kenya have been rebranded as part of a wider corporate branding exercise. Since incorporation, KCB has achieved tremendous growth to emerge as a leader in Kenya’s banking and financial sector. In 1970, the bank had 32 full- time branches, of which 25 were located in rural areas, five in Nairobi and two in Mombasa.

Today, the KCB Group has the widest network of outlets in the country, comprising 170 full-time branches all of which represent over 55% of the total banking outlets in Kenya. Of the total outlets, 80% are located in the rural areas, with representation in all administrative districts. Statement of the Problem Training is an integral part of every company’s agenda. Because of the implications of training, it is important to have training that is effective. Studies have proven that more costly but effective training can save money that is wasted on cheap but inefficient training (Ginsberg and McCormick, 1998).

Unfortunately, there is no rule of thumb method of effective training. Methods of training have to be analyzed and studied before companies can rely on them to train a competent workforce. Kenya commercial bank like any other organization is in the business of providing services to its customers. For the bank to effectively serve its customers, it has to have well trained employees who ensure quality service delivery. It is very important to have a needs analysis to determine which training method works best.

There are several studies in this area in the banking industry in Kenya limited studies that have studied the impact of employee training on organizational productivity. There are numerous factors to be considered in making training method decisions. Factors such as training objectives (what is aimed to be learned), cost, and trainee demographics are some important issues to be considered. The problem is to determine the effect of training on staff productivity. Purpose of the Study The purpose of this study is to establish the effect of training on staff productivity in Kenyan banks.

The study is important in developing information necessary to lead organizations on the importance of training. Objectives of the Study The study will be guided by the following objectives: 1. To determine the strategies used by KCB in employee training 2. To determine the effectiveness of training methods used by KCB 3. To determine the effectiveness of training on employee productivity at KCB 4. To recommend the best training strategies for maximum employee productivity at KCB Research Questions 1. What training strategies are used by KCB? 2. What effect do the training methods have on employee productivity at KCB? . How does employee training affect employee productivity at KCB? 4. What are the best employee training strategies for maximum employee productivity at KCB? Justification Training has become an increasingly critical area of management for companies to enhance service quality, reduce labor costs, and increase productivity (Enz & Siguaw, 2000). Training programs can also promote teamwork; improve staff attitudes and self-awareness (Conrade, Woods & Ninemeier, 1994). Organizations must therefore focus on these different aspects in order to maintain a competitive edge in their respective industries.

Organizations should remember that training begins once an employee joins the organization and should continue throughout their tenure with the organization. Training can also be provided by everyone i. e. all employees are potential instructors and students Kenya Commercial Bank has been selected due to its large size, presence and location across the regions. In addition it has a dedicated training centre at Karen (KCB Leadership Centre) from which courses are developed and imparted to staff. Training is seen as a fundamental and effectual instrument in successful accomplishment of the bank’s goals and objectives.

Training not only improves staff resourcefully, but also gives staff a chance to learn their job virtually and perform it more competently hence increasing bank’s productivity. The ultimate implication of staff training can be noted in the bank’s bottom line. A study to evaluate the effect of training on staff productivity at KCB is thus necessary. Significance of the Study This study aims to explore the effect of training on staff productivity in Kenyan banks. KCB The study will deepen the understanding between perception and expectations as well as improve the knowledge of staff productivity by banks.

Further it will address the fundamental aspect of the correlation that necessitates KCB to undertake training to improve the productivity of its staff. Scholars This research will provide information to scholars as well as form a basis for further research to be conducted, here in Kenya as well as world-wide, regarding the effect of training on staff productivity in Kenyan banks. Assumptions The following is assumed: 1) All staff will be available for interviews. 2) Respondents are truthful when responding to questions on the survey. 3) Training is a pressing issue for many staff. Limitations

The limitations faced or anticipated are: First, due to the study limiting itself to one bank, the generalization of results can be challenged. Secondly, even though there will be a concentrated effort to get the questionnaire into the hands of all staff, there is no guarantee that the individuals will actually receive and complete the questionnaires. Lastly, due to locations of some KCB branches, some of the data collection instruments will be sent via email or sent by parcel to the branches, thereby compromising on time taken to process the same. Definition of Terms, abbreviations and acronyms KCB:Kenya Commercial Bank

Training – A process dealing primarily with transferring or obtaining knowledge, attitudes and skills needed to carry out a specific activity or task. Chapter Summary This chapter covered the background of the research, the problem statement, the purpose of the study or general objectives of this research, the research questions, the significance and scope of the research i. e. importance of the study and the definitions of Terminologies used in this research. In chapter two, I will review relevant literature that will help build on the variables and data collection methods to be used in the study. CHAPTER TWO

LITERATURE REVIEW Introduction The chapter will review relevant literature on the effect of training on staff productivity at Kenya Commercial Bank. In order to have an in depth knowledge on the effects of employee training on employee productivity, the chapter provides relevant literature in the field of study. The first part provides an overview of training; the next part examines theoretical framework and effects of employee training on employee productivity. Mugenda and Mugenda (2003) noted that literature review involves critical review of what previous work in relation to the research problem being investigated.

They argue that a properly done literature review should be extensive and thorough so as to provide the researcher with an adequate base for his or her work. I hope this literature review meets their esteemed standards. Theoretical Framework Human Capital Theory Human capital theory as formalized by Becker and Gerhart (1996) is the dominant perspective on on-the-job training. This theory views training as an investment; it raises expected future productivity but at a cost. The key distinguishing feature of a human capital investment as opposed to an investment in capital concerns property rights.

A machine can be sold, but in modern society, men cannot. As individuals have the discretion over the deployment of their own human capital, workers and firms will need to agree on an exchange in the labor market. This implies that how the costs and returns to training are shared between workers and firms is a central concern in the on-the-job training literature. Human capital theory has been further developed in the 1970s to explain the life-cycle pattern of earnings. This literature analyses the human capital investment decision of individuals in a competitive environment.

One may argue that, in this model, the distinction between education and training is an artificial one. Workers choose the investment as a function of prices (and ability). Through these prices, the demand side enters. There is no strategic interaction between workers and firms. Weiss (1985) surveys this literature. In the beginning of the 1990s, the new field of economics of information resulted in applications to on-the-job training. Recent developments in the training literature focus on the strategic interaction between employers and employees, and as such stands apart from life-cycle theories of earnings.

The focus is on market imperfections and information asymmetries. This review restricts itself to the core of private sector training theory. The reason for this focus is the scattered nature of this literature. The studies in this field differ in many modeling assumptions that complicate comparison. Yet, some common themes can be distinguished. The first major attempt to apply learning theory to educational technology was Skinner? s development of teaching machines, (Skinner, 1968). His idea was to develop curricula at such a level of detail that a learner could learn without error.

The learner, his theory held, never fully recovers from making errors; once made, there remains a possibility that they will recur to disrupt future learning and performance. Consequently, effective instruction should invoke only correct responses. He was critical of traditional teaching methods because they often engender errors in learning, and because they fail to reinforce behaviour effectively. On his theory, negative reinforcement (e. g. criticism, punishment) was to be avoided. Only positive reinforcement is theoretically sound, and this must be administrated according to specific schedules to ensure effective learning.

For instance, as new responses are shaped up, reinforcement should be withdrawn. Mechanical presentation of the curriculum seemed an ideal way for teaching since a perfect schedule of shaping and reinforcement could be built into the teaching programme. Kirkpatrick’s learning and training evaluation theory Donald Kirkpatrick’s 1994 book Evaluating Training Programs defined his originally published ideas of 1959, thereby further increasing awareness of them, so that his theory has now become arguably the most widely used and popular model for the evaluation of training and learning.

Kirkpatrick’s four-level model is now considered an industry standard across the Human Resource and training communities. The four levels of Kirkpatrick’s evaluation model essentially measure; (1) reaction of student – what they thought and felt about the training and the reaction evaluation is how the delegates felt about the training or learning experience. (2) Learning – the resulting increase in knowledge or capability, to assess whether the learning objectives of the program are met.

Learning evaluation is the measurement of the increase in knowledge or intellectual capability from before, to after the learning experience: Whether the trainees learnt what they expected to be taught; (3) behavior – The extent of behavior and capability improvement and implementation or application. Behavior evaluation is the extent to which the trainees applied the learning and changed their behavior, and this can be immediately or several months after the training, depending on the situation (the extent of applied learning back on the job. 4) Results – the effects on the business or environment resulting from the trainee’s performance. Results evaluation is the effect on the business or environment resulting from the improved performance of the trainee. This involves the organizational impact in terms of improved quality of work, increased output etc. It is the acid test. All these measures are recommended for full and meaningful evaluation of learning in organizations, although their application broadly increases in complexity, and usually cost, through the levels from level 1-4.

Effects of Training on Employee Productivity Research has shown that leadership training for executives and middle managers results in increased worker productivity (Barling, Weber, & Kelloway, 1996). Leadership development training could have the same benefits if given to the rest of the workforce (IIE Solutions, 1999). Leadership development, supervisory skills, and teamwork training often rank as the most important and most frequently offered training topics in corporations.

With the amount of money budgeted for training increasing every year and the marketplace becoming more global and competitive, it is imperative that the money spent on training is utilized to the fullest extent possible (IIE Solutions, 1999). According to Kapp (1999), manufacturing firms implementing training programs can expect an average gain of 17% in manufacturing productivity. Companies must understand that training is portable; that is, the knowledge imparted to employees will leave with the employee, thus benefiting another company. This also allows new employees to bring with them the knowledge ained from previous training programs. It is from this viewpoint that a company must manage its training program to identify the skill sets needed to increase problem solving for the present needs of the business (Miller, 1997). If gains in manufacturing productivity are achieved through the delivery of leadership training to traditional leadership groups, can similar gains be achieved in the banking industry by providing the same training to employees? Training and Employee performance People needing training can be classified in different ways. There is a distinction between novice users and expert users.

They can also be classified through their educational backgrounds, or through their current employment position. Whatever way trainees are classified, they all have different needs. It is important, when choosing a training method, to identify who is to be trained. Novice users may be computer-shy or technology-intimidated and may need personal attention. Experts may need little attention and may be bored with basic information, and therefore dampening the desire to learn. According to Campbell (2000), educational background information is important.

He also says that for people with little education, structure in learning is important. Employee position is important as well. Senior management may not have the time to attend group training or may have frequent distractions. The issue of self-esteem may also be a factor. Someone high in the ranks may not want to appear stupid to his counterparts by asking a question in group training. The explanation contributed by the knowledge management approach would be that training provides employees with the knowledge, abilities and skills required by the position.

In fact, Hitt, Ireland, Camp and Sexton (2001) found that training investment first generates a negative effect on results (deriving from the cost of the same), which later become positive, as far as the transfer of knowledge to the post is concerned. This effect can also be explained by taking into consideration that if employees perceive that the organisation is interested in training them and giving them confidence and intends to count on them in the long-term future, they will make more effort and be more effective in their work.

Training would be an important element in generating human capital. This argument is defended by Tzafrir (2005), who considers that investment in training can make employees feel indebted to the company. From a universal viewpoint some authors have argued that it is precisely in training that a greater universal effect than in other human resource practices can be seen. This is how it was noted by Lee et al. (2005) who highlight the fact that, of the 16 best practices studied by Pfeffer (1994), training is one of the few practices where a consistent, positive impact on performance is found.

The study carried out by Koch and McGrath (1996) does not directly analyze the relationship of training with performance; instead, it uses a personnel development index that showed a slightly significant effect on work productivity, measured by net sales per employee. However, this development index only gathers information through the measurement of the number of categories of jobs that receive formal training, which, to me, seems to be a very limited indicator of the training imparted by the company.

In Huselid (1995) and Huselid, Jackson and Schuler (1997) investigation, something similar happens. The combination of human resource practices is used rather than the training variable. In the first study, Huselid (1995) uses two factors to group the practices requiring a high level of commitment, the first of which designates employee and organized structure capabilities, including a wide range of practices aimed at developing the knowledge, abilities and capabilities of employees.

However, we are given to understand that it incorporates very heterogeneous practices where training has a relative weighting, since only one of the eight factor items makes reference to training (the average number of training hours received by the employee in the last year). A greater effort in training measurement can be found in the work of Delaney and Huselid (1996), who use a training index constructed from three items. The first records whether the company supplied some sort of training besides job position training, the second how many workers participated in hese programmes and the third a subjective evaluation of training effectiveness. Its results suggest that high performance practices in human resource management that include contracting on a selective basis, with training and incentives, are positively related with measurements of perception of the organization’s role. Training and Employee Commitment Training practices used by organizations may have an effect, direct or indirect on both employee motivation and organizational commitment (Meyer and Smith, 2000).

Organizational commitment is defined, in the words of Aragon et al (2003) as the relative strength of an individual’s identification and involvement in a particular organization. In order to equip their employees with the skills necessary to do their job, companies train them, in an effort to optimize their workforce’s potential. Some companies, planning for the long-term, invest in the development of new skills by their employees, so as to enable them to handle issues not currently present, but likely to come up in the future.

This kind of training can lead to high levels of motivation and commitment by the employees, who actually see the opportunity they are given. These employees’ appreciation for the investment their organization is making in them is shown in their hard work and their contentment in being a member of that organization. Training, then, is expected to have a positive effect on both motivation and employee commitment Training Methods and Employee Productivity It is readily acknowledged that individuals tend to learn differently based on preferred styles of teaching (Chambers, 2005).

Since these teaching styles impact the way individuals learn, training sessions could be augmented by designing the content to tap into each of the three different styles, thus appealing to a broad scope of disparate learning styles. For example, visual learners tend to process and recall information best when it is presented in a way that they can easily see the information. This can be achieved through the use of hand-outs, PowerPoint slides including pertinent information, and also other forms of multimedia such as videos or computer-based simulations.

Auditory learners, by comparison, process information from more of a listening perspective. Consequently, training can be augmented to focus on this preferred style by frequent descriptions of the pertinent information. This can easily be accomplished by verbalizing the content in handouts and PowerPoint presentations. Further augmentation can be achieved by allowing trainees to discuss important content in small group settings. The third learning style, kinesthetic, includes individuals who learn best by physically doing something.

Augmenting training to tap into this learning style requires the trainer to design exercises and activities that allow the learner to be physically engaged in learning. For example, a training session on team work may include an exercise where groups, working as a team, actually work jointly to accomplish some small task. One such exercise requires groups to identify some symbol they frequently associate with the idea of teams and then to work within their groups to construct their symbol using modeling clay.

This provides both visual and tactile reinforcement associated with the concepts covered in the training. Following this exercise, further discussion can reiterate important aspects of teamwork that were discussed in the training session, further reinforcing the material (Huselid, 1995). On-The-Job Training Methods The purpose of the on-the-job training session is to provide employee with task-specific knowledge and skills in work area. The knowledge and skills presented during on-the-job are directly related to job requirements.

Job instruction technique, job rotation, coaching and apprenticeship training are the common forms of on-the job training methods. Employees’ professional quality is the key of bank services, the rules and principles of work are taught in this kind of training, besides, courtesy, manners and techniques of handling interpersonal relations are taught as well. This kind of training aims to train employees to learn the best way to do the work in the most quickly and effective way (Walker, 2007). Job Instruction Training

This is a structured approach to training, which requires trainees to proceed through a series of steps in sequential pattern. The technique uses behavioral strategy with a focus on skill development, but there are usually some factual and procedural knowledge objectives as well. This type of training is good for task oriented duties such as operating equipment. The instructor or supervisor prepares a job breakdown on the job, while watching an experienced worker perform each step of the job.

Job instruction technique consists of four steps, preparation, present, try out and follow up (Blandchard & Thacker, 1999). Job Rotation This is the systematic movement of employees from job to job or project to project within an organization, as a way to achieve various different human resources objectives such as: simply staffing jobs, orienting new employees, preventing job boredom or burnout, rewarding employees, enhancing career development, exposing employees to diverse environments (Woods, 1995).

Excellent job rotation program can decrease the training costs while increases the impact of training, because job rotation is a hand on experience. Job rotation makes individuals more self-motivated, flexible, adaptable, innovative, eager to learn and able to communicate effectively. One of the possible problems with the rotation programs is the cost, because job rotation increases the amount of management time to spend on lower level employees. It may increase the workload and decrease the productivity for the rotating employee’s manager and for other employees.

Job rotation may be especially valuable for organizations that require firm-specific skills because it provides an incentive to organizations to promote from within (Jerris, 1999). Coaching This is the process of one-on-one guidance and instruction to improve knowledge, skills and work performance. Coaching is becoming a very popular means of development, and often includes working one-on-one with the learner to conduct a needs assessment, set major goals to accomplish, develop an action plan, and support the learner to accomplish the plan.

The learner drives these activities and the coach provides continuing feedback and support (DOE Handbook1074, 1995). Usually coaching is directed at employees with performance deficiencies, but also used as a motivational tool for those performing well. Coaching methods solve precise problems such as communication, time management and social skills. Executive coaching generally takes place on a monthly basis and continues over a period of several years. Often, coaches are brought in where there is a change in the structure of the company, when a team or individual is not performing well or where new skills are required.

Coaching assumes that you are fine but could be even better (Kirwan, 2000). Apprenticeship This is one of the oldest forms of training which is designed to provide planned, practical instruction over a significant time span. Apprenticeship was the major approach to learning a craft. The apprentice worked with a recognized master craft person (McNamara, 2000). Training and Employee Effectiveness Analysis from the beginning is definitely needed for training to be effective. The effectiveness of training is usually measured through user performance (Yi & Davis, 2001).

They introduces the idea of training validity which assess the performance of trainees in relation to the criteria set by the training. Training must always be evaluated with respect to both its immediate and long term impacts (Patton & Marlow, 2002). It starts from the training experience to the training outcome. The training experience includes the actual training and the immediate effects of the training based on performance. Training outcomes are the long term effects of the training (Carroll and Rosson). Researchers who have analyzed the impact of type of firm and firm size n employee training examined the training budget as the dependent variable Hitt et al (2001). A variety of training programs (in particular, informal training programs such as on-the-job training, job rotation, and apprenticeships) not usually included in the training budget were not considered, as though skills and knowledge acquired through these training programs are not relevant. Sirmon and Hitt (2003) drew attention to the importance of informal training to skill and knowledge acquisition in small firms.

In spite of the fact that in the real entrepreneurial world only a small number of companies measure the impact of training on the results (Koch & McGrath, 1996) several authors suggest that training is an instrument that makes the generation and accumulation of human capital possible. Training ensures that greater efficiency is achieved through the production of goods and services with a realistic profit margin in so doing the organization is assured of its survival in the market and in the sector as a whole (Huselid, 1995).

Given evidence that the support from peers in a training venue can impact the overall effectiveness of the learning (Armstrong, 1998). It might be beneficial to augment training by providing contact information on other training participants, encouraging trainees to communicate and interact following the training session. This could be done on strictly a voluntary basis where trainees could be asked to provide contact information to be listed on a roster of participants, thus minimizing potentially offending those wishing to keep their contact information private.

This information could be obtained prior to the training session and then the roster could be distributed during the session. In addition to obtaining contact information, trainers could also ask participants to voluntarily provide information related to key knowledge and skills that may further enhance the likelihood that trainees would contact others for the purpose of networking or benchmarking.

The perceived importance of training to improvements in productivity, sustained competitive advantage, and ultimately to firm performance has led governments in various countries to invest considerable resources into programs that encourage management and employee training in enterprises (Patton and Marlow, 2002). It is believed that training is a powerful agent to development of capabilities and to growth and profitability of the firm (Armstrong, 1998).

Koch and McGrath (1996) argued that firms that invest in employee training engage in formal performance appraisal, and link these to incentive compensation are likely to have lower employee turnover, higher productivity, and enhanced financial performance. Cosh, Duncan and Hughes (1997) suggested that training would enhance the survival rate of small firms. Similarly, Delaney and Huselid (1996) noted that the most successful firms provide employees more training than average. Ford and Wroten (1984) established a link between employee training and superior firm performance.

In addition, small business failure has been linked to poor management skills. It is argued that management training should greatly improve firm survival and performance (Ford & Wroten, 1984). Macrae (1991) established that major distinguishing factors between high-growth and low-growth small firms are the education, training, and experience of their senior managers. The existing literature tends to focus on management training (Heneman, Tansky & Camp, 2000) to the exclusion of other forms of employee training.

Few researchers have investigated the determinants of training in organizations and in all cases the dependent variable-training–was measured by a single variable, the training budget. Because informal training is often not accounted for in the firm’s books, the literature tends to be biased toward formal training. Employee training and development is an important programme that promotes employees in an organizational set up. The need for manpower development programmes cannot be overemphasized, as the application of acquired skills will go along way to ensure effective productivity in a world of work.

Many employees have failed in organizations because of lack of basic training which was not identified and provided for as an indispensable part of management function (Nwachukwu, 1988). As such, for an organization to realize the full potential of its employees, adequate employee training is necessary to ensure that the organization realizes its objectives. Olaniyan and Ojo (2008) note that training physically, socially, intellectually and mentally are very essential in facilitating not only the level of productivity but also the development of personnel in any organization.

The authors define training as a systematic development of knowledge, skills and attitudes required by employees to perform adequately on a given task or job. New entrants into organizations have various skills, though not all are relevant to organizational needs. Training and development are required for staff to enable them work towards taking the organization to its expected destination. Training Quality and Performance Employee performance is an important building block of an organization and factors which lay the foundation for high performance must be analyzed by the organizations.

Since every organization cannot progress by one or two individual’s effort, it is collective effort of all the members of the organization. Performance is a major multidimensional construct aimed to achieve results and has a strong link to strategic goals of an organization (Mwita, 2000). Managers at all the levels have to input their efforts and make maximum use of their abilities which sometimes are produced under supervision or without it. However, there are many expectations from managers working for an organization.

These expectations are sometimes fulfilled but in some situations these managers may be running to their boss for guidance. Therefore, the managers must be developed so that they can think and work on their own and fulfill their responsibilities innovatively, while understanding and foreseeing the market and business situations. Consequently question arises that how an employee can work more efficiently and effectively to increase the productivity and growth of an organization.

William Edward Deming, one of the quality Gurus defines quality as a predictable degree of uniformity and dependability at low costs and suitable to the market, he advises that an organisation should focus on the improvement of the process as the system rather than the work is the cause of production variation (Heyes, 2000) Many service organisations have embraced this approach of quality assurance by checking on the systems and processes used to deliver the end product to the consumer.

Essentially this checks on; pre-sale activities which encompass the advice and guidance given to a prospective client, customer communications ( how well the customers are informed of the products and services, whether there are any consultancy services provided to help the customers assess their needs and any help line available for ease of access to information on products), the speed of handling a client’s transactions and processing of claims, the speed of handling customers calls and the number of calls abandoned or not answered, on the selling point of Products/Services a customer would be interested to know about the opening hours of the organization, the convenience of the location and such issues (Lee, Lee & Pennings, 2005). This is only possible when employees are well trained and developed to ensure sustainability of the same.

Heyes (2000) stated that an organization should commit its resources to a training activity only if, in the best judgment of managers, the training can be expected to achieve some results other than modifying employee behaviour. It must support some organizational and goals, such as more efficient producer or distribution of goods and services, product operating costs, improved quality or more efficient personal relations is the modification of employees behaviour affected through training should be aimed at supporting organization objectives. According to Armstrong and Baron (2005) all organizations are concerned with what should be done to achieve sustainable high levels of performance through people. This means giving close attention on how individual can best be motivated through such means as incentives, rewards, leadership and training.

The aim is to develop motivation processes and work environment that will help to ensure that individuals deliver results in accordance with the expectation of management. For current employees whose job performance is not satisfactory. It may be that some type of additional training can help to bring them up to pair. Such training needs may be experienced with employees or with group of employees or individual who need additional training it is necessary to determine what they need. According to Heyes (2000), Training can only add value results if there is an opportunity for added value. Either the business is not performing effectively because people are not performing, or there is a market opportunity, which can be exploited but requires some new training or development.

Training ensures that greater efficiency is achieved through the production of goods and services with a realistic profit margin in so doing the organization is assured of its survival in the market and in the sector as a whole (Tzafrir, 2005). The quality of employees and their development through training are major factors in determining long-term profitability and optimum performance of organizations. To hire and keep quality employees, it is good policy to invest in the development of their skills, knowledge and abilities so that individual and ultimately organizational productivity can increase. Traditionally, training is given to new employees only. This is a mistake as ongoing training for existing employees helps them adjust rapidly to changing job requirements.

Organizations that are committed to quality invest in training of its employees (Evans & Lindsay 1999). According to Evans and Lindsay (1999), Xerox Business Products and Systems invest over $125 million in quality training. Motorola & Texas Instruments provide at least 40 hours of training to every employee quarterly. A complete employee training program includes a formal new hire training program with an overview of the job expectations and performance skills needed to perform the job functions (Odekunle, 2001). A new hire training program provides a fundamental understanding of the position and how the position fits within the organizational structure.

The more background knowledge the new associate has about how one workgroup interrelates with ancillary departments, the more the new associate will understand his or her impact on the organization. Models for Measuring the Effectiveness of Training Measuring the training effectiveness should be an important asset for the organizations. There are some criteria for measuring the success of training; direct cost, indirect cost, efficiency, performance to schedule, reactions, learning, behavior change, performance change (Sheppard, 1999). The Kirkpatrick’s Four Level Approach It was created by Donald Kirkpatrick in 1959, at the time; he was a professor of marketing at the University of Wisconsin.

It is still one of the most widely used approaches. His four level of evaluation are: reaction – a measure of satisfaction, learning – a measure of learning, behavior – a measure of behavior change and results- a measure of results (Phillips, 1997:39). Kirkpatrick model is now nearly 45 years old. Its elegant simplicity has caused it to be the most widely used methods of evaluation training programs. ASTD’s (American Society for Training Development) survey, which reports feedback from almost 300 Human Resource executives and managers, revealed that 67% of organizations that conduct evaluations use the Kirkpatrick model (Stone and Watson, 1999). Table 2. : Kirkpatrick Four Levels of Evaluation |Level 1: Reaction |Were the participants pleased? | | |What do they plan to do with what they learned? | |Level 2: Learning |What skills, knowledge, or attitudes have change? By | | |how much? | |Level 3: Behavior |Did the participants change their behavior based on | | |what was learned in the program? |Level 4: Results |Did the change in behavior positively affect the | | |organization? | Resource: Stone J. and Watson V. , (1999), Evaluation of Trainig, www. ispi-atlanta. org Kaufman’s Five Level of Evaluation Some researchers, recognizing some shortcomings of Kirkpatrick’s four level approach, have attempted to modify and add to this basic framework. Kaufman offers one such presentation. Kaufman has expanded the definition of Level 1 and added a fifth level addressing societal issues (Philips, 1997:40). At level 1, the factor of the concept enabling addresses the availability of various resource inputs necessary for a successful intervention.

At Level 5 is the evaluation of societal and client responsiveness, and consequences in payoff. This moves ev

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Scramble for Kenya

Imperialism is defined as one country’s domination of the political, economic, and social life of another country. In Africa in the nineteenth and twentieth centuries, imperialism was present and growing. The main countries involved in the imperialism in Africa were the French, German, and Britain. All of these countries were in a constant struggle to become the most powerful, to have the most riches, and control over high abundances of the natural resources in Africa. One region in particular being that of present day Kenya was desirable to the British.

Although Britain’s reason’s to imperialize Kenya were selfish and harmful, in the long run Britain helped Kenya progress. On a quest to find natural resources in Kenya the Portuguese were among the first European settlers along the coast of Kenya. Up until the 19th century, very little was known about Kenya’s land beyond the coast until the arrival of the British who came and colonized Kenya. Kenya was under the control of British between the 19th century and mid 20th century. In the early 1800s, European powers began rushing to get a hold of unclaimed territories within areas of interest in Africa.

Zanzibar and the interior of Eastern Africa caught the attention of both Germany and Britain. To avoid conflict, in 1886, Germany and Britain signed a treaty in which they agreed upon what lands they would pursue. Germany would take the coast of present day Tanzania and Britain had access to the area where Kenya and Uganda lie. 1 Britain was also interested in other areas in Southern Africa; however, the British were hesitant in accepting full responsibility for the region they had access to.

The result was Britain allowing a commercial company, the Imperial British East Africa Company (IBEAC), the right to administer and develop the eastern territory. The IBEAC was responsible for the land stretching from the eastern coast of Africa to Uganda all the way to the northwestern part to Lake Victoria. 2 The British settlers were particularly attracted to Kenya’s fertile highlands. Britain’s main interest in Kenya was not to control the local people, but to build a railway that would connect Uganda and Zanzibar, to the Indian Ocean.

The railway was important for strategic and economic reasons. It was to be the main link that would connect Lake Victoria and Uganda. Uganda became a source of interest since the source of the Nile river was thought to be there. The construction of the railway led to immigration of people from India who were imported to work on the railway. In order to maintain control over the Kenyans, the British limited their education to practical skills for working on farms. The colonial government forced Kenyans to work. In 1901, the British imposed tax payments in every area that they controlled.

In order to make room for the incoming British, indigenous agricultural peoples such as the Kikuyu and the Kampa were removed form their land and relocated. No longer allowed to farm on their own land, many Kenyans were forced to work for Europeans growing cash-crops. Wages for these workers were very low. Laws were also put in place by the colonial government that allowed employees to be fine or imprisoned if employers were not pleased with their work. It was these crimes, among other abuses, which gave rise to independence movements in Kenya which eventually liberated the country from the British.

Discrimination, imposition of taxes, forced labor, and confiscated land caused friction between Kenyans and the colonial government. 4 The friction led to eventual resistance by Kenyans against the British rule. Rebellious groups were formed one of them being the Mau Mau. The Mau Mau was a rebellion group formed to oppose British rule from 1890 until 1960. They worked on plans to force the British to leave. The loss of European life is very little. The main victims of Mau Mau violence are other Kikuyu who refuse to support the cause.

Among the Mau Mau themselves as many as 11,000 died in encounters with British forces. In 1929 one of the nationalist leaders, Jomo Kenyatta, was sent to England to negotiate on behalf of the Kikuyu community by presenting their concerns to the British government. In October 1952, there was a sudden outbreak of sabotage and assassination in Kenya. Kikuyu terrorists and their ritual oaths of loyalty to their secret organization reflect the customs of Jomo Kenyatta’s political group, the Kikuyu Central Association. The colonial government reacted immediately, declaring a state of emergency and arresting Jomo Kenyatta.

Kenyatta was charged for planning the Mau Mau uprising, he was sentenced in March 1953 to seven years’ imprisonment. Jomo Kenyatta was still in detention as of 1960, but his colleagues elected him president of their newly formed political party, the Kenya African National Union. Kenyatta is finally released by the British in 1961. 5 In elections in May 1963, Kenya African National Union won the majority of the seats. Independence of Kenya was achieved in December 1963, with Kenyatta as prime minister. A year later, under a new constitution, Kenya becomes a republic. In 1964, Kenyatta was elected president.

British imperialism changed Kenyan society in a number of ways. Large numbers of new peoples from different cultures took up residence in Kenya bringing in new ideas, missionaries brought about changes in religion, and land and labor practices changed. In addition to spreading their religion, missionaries also influenced and changed Kenyan culture in other ways. They established European style churches, schools, and hospitals which would have an ongoing impact upon the Kenyan people7. he cultural changes Kenya has undergone during the British imperialism has helped Kenya progress as a whole.

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Kenya’s Vision 2030 Relevance to Rural Development

Kenya vision 2030 is Kenya’s long-term national planning strategy stating the main goals of economic, social and political pillars that underpin the vision 2030.

It also provides a rundown of flagship projects to be embarked upon in the medium term period of the vision (2008-2012). It is the country’s development foundation store that covers 2008-2030. It aims at making Kenya a new industrial, middle income country providing high quality of life for all citizens. The vision is based on three pillars, namely;- the economic, social and political pillar. The economic pillar aims at providing prosperity to all Kenyans through an economic development program aimed at achieving an average of 10% annual GDP by 2030.

The social pillar seeks to build a just and cohesive society with of social equity in a secure environment. The political pillar founded on issues based on politics that respects the rule of law and protects the interests of every individual in the Kenyan society.

POLICY OBJECTIVES.

1. To unlock potential benefits of economic growth, employment and poverty reduction.

2. To increase the annual GDP growth rate to 10% per annum.

3. To reduce high energy costs.

4. To improve poor infrastructure.

5.To make Kenya a haul tourist destination in the world.

6. To raise incomes in agriculture, livestock, fisheries by processing and thereby adding value to the products before they reach the market.

7. To improve efficiency in the country.

8. To make Kenya the provider of choice for basic manufactured goods in Eastern and Central Africa.

9. To provide business services via internet to companies and organizations in developed countries e. g. Europe, Britain etc.

10. To have a vibrant/ globally competitive financial sector.

11.To promote globally competitive quality education/ research development.

12. To promote efficiency and quality health care system.

13. To achieve a nationally clean and secure environment.

14. To provide gender equity.

RELEVANCE TO RURAL DEVELOPMENT IN KENYA. ECONOMIC VISION AND STRATEGY. TOURISM. Creation of more tourist attraction sites with the aim of raising the tourist population in Kenya from 1. 8m (2006)- 3m (2030). This will involve upgrading the standards of attractive but rarely visited sites like Ruma and Marsabit. INCREASING VALUE IN AGRICULTURE.

This will be done by processing goods before they reach the market in order to give them more value. Also, it aims at introducing new land use policies that will maximize utilization of the high and medium potential lands for large-scale agriculture. A BETTER AND MORE INCLUSIVE WHOLESALE AND RETAIL TRADE SECTOR. It aims at lowering transaction costs through institutional reforms. It will involve strengthening informal trade through investment in infrastructure, training and linking it to wider local and global markets. MANUFACTURING FOR THE REGIONAL MARKET.

Kenya aims to become the provider of choice for basic manufactured goods in Eastern and Central Africa before breaking into other markets targeting commonly used products. It will be done by improved efficiency and competitiveness at firm level, thus raising the market share in the regional market from 7%-15%. BUSINESS PROCESS OFFSHORING. It involves providing business services via the internet to companies and organizations in developed worlds e. g. USA. FINANCIAL SERVICES. Having a vibrant and globally competitive financial sector driving high levels of savings and financing Kenya investment needs.

SOCIAL STRATEGY. EDUCATION AND TRAINING. It aims at Kenya providing a globally competitive quality, Itraining and research for development i. e. achieving 80% literacy rate, increasing school enrolment to 95% and increasing the transition rates to technical institutions and secondary schools to accommodate the ever increasing number of primary students who have qualified to join secondary institutions. HEALTH SECTOR. To improve the overall livelihood of Kenyans. The vision aims at providing efficient high quality health care systems with good standards. WATER AND SANITATION.

Kenya being a water scarce nation, the vision aims at conserving water sources and find new ways of harvesting and using rain and underground water. It also aims at promoting agricultural activities through irrigation (140,000-300,000 ha), 54km canal from Tana river to Garissa (Rahole canal), Tana Delta project and rehabilitation of major irrigation schemes. ENVIRONMENT. The vision aims in achieving a clean/ secure and sustainable environment by 2030. It will do this by increasing forest cover from less than 3% to 4% in the future, to lessen environmental diseases.

HOUSING/ URBANIZATION. To achieve decent and high quality urban livelihoods by 2030. GENDER, YOUTH AND VULNERABLE GROUPS. To promote gender equality, improve livelihoods amongst vulnerable groups and become a responsible society by empowering women, children and the youth. It also aims at doing away with child labor and FGM. SCIENCE TECHNOLOGY AND INNOVATION (STI). It is based on the creation of internet competitiveness in the corporate level and also for the citizens. POLITICAL STRATEGY. RULE OF LAW. Inculcating a culture of compliance with laws and decent human behavior.

Increasing service availability and access by reducing barriers for justice and public education. PUBLIC SERVICE DELIVERY. Promoting open engagement between the government and civil society as well as free flow of information e. g. by use of the media. SECURITY, PEACE BUILDING AND CONFLICT MANAGEMENT. Promoting community policing, reducing the police to population ratio, adopting information and communication technology (ICT) in crime detection and prevention, enhancing police training, all with an aim of creating a society free from danger and fear. POLICY GAPS.

1.Lack of clearly defined legal frameworks to deal with corruption e. g land grabbing.

2. Lack of policies that seek to mechanize milk farming.

3. It lacks avenues for the rural produce so as to discourage monopolies/ exploitation from private investors.

4. Does not entail modern storage facilities for farmers during boom yields and harvests.

5. It lacks frameworks to advocate for creation of small airstrips in high production zones so as to tackle the transportation challenge.

6. Lack of introduction and inclusion of computer studies in the school curriculum at the elementary level.

7. Does not seek to upgrade local hospitals to the referral level and also make treatment affordable.

8. Lack of emergency and rescue services that are fully equipped.

9. Lack of rural electrification programs.

10. Lack of agencies at the rural level to regulate price exploitation on commodities.

RECOMMENDATIONS.

1. Legal frameworks should be created to deal with cases of corruption.

2. The vision should include in it simple ways of mechanizing farming in the rural areas and at the same time create measures to ensure that human labor is not done away with completely.

3.Markets should be found or created by the government so that farmers have somewhere to sell their commodities at reasonable and fair prices.

4. The vision should include construction of modern storage facilities so that farmers can keep their excess produce safely and this will help reduce food insecurity in the country during scarcity.

5. Small airstrips should be constructed especially in areas that produce perishable goods so that they can be taken to major airports in good time.

6. ICT should be introduced and incorporated in the school curriculum at the elementary level.

7.The vision should advocate for affordable healthcare to all and also upgrade the local hospitals to referral statute.

8. Emergency and rescue services should be upgraded to international levels so that 95% of the emergencies can be tackled.

9. Rural areas should be electrified as this will attract industrialization in such areas.

10. Prices on basic commodities should be regulated so that they can become affordable to everyone.

REFERENCES

  • United Nations, (2005). Millennium Development Goals. New York
  • Government of the Republic of Kenya,(2007). The Kenya Vision 2030,Government Printers ,Nairobi, Kenya
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The Kenya Flourspar

The fluorite (CaF2) deposits were discovered by prof. Al Amin in 1967 in the areas of Kimwarer, Choff and Kamnaon. He was searching for semi-precious stones, and initially mistook the purple fluorite for gemstone. He therefore collected the sample and took them for analysis in Mombasa. It was later found to be fluorite.

A hand-mining operation was started and the fluorspar was supplied to the Bamburi Portland Cement Company in Mombasa. At its peak, the operation, which relied on donkeys to transport the fluorspar, produced around 400 tons per month of high grade fluorspar. In 1971 the Fluorspar Company of Kenya (FCK) was established, under the auspices of the Kenya government, to exploit the deposits on a larger scale. Crushing and jigging plants were later put up at mining site for large scale production of the metallurgical grade. Kenya fluorspar was a state parastatal upto 1996 when it was privatized.

It is currently owned by local and foreign investors. The company has seven active mining sites available from which ore can be mined depending on the grade and quality required. In 2003 the company obtained made a major investment in earth-moving equipment and plant upgrading. The deposit has been commercially mined since 1971. Initially, metallurgical grade fluorspar was produced. In 1975 a 100,000 ton per annum acid grade fluorspar concentrator was commissioned and by 1979 metallurgical grade fluorspar was no longer produced as primary product, but can still be produced as secondary product for smaller consignments.

The Kimwarer ore deposit has now been mined for over 35 years It is an EPZ (Export processing zone). LOCATION Kenya Fluorspar is a concern based in the Kerio Valley in the district of Eldoret and Iten. FORMATION OF FLOURITE (CaF2) The fluorite is an industrial mineral formed 150 to 200 million years ago. It is formed by replacement reaction known as mesomatism. The magma or hot water containing fluorine and other minerals was forced up from deep within the Earth. When this brine reached the calcium rich, limestone bedrock (CaCO3), fluorite crystals formed along the walls of fractures and voids in the rock.

Flat layers of fluorite also formed parallel to the limestone beds, replacing the host rock. The fluorine replaced the CO32- from the CaCO3 to form CaF2. The CO32- was dissipated as CO2 and water. This process is further elaborated in equation below: Ca2- + F22- CaF2 (fluorite) GEOLOGY AND OCURRENCE Fluorite (also called fluorspar) is a halide mineral composed of calcium fluoride, CaF2. It is an isometric mineral with a cubic habit, though octahedral and more complex isometric forms are not uncommon. Crystal twinning is common and adds complexity to the observed crystal.

The fluorite deposits are believed to be of hydrothermal origin in the Post-Miocene era when lavas formed a protective cap over Precambrian rocks in the area. The main deposit of fluorite is located at Kimwarer and is exposed on a series of five hills, four of which have been mined. Two other minor deposits knows as Choff and Kamnaon are approximately 2 to 5 km north of the present mine site and have been partially mined in the past for the production of metallurgical-grade spar. The Kimwarer ore bodies contain by far the largest ore reserves. The ore body contacts are distinct due to the buff colour of the ore in contrast to he grey gneiss, white marbles or pegmatites. Typically the fluorite is finely crystalline and disseminated through a siliceous matrix. Zones of high grade ore are often purplish or creamy yellow in colour with cavities filled with distinct cubic crystals. The Choffs have two ore bodies running parallel to each other for more than 3 km. The Choffs are separated by ridges and dips. The ore body pinches and swells and its width varies between 4 metres and 26 metres. This ore is soft and friable hence easy liberation in the plant and provides a good yield. The phosphate in this vein is medium to high.

The Kamnaon ore body has more than five partly parallel veins with varying dips of between 35-45 degrees. There are a number of other sites which are yet to be explored. The Fluorite at Kerio Valley occur as a vein deposit, especially associated with galena, sphalerite, barite, quartz, calcite and metallic minerals, where they often form part of the gangue (the surrounding “host-rock” in which valuable minerals occur). It is a common mineral in deposits of hydrothermal origin and has been noted as a primary mineral in granites and other igneous rocks and as a common minor constituent of dolostone and limestone.

The deposit at Kerio Valley is steeply diping at 40o, with strike varying with mine: Mine| Strike| Percentage CaF2| No. of mines| mines operating| Cheberen| North-South| 37%| 1-6| 1and3| Kamnaum| North west-South east| 40%| 1-5| 1| Choff| East-West| 50%| 1-12| 6and9| The deposit is stratified from Kamnaum to Cheberen1. The fluorite is polychromous i. e occurs in different colours depending on the trace elements. The different colours include: * Colourless * Orange * Green * Purple * Base yellow. GRADES OF FLOURSPAR The fluorite can be processed into grades depending on the use: 1.

Acid grade: This grade is used in the manufacture of Hydrofluoric acid (HF). 2. Metallurgical grade: This grade is used as flux in steel and cement industry. 3. Ceramic grade: This grade is used in the manufacture of ceramics. Only the acid grade is currently produced by Kenya Fluorspar. Metallurgical grade was also produced but stopped. MAJOR IMPURITIES AVAILABLE IN FLUORITE 1. Silica (silicon dioxide), SiO2 2. Calcite (calcium carbonate), CaCO3 3. Phosphorus pentaoxide , P2O5 4. Iron(III)oxide, Fe2O3 STAGES IN MINING AND PROCESSIG OF FLOURITE (CaF2) 1. Exploration 2. Overburden removal 3. Mining . Processing EXPLORATION This is normally done to obtain sufficient information about the deposit in order to enable a safe and economic design and to avoid difficulties during mining of the fluorite. The Kenya Fluorspar utilizes the diamond core drilling machine to obtain the drill cores. This machine can drill upto 140m-180m depth. The drill cores are then logged upto beyond the fluorite zones. The drill cores are then taken to laboratory for testing. The cores undergo through assessment, determination and classification. Diamond core drilling equipment. LAND CLEARING AND OVERBURDEN REMOVAL

LAND CLEARING This involves the removal of all the trees and stumps including the roots from the mining site. In Kenya Fluorspar, currently land clearing and overburden removal is done at choff 9. The main equipment used for land clearing at choff9 is a D355 Komatsu tractor-mounted dozer. The brush is disposed by dumping in gullies. D355 dozer. OVERBURDEN REMOVAL This involves the removal waste soil or rock that overlies the ore. At Kenya Fluorspar the overburden depth depends on the stripping ratio and dipping angle. Dozer is the main equipment used for stripping the overburden at choff 9.

This equipment pushes the overburden over the high wall. After the overburden has been stripped by the dozer, it is loaded onto trucks by a hydraulic hoe excavator for dumping in gullies. The waste is then pushed into gullies by the D355 dozer. Overburden is removed at a ratio of 3:1 to 8:1 (waste to ore) depending on the ore body, with over 700,000 tons of waste being stripped per annum at current production levels. Overburden is normally trucked away using 25 ton trucks provided by contractors. Overburden stripping continues until the fluorite is exposed. ORE EXTRACTION (MINING) Mining is by open cast methods.

The exposed ore is extracted by drilling and blasting. A total of approximately 360,000 tons of ore is mined annually. The geology has indicated that the ore body extends beneath the valley floor level and an open pit is being planned. Drilling and blasting The Kenya Fluorspar utilizes two types of drilling equipment (rig) to drill holes. These include: 1. Down the hole hammer (DTH). This is mainly used in solid hard formations. The hammer is just behind the bit. 2. Top hammer drill rig (TH). This is mainly used in loose formations. The hammer is on top of the drill string (pipes).

Crawler mounted DTHTop hammer drill rig The drill pattern to be applied depends on the: 1. Size of the drill bit to be used. 2. Geological condition of the area. All the bits are 102mm The drill pattern is square, 3m by 3m (burden by spacing) when there is a free face and staggered in absence of a free face. The depth of the drill holes differs, with most holes 10m and others 7m and 4m. Subdrilling is normally 3m. Both the DTH and TH are crawler mounted with TH complete with compressor mounted on it. Kenya Fluorspar has 3 operating crawler mounted drilling machines (2 DTH and 1 TH).

BLASTING This operation involves the following stages: 1. Preparation of ANFO 2. Hole charging 3. Initiation of explosives PREPARATION OF ANFO This involves mixing the ammonium nitrate with fuel (diesel) in the ratio 0. 075ml of diesel for every 1kg of ammonium nitrate. This operation is done by an explosive mixer in Kenya Fluorspar. HOLE CHARGING This process involves placing booster/ primer at the bottom of the drilled hole. The boosters normally used include: cast booster, pentolite booster and gelignite. The Kenya fluorspar utilizes the pentolite booster for the priming purposes.

Before placing the primer it is connected to a detonator. These detonators include: 1. Plain detonators 2. Instantaneous electric detonators. After placing the primer, ANFO is added depending on the hole depth as shown in the table below: Hole depth| Height of ANFO| Stemming| 10m| 7m| 3m| 7m| 5. 5m| 1. 5m| 4m| 3. 5m| 0. 5m| These holes charged are then connected by 25MS (millisecond) nonel shock tubes, short period detonating delay (SPDD) type. The rows are connected by 17MS surface trunk lines (also nonel shock tubes). The nonel shock tube has the following advantages: 1.

Produces low noise and vibration 2. It has less fly rock. It is because of the above advantages that make it useful near factory where less vibration are required. The nonel shock tube is very expensive. INITIATION OF EXPLOSION Once charging is complete the explosion can be initiated depending on the detonator used. Initiation can be done using the following: 1. Safety fuse which burns at a rate of 2 minutes per metre. This is used incase of plain detonators 2. Blasting machine incase of electric detonators. Secondary blasting is also done incase large boulders are produced in the primary blasting.

Large boulders can also be broken using the rock breakers. LOADING AND HAULAGE The blasted ore is loaded into trucks by an hydraulic excavator (Komatsu) hoe. The loaded ore is hauled a short distance of between 2 km and 7 km by contracted trucks to the crushing plant. These trucks range from 10tons to 20tons. The ore stock pilled separately depending on the source. PROCESSING OF FLOURITE (CaF2) The processing of fluorite at the processing plant involves the following stages: 1. Blending 2. Crushing 3. Grinding 4. Conditioning 5. Floatation 6. Thickening 7. filtration 8. Stock pilling

BLENDING Blending in normally done at the primary crusher by a wheel loader before feeding into the crusher in ratio of: 2cheberen:1choff:1kamnaum This blending ratio ensures that the feed is 40% CaF2 CRUSHING Types of crushers 1. Primary crusher: Jaw crusher 2. Secondary crusher: cone crusher 3. Tertiary crusher: cone crusher PRIMARY CRUSHING The ore feed to the hopper through a 12in grizzly screen. It is then feed to the primary crusher through an apron feeder and belt conveyor. The ore is first crushed in a primary stage crushing plant from a feed of 350 mm to less than 30mm in size.

The ore that is less than 60mm but more than 30mm is passed through the cone crusher where it is further reduced to less than 30mm. Any material that is more than 30mm is passed through the tertiary crusher. GRINDINGTypes mills used in Kenya Fluorspar 1. Rod mill 2. Ball mill 3. Re-grind mill. It is then conveyed to the grinding circuit where the material is added to a rod mill along with water to form slurry. The rod mill instantly grinds the ore after which it is sized using a hydrocyclone. Any oversized material is passed to the ball mill for a further grinding to the desired size of 80%.

The ore is now ready for conditioning and flotation. CONDITIONINGThis process takes place in the conditioner. This where the depressants and collectors are added. 1. Depressants a) Sodium fluorite which depresses the P2O5 b) Sodium bifluorite which also depresses the P2O5 2. Collectors a) Betacol b) TapiocaThis process renders the fluorite hydrophobic by the addition of a surfactant or collector chemical. FLOATATIONFlotation is the process that concentrates the ore. This is done by agitating the ore slurry in cells with air bubbles.

By adding a combination of fatty acid reagents, the fluorspar in the ore attaches itself to the air bubble to float to the top of the cell. This product is skimmed off leaving the waste in the bottom of the cell. The process is conducted in a series of rougher, scavenger, and cleaner cells that successively concentrates the ore from 40% CaF2 in the feed material to a minimum of 97. 0% CaF2 in the final concentrate. The water in the final product is then removed in a thickener and a rotary drum filter. This produces a filter cake concentrate containing approximately 11. % moisture. The samples are analyzed in the company’s assay and research laboratory. The waste product is pumped to the tailings dam and settled water is recycled to the plant for reuse. A FLOATATION CELLPERCENTAGE CaF2 CONCENTRATED PER SERIES OF FLOATATION CELL FLOATATION CELL| PERCENTAGE CaF2 CONCENTRATED| ROUGHER CELLS| 80%| SCAVANGER CELLS | 85%-87%| CLEANER CELLS| 97%| FLOATATION CIRCUITDEWATERINGThe water in the final product is then removed in a thickener and a rotary drum filter. This produces a filter cake concentrate containing approximately 11. % moistureTHICKENER ROTARY DRUM FILTEROperational Sequence * Cake Formation With the overflow weir set to a maximum the “apparent submergence” is normally 33-35% so the slurry levels between 0400 and 0800 hrs. Once a sector enters submergence vacuum is applied and a cake starts to form up to a point where the sector emerges from the slurry. The portion of the cycle available for formation is the “effective submergence” and its duration depends on the number of sectors, the slurry level in the tank and the bridge setting which controls the form to dry ratio. Cake Washing and Drying After emerging from submergence the drying portion of the cycle commences and for non-wash applications continues to about 0130 hrs where the vacuum is cut-off. If cake washing is required the wash manifolds will be located from about 1030 to 1130 hrs and the remaining time to vacuum cut-off at 0130 is the portion allocated to final cake drying. * Cake Discharge After vacuum for the entire sector is cut-off air blow commences at about 0200 hrs in order to facilitate cake discharge.

The blow, depending on the position of the tip of the scraper blade, will cut-off at approximately 0300 hrs. Drum filters are normally operated with a low pressure blow but on certain applications a snap blow is applied and to avoid the snapping out of the caulking bars or ropes wire winding of the cloth is recommended . Blow is used on scraper and roll discharge mechanisms but on belt discharge filters vacuum cuts-off when the filter media leaves the drum. The final product has composition shown in the table below: PRODUCT| PERCENTAGE COMPOSITION| Fluorite, CaF2| More than 97%|

Silica, SiO2| Less than 1%| Carbonate, CaCO3| Less than 1%| Iron III oxide, Fe2O3| Neglible| Phosphorus penta oxide, P2O5| Less than 0. 5%| TAILINGS DAMTailings, also called slimes, tails, leach residue, or slickens, are the materials left over after the process of separating the valuable fluorite from the uneconomic fraction (gangue) of the ore. These are the wastes from the floatation cells. Tailings are distinct from overburden or waste rock, which are the materials overlying an ore or mineral body that are displaced during mining without being processed.

The tailing are pumped from the processing plant to the to tailings dam for disposal. The height is about 15m and dimensions are 150m by 30m. it is trapezoidal in shape. The dam also has drain pipes to remove the seepage water. Hydraulic cyclones are used to build the dam. The cyclones separate the tailings into fine and coarse material. The coarse materiel from the cyclone underflow is used to build the wall of the dam will the material and water is disposed into the dam. The water is recycled and pumped back for reuse into the factory. The will built until the dam touches the adjacent hill.

LABORATORY QUALITY CONTROLL SECTIONThe company conducts two types of tests – chemical and metallurgical. The chemical section performs wet chemistry analysis (mainly titration) and operates 24 hrs a day throughout the year and each shift is headed by a qualified chemist. The metallurgical section mainly concentrates on research and development work. The sample (pellet) is subjected to an XRF machine which scans the sample imparting energy to it. The sample then radiates heat of various wavelengths. The wavelengths are analyzed by a computer program which displays the information instantly on the screen.

Strict quality control of run-of-mine ore, exploration and final product analysis is maintained by sampling. KFC prides itself in the quality of its assays, which are always crosschecked with those of European laboratories, namely SGS (Netherlands), HOFF and BSI in the United States. Weight sampling and analysis:  All analyses are being performed by SGS Kenya Ltd (Swiss company) at the cost of the company. Apparatus in the laboratory: a) Two Jaw crushers (14in. and12in. ) b) Pulverizer c) Oven for drying d) Splitter e) XRF machine f) Analytical balance g)

A pilot plantSample preparation i. Drying ii. Splitting iii. Crushing iv. Pulverizing. CARGO CONDITIONThe fluorite is Chemically inert, non-reactive, non-flammable, non-hazardous mineral sand. No hazard labelling required in accordance with IMO regulations. No special precautions for storage however, in order to maintain the purity of the material, it must not be allowed to be contaminated by any other material as it is used as the base product in sensitive chemical processes to produce other products and substances.

TRANSPORT Once the acid spar is produced, the fluorspar is loaded into 10 ton trucks and hauled to the railway siding at Kaptagat, a distance of 37km. From here it is loaded into 36 ton rail wagons for the 860 km journey to the Mbaraki wharf at Mombasa. The wagons are offloaded at the wharf where the fluorspar is stockpiled and covered while awaiting shipment. The storage capacity at Mbaraki is approximately 25,000 tons. The process of off-loading of wagons and trucks is labour intensive by means of manual labour.

Loading of the vessels is conducted using an automatic Demag Ship Loader, owned and operated by Bamburi Portland Cement Company. An average rate of 2,500 tons per day can be loaded on a continuous basis even on public holidays. The quantity loaded and moisture analyses are conducted by an independent surveyor on a continuous basis to ensure a representative result of the product loaded. Since Mombasa is one of the main ports in East Africa, chartering of vessels to carry bulk cargoes to any destination in the world can be easily arranged. |

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The Underwriting Challenges Facing P.S.V. Insurers in Kenya

Rational Choice Theory: An Overview by Steven L. Green Professor of Economics and Statistics Chair, Department of Economics Baylor University Prepared for the Baylor University Faculty Development Seminar on Rational Choice Theory May 2002 © 2002, Steven L. Green It has been said that democracy is the worst form of government except all the others that have been tried. -Winston Churchill

It seems easy to accept that rationality involves many features that cannot be summarized in terms of some straightforward formula, such as binary consistency. But this recognition does not immediately lead to alternative characterizations that might be regarded as satisfactory, even though the inadequacies of the traditional assumptions of rational behaviour standardly used in economic theory have become hard to deny. It will not be an easy task to find replacements for the standard assumptions of rational behaviour … hat can be found in the traditional economic literature, both because the identified deficiencies have been seen as calling for rather divergent remedies, and also because there is little hope of finding an alternative assumption structure that will be as simple and usable as the traditional assumptions of self-interest maximization, or of consistency of choice. – Amartya Sen (1990, p. 206) 1. Introduction Rational Choice Theory is an approach used by social scientists to understand human behavior.

The approach has long been the dominant paradigm in economics, but in recent decades it has become more widely used in other disciplines such as Sociology, Political Science, and Anthropology. This spread of the rational choice approach beyond conventional economic issues is discussed by Becker (1976), Radnitzky and Bernholz (1987), Hogarth and Reder (1987), Swedberg (1990), and Green and Shapiro (1996). The main purpose of this paper is to provide an overview of rational choice theory for the non-specialist.

I first outline the basic assumptions of the rational choice approach, then I provide several examples of its use. I have chosen my examples to illustrate how widely the rational choice method has been applied. In the paper I also discuss some ideas as to why the rational choice approach has become more prevalent in many disciplines in recent years. One idea is that the rational choice approach tends to provide opportunities for the novel confirmation of theories. I argue that these opportunities are the result primarily of the mathematical nature of the approach.

I then consider several issues raised by rational choice theory. First, I compare the limited meaning of “rationality” in rational choice theory with the more general definitions of the term use by philosophers. Second, I describe some of the main criticisms that have been levied against the rational choice approach. Third, I consider the limitations of rational choice models as guides to public policy. Fourth, I review some Christian perspectives on the rational choice appraoch.

I end the paper by outlining three sets of questions I would like us to discuss in the faculty development seminar. Before I proceed, an apology and a caveat are in order. I apologize for the length of this paper. The British publisher Lord Beaverbrook once apologized to a friend for sending a five- page letter, saying he did not have time to write a one-page letter. I have the same sentiment here. The caveat is that my discussion of the rational choice theory in this paper is necessarily simplistic, so the reader should not take it as definitive.

If some element of the theory seems suspect in some way, there will nearly always be an advanced version of the theory published somewhere that is more subtle and nuanced. Most statements in this paper are subject to qualification along many lines, so the reader should view what I present here keeping in mind the goal of the paper, which is only to give the reader some sense of the overall flavor of the rational choice approach. 2. Basic Assumptions about Choice Determination

Rational Choice Theory generally begins with consideration of the choice behavior of one or more individual decision-making units – which in basic economics are most often consumers and/or firms. The rational choice theorist often presumes that the individual decision-making unit in question is “typical” or “representative” of some larger group such as buyers or sellers in a particular market. Once individual behavior is established, the analysis generally moves on to examine how individual choices interact to produce outcomes.

A rational choice analysis of the market for fresh tomatoes, for example, would generally involve a description of (i) the desired purchases of tomatoes by buyers, (ii) the desired production and sales of tomatoes by sellers, and (iii) how these desired purchases and desired sales interact to determine the price and quantity sold of tomatoes in the market. The typical tomato buyer is faced with the problem of how much of his income (or more narrowly, his food budget) to spend on tomatoes as opposed to some other good or service.

The typical tomato seller is faced with the problem of how many tomatoes to produce and what price to charge for them. Exactly how does the buyer choose how much of his income to spend on tomatoes? Exactly how does the seller choose how many tomatoes to produce and what price to charge? One could imagine a number of answers to these questions. They might choose based on custom or habit, with current decisions simply a continuation of what has been done (for whatever reason) in the past. The decisions might be made randomly.

In contrast, the rational choice approach to this problem is based on the fundamental premise that the choices made by buyers and sellers are the choices that best help them achieve their objectives, given all relevant factors that are beyond their control. The basic idea behind rational choice theory is that people do their best under prevailing circumstances. What is meant, exactly, by “best achieve their objectives” and “do their best? ” The discussion in this section will emphasize the choices of consumers. 1] The rational choice theory of consumer behavior is based on the following axioms regarding consumer preferences:[2] 1) The consumer faces a known set of alternative choices. 2) For any pair of alternatives (A and B, say), the consumer either prefers A to B, prefers B to A, or is indifferent between A and B. This is the axiom of completeness. 3) These preferences are transitive. That is, if a consumer prefers A to B and B to C, then she necessarily prefers A to C. If she is indifferent between A and B, and indifferent between B and C, then she is necessarily indifferent between A and C. ) The consumer will choose the most preferred alternative. [3] If the consumer is indifferent between two or more alternatives that are preferred to all others, he or she will choose one of those alternatives — with the specific choice from among them remaining indeterminate. When economists speak of “rational” behavior, they usually mean only behavior that is in accord with the above axioms. I consider the definition of “rationality” in more detail near the end of the paper below. Rational choice theories usually represent preferences with a utility function.

This is a mathematical function that assigns a numerical value to each possible alternative facing the decision maker. As a simple example, suppose a consumer purchases two goods. Let x denote the number of units of good 1 consumed and y denote the number of units of good 2 consumed. The consumer’s utility function is given by U = U(x,y), where the function U(·,·) assigns a number (“utility”) to any given set of values for x and y. [4] The properties of a large number of specific function forms for U(·,·) have been considered. 5] The analysis is by no means restricted to two goods, though in many cases the analyst finds it convenient to assume that x is the good of interest is and y is a “composite good” representing consumption of everything but good x. The function U(·,·) is normally assumed to have certain properties. First, it is generally assumed that more is preferred to less – so that U rises with increases in x and with increases in y. Another way of saying this is to say that marginal utility is positive – where the term “marginal utility” is the change in utility associated with a small increase in the quantity of a good consumed.

The second property of U(·,·) is that of diminishing marginal utility, which means that the (positive) marginal utility of each good gets smaller and smaller the more of the good that is being consumed in the first place. One’s first Dr. Pepper after a workout yields quite a lot of satisfaction. By the fifth or sixth, the additional satisfaction, while still positive, is much smaller. An important result in consumer theory is that a preference relationship can be represented by a utility function only if the relationship satisfies completeness and transitivity.

The converse (that any complete and transitive preference relation may be represented by a utility function) is also true provided that the number of alternative choices is finite. [Mas-Collel, Whinston, and Green (1995, p. 9)] If the number of possible alternative choices is infinite, it may not be possible to represent the preference relation with a utility function. Rational choice analysis generally begins with the premise that some agent, or group of agents, is [are] maximizing utility – that is, choosing the preferred alternative. This is only part of the story, however.

Another important element of the choice process is the presence of constraints. The presence of constraints makes choice necessary, and one virtue of rational choice theory is that it makes the trade-offs between alternative choices very explicit. A typical constraint in a simple one-period consumer choice problem is the budget constraint, which says that the consumer cannot spend more than her income. Multi-period models allow for borrowing, but in that case the constraint is that the consumer must be able to repay the loan in the future.

The use of utility functions means the idea of agents making the preferred choices from among available alternatives is translated into a mathematical exercise in constrained optimization. That is, an agent is assumed to make the feasible choice (feasible in a sense that it is not prohibited by constraints) that results in the highest possible value of his or her utility function. Constrained optimization methods (based on either calculus or set theory) are well developed in mathematics. The solution to the constrained optimization problem generally leads to a decision rule.

The decision rule shows how utility-maximizing choices vary with changes in circumstances such as changes in income or in the prices of goods. A third element of rational choice analysis involves assumptions about the environment in which choices are made. Simple economic models are often restricted to choices made in markets, with emphasis on how much of each good or service consumers want to purchase (or firms want to produce and sell) under any given set of circumstances. A fourth element of rational choice analysis is a discussion of how the choices of different agents are made consistent with one another.

A situation with consistent choices in which each agent is optimizing subject to constraints is called equilibrium. In the fresh tomato market, for example, the choices of buyers and sellers are consistent if the quantity of tomatoes consumers want to purchase at the prevailing price is equal to the quantity that firms want to produce and sell at that price. In this as in other simple market models, price plays a key role in the establishment of equilibrium. If consumers want to purchase more than firms are producing, the price will be bid upward, which will induce more production by firms and reduce desired purchases by consumers.

If consumers want to purchase less than firms are producing, the resulting glut will force prices down, which will reduce production by firms and increase purchases by consumers. Fifth and last, in the absence of strong reasons to do otherwise such as the imposition of price controls by the government, the analyst employing rational choice theory will generally assume that equilibrium outcomes in the model are adequate representations of what actually happens in the real world.

This means, in the above example, that a rational choice theorist would explain changes in the actual price of tomatoes observed in the real world by looking for possible causes of changes in the equilibrium price of tomatoes in her model. Extensions The basic rational choice theory described above has been extended in a number of ways. I will consider four important ones in this section, though there are of course many others. First, the basic theory accounts only for choice at a given time – that is, the model is static.

In contrast, a dynamic (or intertemporal) model allows the agent to plan for the future as well as make choices in the present. In a dynamic model, the agent is still assumed to maximize utility, but the concept of utility is generalized to include not only present satisfaction but also future satisfaction. The agent does not just make choices today – he makes a plan for current and future choices. In this case, it may well be “rational” to sacrifice (e. g. , consume less or work more) today in order to obtain some better outcome tomorrow. The dynamic formulation is an essential element of theories of saving and investment.

One issue that arises in dynamic models is that of discounting. In most dynamic models, the agents under consideration are assumed to prefer (other things equal) a given level of consumption in the present to a given level of consumption in the future. Consider a model with two periods, 1 and 2. Let U1 denote the agent’s utility in period 1 and U2 denote utility in period 2. (U1 and U2 can depend on a number of factors, some of which can be controlled by the agent. ) The agent would then be assumed to formulate a plan for periods 1 and 2 to maximize the sum V = U1 + ? ·U2, where 0 < ? < 1 is the “discount factor. [6] A specification of ? < 1 means that a given utility is worth less to the agent in the future than in the present, and is denoted a “positive rate of time preference” or simply “time preference. ” A justification for time preference is given by Olson and Bailey (1981). Elster (1984, pp. 66ff) summarizes the opposing view that “… for an individual the very fact of having time preferences, over and above what is justified by the fact that we are mortal, is irrational and perhaps immoral as well. ” In any case, dynamic models with positive time preference are pervasive in the rational choice literature.

The basic rational choice model assumes all outcomes are known with certainty. A second extension of the basic model involves explicit treatment of uncertainty. This is important in rational choice models of crime, for example, where a rational agent is assumed to consider the chance he or she will be apprehended while committing a criminal act. The rational choice model is extended to allow for uncertainty by assuming the agent maximizes expected utility. Uncertainty is characterized by a probability distribution that assigns a likelihood (probability) to each possible outcome.

Suppose there are two possible outcomes (for example, the prospective criminal is apprehended while committing a crime, or not apprehended while committing the crime), which we can denote outcome A and outcome B. Let pA denote the probability that outcome A will occur pB denote the probability of outcome B. With these as the only possible outcomes, it is clear that pA + pB = 1 — that is, there is a 100% chance that either A or B will occur. Let U(A) be the agent’s utility with outcome A and U(B) be the agent’s utility with outcome B.

The agent is then assumed to maximize expected utility, which is the sum of utility in each outcome weighted by the probability that outcome will occur: V = pA·U(A) + pB·U(B). In general, the choices of the agent can affect pA and pB as well as U(A) and U(B). A related (and third) area in which the rational choice model is extended involves incomplete information. In the basic model described above, the agent knows perfectly all the qualities of the goods under her consideration. More generally, an agent may have to make choices when she does not have full information.

A university generally does not have full information about the future research productivity of a new assistant professor, for example, and a used car buyer cannot be certain that he is not driving a “lemon” off the lot. The fourth area in which the basic rational choice model is extended involves strategic behavior. This generally occurs in situations in which there are only a few agents. The key issue is that each agent must take into account the likely effect of his actions on the decisions of other agents, all of whom are looking at the situation the same way.

A classic ongoing example of this kind of interaction involves the crude-oil production decisions of the Organization of Petroleum Exporting Countries (OPEC). Acting collectively, OPEC members have an incentive to restrict production to keep the world price of crude-oil high. Thus each OPEC country is given a production quota – a limit on the amount it can produce. Each country acting individually, however, has an incentive to “cheat” on its quota and thereby be able to sell more crude-oil at the high price. This will only be successful if the other countries maintain their quotas, however, thereby keeping the price high.

Thus when a country is contemplating the breach of a quota, it must consider how other member countries may react. The branch of economics that deals with strategic interactions is called game theory. [7] 3. A Brief Description of the Rational Choice Method Like most scholarship, rational choice analysis usually begins with a question. What determines church attendance? Are suicide rates affected by the state of the economy? Do seat belt laws make highways safer? Under what circumstances are “cold turkey” methods necessary to end addictions?

Why are drivers of certain minority groups more likely to be pulled over by police? Which soldiers are most likely to suffer casualties in a war? Why can’t Yasser Arafat and Ariel Sharon just get along? Why did large mammals become extinct in the Pelistocene era? When are workers most likely to “shirk” their job responsibilities? Does a reported decline in “consumer confidence” portend a slowdown in the economy? Varian (1997, p. 4) describes the model-building process as follows: … all economic models are pretty much the same. There are some economic agents. They make choices in order to advance their objectives.

The choices have to satisfy various constraints so there’s something that adjusts to make all these choices consistent. This basic structure suggests a plan of attack: Who are the people making choices? What are the constraints they face? How do they interact? What adjusts if the choices aren’t mutually consistent? I will provide a slightly more detailed description here. Rational choice analysis may be characterized as working through the following steps: 1) Identify the relevant agents and make assumptions about their objectives. 2) Identify the constraints faced by each agent. ) Determine the “decision rules” of each agent, which characterize how an agent’s choices respond to changes of one kind or another – for example, how the quantity of tomatoes purchased might change with price or income. This task is usually accomplished mathematically by the solution of a constrained optimization problem. 4) Determine how the decision rules of various agents may be made consistent with one another and thereby characterize the equilibrium of the model. [8] Effective analysis of complex interactions between agents normally involves the use of mathematical methods, which can sometimes be quite sophisticated. ) Explore how the equilibrium of the model changes in response to various external events. That is, determine the predictions or implications of the model. Again, this step can involve substantial use of mathematics. 6) Examine whether the predictions determined in step (5) are consistent with actual experience. This step often involves the statistical analysis of data and can involve sophisticated techniques (to control sample selection bias, for example). 7) Draw conclusions and any implications (for government policy, for example) implied by (6).

It is often the case that the question at hand may be addressed by reference to standard theoretical results (e. g. , people generally want to consume less of a product when its price increases). In these circumstances the analyst often will not specify and solve a rational choice model explicitly. Instead, she will assume the reader understands that the model could be specified and solved if necessary and would have conventional implications. A. Preference Specification In rational choice theory behavior follows from the pursuit of objectives, so preference specification is crucial.

Frank (1997, p. 18) describes two general approaches. The self-interest standard of rationality “says rational people consider only costs and benefits that accrue directly to themselves. ” The present-aim standard of rationality “says rational people act efficiently in pursuit of whatever objectives they hold at the moment of choice. ” Frank contends that neither approach is obviously satisfactory. Many people would seem to care about more than their own material well-being, so the selfish egoism implied by self-interest standard is probably too narrow.

In contrast, the present-aim standard puts no restrictions at all on preference formation, which means that anything can be explained by an appeal to preferences. Again quoting Frank (1997, p. 18): Suppose, for example, that we see someone drink a gallon of used crankcase oil and keel over dead. The present-aim approach can “explain” this behavior by saying that the person must have really liked crankcase oil. The main strength of the self-interest standard is that the associated preference specifications are generally straightforward.

This approach, which dominates basic economic theory, usually assumes that utility depends only on the consumption of material goods and services and that, for any given good or service, more is strictly preferred to less. Bergstrom (forthcoming) presents an analysis based on evolutionary considerations showing circumstances under which selfish behavior will become dominant. The present-aim standard has also been used in rational choice models, but its use is nowhere near as prevalent as use of the self-interest standard. The reasons are threefold.

First, the self-interest standard has often been successful in the sense of yielding predictions that are consistent with experience. Second, there is no compelling way to specify preferences when the only criterion is “more than self-interest matters. ” (People may care about others, but are teh jealous or altruistic? ) Third, self-interest standard models are more tractable analytically and are more prone than present-aim models to imply specific observable predictions. In particular, models in which agents care about each other in some way are prone to have multiple equilibria (sometimes an infinity of equilibria).

Frank (1987) makes an evolutionary argument that preferences should include concerns for others. Bergstrom (1999) explores some possible solutions to the “multiple equilibrium” problem. B. Theory Revision It many instances step (6) will find that one or more of the predictions of a model are not borne out by the data. In these cases, the typical rational choice theorist will not even consider abandoning the assumption of utility maximization. Instead, she will conclude that she must have missed something about constraints or preferences and attempt to revise her theory accordingly.

This issue of theory revision is very tricky, and space limitations (not to mention by limited understanding) permit only a brief discussion here. Suppose a theory T has prediction P, when in fact available data indicate the opposite (not P, or ~P). The theory might then be revised in some way to become theory T’, where T’ predicts ~P rather than P. My impression is that most economists would much rather change assumptions about constraints rather than change assumptions about preferences. 9] This viewpoint reflects a desire to avoid meaningless tautologies such as “he consumed more tomatoes because his preferences changed in such a way that he wanted to consume more tomatoes. ” One can explain any choice in this way. Hausman (1984) summarizes the thinking of Lakatos (1970) as follows: A modification of a theory is an improvement if it is not ad hoc. Modifications may be ad hoc in three ways. First of all, a modification of a theory may have no new testable implications at all. Lakatos regards such modifications as completely empty and unscientific.

Modifications that are not ad hoc in this sense are “theoretically progressive. ” It may be, however, that the testable implications of the theoretically progressive modifications are not confirmed by experiments or observations. In that case modifications are theoretically progressive but not empirically progressive. They are ad hoc in the second sense. An extended process of theory modification is progressive overall if the modifications are uniformly theoretically progressive and intermittently empirically progressive.

As one is modifying one’s theory in the hope of improving it, modifications must always have new testable implications, and those testable implications must sometimes be borne out by experience. But one crucial feature of science has been left out. Throughout this history of repeated modifications, there must be some element of continuity. No theoretical progress in economics is made if I modify monetary by theory by adding to it the claim that copper conducts electricity. The expanded theory has testable (and confirmed) implications, but something arbitrary has simply been tacked on.

Such a modification is ad hoc in the third sense. One needs to recognize the role of something like a Kuhnian “paradigm. ” Modifications of theories must be made in the “right” way. (p. 23) I believe that most rational choice theorists would adhere to these criteria for effective theory modification. As Stigler and Becker (1977) note: What we assert is not that we are clever enough to make illuminating applications of utility-maximizing theory to all important phenomena – not even our entire generation of economists is clever enough to do that.

Rather, we assert that this traditional approach of the economist offers guidance in tackling these problems – and that no other approach of remotely comparable generality and power is available. (pp. 76-7) …. We also claim … that no significant behavior has been illuminated by assumptions of differences in tastes. Instead, they, along with assumptions of unstable tastes, have been a convenient crutch to lean on when the analysis has bogged down. They give the appearance of considered judgement (sic), yet really have only been ad hoc arguments that disguise analytical failures. p. 89) In any case, one can change assumptions about preferences only if the new assumptions not only fix the failure of the previous model (that is, they imply ~P rather than P) but also have new predictions that are not rejected by the data. C. Why is the Rational Choice Approach so Popular? [10] Defenders of the rational choice approach – e. g. , Becker (1976) — argue that the approach is useful because it tends to generate non-tautological predictions. Suppose a scholar wants to account for some observed phenomenon P.

For example, P might be the fact that wage rates paid to workers (after adjustment for inflation) tend to rise during good economic times [expansions] and fall during bad economic times [recessions]. It is generally quite easy to develop a theory T that predicts P, especially for someone who has studied P carefully. In fact, many such theories can be constructed. Importantly, however, it is generally not good scientific practice to use the same data to both formulate and test a hypothesis or theory. If so, all theories would be confirmed.

Instead, good methodology will develop a theory T that not only predicts P, but that also has other predictions Q1, Q2, Q3, … Ideally, many of these predictions will be observable – that is, one should be able to determine if Q1, Q2, Q3 …. do or do not in fact occur. If these predictions are not observed – say not Q1 (~Q1) is observed rather than Q1 – the theory may be judged inadequate and either revised or discarded. If I may be allowed a lapse into imprecise language, a theory can never be right if there is not at least some possibility in the first place for it to be wrong. 11] This is not to say that rational choice theorists are pristine with respect to this requirement. The history of economic thought is no doubt full of bad theories (“bad” in the sense that one or more key predictions are not consistent with the data) that have been saved by ad hoc modifications. It is to say that proponents of the rational choice approach contend that ad hoc theorizing and the resulting empty tautologies may be less prevalent with their approach than with other approaches.

I certainly agree that the rational choice method does in fact tend to generate many testable predictions, and in Sections 4 and 5 below I discuss several illustrative examples. Despite the fact that advocates of rational choice theory justify their approach in this way, I know of no study that explicitly compares methodologies along these lines. Is it really the case that rational choice models have more non-tautological implications than the models implied by other approaches? I am not sure anyone has examined this issue carefully.

I believe the rational choice methodology is gaining in popularity not just because it tends to generate lots of observable predictions, but also because it tends to generate novel predictions. This is an extension of the idea of novel confirmation. Novel confirmation embodies the sentiment expressed by Descartes (1644) that we know hypotheses are correct “only when we see that we can explain in terms of them, not merely the effects we originally had in mind, but also all other phenomena which we did not previously think. ” [Quoted by Musgrave (1974), p. 1)] Campbell and Vinci (1983, p. 15) begin their discussion of novel confirmation as follows: Philosophers of science generally agree that when observational equivalence supports a theory, the confirmation is much stronger when the evidence is ‘novel’. The verification of an unusual prediction, for example, tends to provide much stronger confirmation than the explanation of something already known of something the theory was designed to account for. This view is so familiar that Michael Gardner has recently described it as ‘a lengthy tradition – not to say a consensus – in the philosophy of science. ’

As seems to often be the case in the philosophy of science, the usefulness of novel confirmation is not as well established as the above quote implies. Campbell and Vinci (1983) also note that “… the notion of novel confirmation is beset with a theoretical puzzle about how the degree of confirmation can change without any change in the evidence, hypothesis, or auxiliary assumptions. ” (p. 315) Kahn, Landsburg, and Stockman (1992) maintain that the question of novel confirmation can be addressed meaningfully only in the presence “of an explicit model by which hypotheses are generated. ” (p. 04) They find that the idea of novel confirmation is valid if there are unobservable differences in the abilities of scientists or if there is some chance of error in observation. [12] Campbell and Vinci (1993) distinguish between epistemic novelty and heuristic novelty. Epistemic novelty occurs when a theory has an implication that would be considered highly improbable in the absence of the theory. There is of course a question over the proper definition of “highly improbable. ” Heuristic novelty occurs when the evidence predicted by a theory plays no heuristic role in the formation of the theory.

Descartes would seem to be referring to heuristic novelty in the above quote. Rational choice theory is a useful methodology in part (perhaps in large part) because it tends to lead the researcher to novel implications, thereby making novel confirmation more likely than may be the case with other methodologies. Space and time considerations do not allow me to attempt a full-blown analysis of this conjecture, which in any case I am not really qualified to undertake because of my limited exposure to alternative social science methodologies not based on rational choice and my limited knowledge of the philosophy of science.

In Sections 4 and 5 below I describe several examples of rational choice theory and some associated novel implications. I should note that the mathematical nature of rational choice theory would appear (to me) to be crucial here. Mathematics allows the theorist to make some sense out of complicated interactions between decision-making units that would otherwise be difficult or impossible to untangle. It is precisely those kinds of situations in which rational choice theories are most likely to have novel implications, because the implications are not immediately apparent even to scholars with knowledge, experience, and intuition.

We now proceed to Section 4, which provides a detailed discussion of a rational choice model of church attendance. Section 5 gives shorter summaries of several other rational choice models, including models of suicide, auto safety regulation, addiction, racial profiling, Congressional influence on military assignments, political revolutions, megafauna extinction, and the predictability of consumption spending. 4. A Detailed Example: Church Attendance

Azzi and Ehrenberg (1975) develop a rational choice model of church attendance. This is a classic paper, which Iannaccone (1998, p. 1480) calls “… the first formal model for religious participation (within any discipline) and … the foundation for nearly all subsequent economic models of religious behavior. ” [Italics in original. ] Their analysis begins with the assumption that the utility of a household consisting of two members, a husband and a wife, is given by: (1)U = U(C1, s1, C2, s2, … , Ct, st, … Cn, sn, q), where Ci is the household’s consumption of market goods and services in period i (i = 1, … n), and si denotes religious participation in period i. The model assumes “for simplicity” that both members of the household know how long they will live and that both will die at date n. This is a dynamic model, because the household cares about future as well as current consumption. The remaining variable in the household utility function, q, is the “expected value of the household’s afterlife consumption. Azzi and Ehrenberg assume that church attendance follows from a “salvation motive” (the desire to increase afterlife consumption) and a “social pressure motive” (where church membership and participation increases the chances that an individual will be successful in business), rather than necessarily a pure “consumption motive” (people simply enjoy the time they spend at church). Consumption in period i (any year during which the husband and wife are alive) is given by: (2)Ci = C(xt, h1t, h2t), here xt is denotes the consumption of goods and services purchases in markets, while h1t and h2t are the amounts of time devoted by the husband and wife, respectively, to market-based consumption. The idea here is that satisfaction involves not only the purchase of a good (such as a television) but also time spent using the good. The social value of church attendance in period i, denoted by si, is determined as follows: (3)si = s(r1i, r2i) where r1i and r2i denote the time spent on church-related activities by the husband and wife, respectively, in year i.

People get more current satisfaction from going to church the more time they devote to church-related activities. After-life consumption q is determined as follows: (3)q = q(r11, r12, r21, r22, … , r1n, r2n), That is, the more time spent on church-related activities during all periods of life means the more the household members will enjoy their afterlife. Azzi and Ehrenberg (p. 33, fn. 7) note that “Our household’s view of the afterlife is not one of an all-or-nothing proposition (heaven or hell), it is rather that there is a continuum of possible outcomes. ”

The choices of the household are constrained by time and money. The two household members can allocate time in labor [which generates income that can be used to purchase the goods and services denoted by xt in equation (1) above], consumption-related activities [reflected in h1t and h2t in equation (2) above], and church-related activities [reflected in the r1i and r2i in equation (3) above]. The constraint here is that each day has 24 hours. Hence the couple can spend more time on church-related activities only if they spend less time earning income and/or consuming.

The second constraint in the model says basically that, over the course of their lives, the couple cannot spend more than their combined income. “Over the course of their lives” means that it is possible for them to borrow early in life as long as they repay the loan (with interest) later in life. It is also possible to lend early in life, which means that consumption can exceed income later. The amount of labor income the couple earns depends on the amount of time spent working by the husband and wife and the wage rate each is paid.

The model also allows for “non-labor income” in each period, which might reflect investment returns. The distinction between labor and non-labor income turns out to be rather interesting and important with respect to church attendance. Azzi and Ehrenberg’s analysis is complicated in some respects and simple in others. It is complicated because it considers consumption over several periods rather than just one, and it allows for “consumption” to depend on time (the h1t and h2t) as well as purchases of goods and services in the market (xt).

The model is simple in that it does not consider the “supply side. ” That is, the model simply assumes that the household can “buy” any amount that it likes of consumption goods (xt) and that there are no effective limits on religious participation (st). The power of the rational choice approach is that rational choice models tend to have lots of observable implications, some of which are novel. The Azzi and Ehrenberg model implies that: (i) The frequency of church attendance increases with age; • (ii) Females attend church more frequently than males; • (iii) Nonwhites attend church more frequently than whites; • (iv) People who believe in an afterlife attend church more frequently; • (v) Having a spouse of the same major religion increases participation; • (vi) As health deteriorates church attendance declines; • (vii) An increase in the number of pre-school age children present in the household reduces church attendance; • (viii) An increase in the number of school-age children present in the household increases church attendance; (ix) Females’ hours devoted to religious activities will rise more rapidly with age than will the hours devoted by males to religious activities; • (x) For males who show sharp earnings increases in their 20s, religious participation may first decline with age and then increase; • (xi) An increase in nonlabor income will increase religious participation; and • (xii) The effect of a proportionate shift in wages (say, a 10% increase in the present and all future periods) on church attendance is ambiguous. Many of these implications are not surprising, but (ix) would appear to be somewhat novel.

Item (ii) means that 40 year old women will attend church more frequently than 40 year old men. Item (ix) means that the change (increase) in church participation associated with aging from 40 to 50 will be greater among women than among men. Item (ii) follows directly from the fact that females tend to have lower wages. Thus if one could find couples in which the wife earns more than the man, the model predicts for those couples that the wife will probably not be inclined to attend church more frequently. Also, allowing for an uncertain time of death may overturn (i): “… nce an individual is faced with a relatively high probability of death in a period it may become optimal for him to concentrate his religious participation as early as possible, since he may not survive to ‘invest’ in future periods. ” (p. 38) 5. Several Brief Examples This section presents a brief overview of several applications of rational choice theory. Unlike the church attendance example above, in which the form of the utility function was written out explicitly, the discussions in this section for the most part present only brief descriptions of the relevant optimization problems and some of the resulting implications. A.

Suicide Hamermesh and Soss (1974) develop a rational choice theory of suicide. They assume that the utility of an individual in any given period depends positively on “consumption” and negatively on “a technological relation describing the cost each period of maintaining [oneself] at some minimum level of subsistence. ” (p. 85) “Consumption” is a function of age and of “permanent income,” which is a measure of current and expected future income. Individuals are assumed to vary exogenously (according to a probability distribution) in their distastes for suicide – that is, some individuals are more averse to suicide than others.

This framework implies that “… an individual kills himself when the total discounted lifetime utility remaining to him reaches zero. ” (p. 85). Thus in this model we have a rational individual who is forward looking, considering not only his present utility but what his future utility is likely to be. If total utility over the rest of his life is higher with suicide and life ending in the present than it is with the continuation of life, suicide is the “rational” option. Here are some of the major implications of the model. (i) The suicide rate should rise with age. • (ii) The suicide rate should fall with increases in permanent income[13] and decreases in the unemployment rate. • (iii) The marginal absolute effect of permanent income on suicide declines as permanent income increases. The first two effects are by no means surprising, but the third effect is certainly by no means obvious ex ante (at least to me). (ii) means that suicide rates will fall as income rises. (iii) means that the effect of increases in income gets smaller the larger income is to begin with.

A $10,000 raise is much more likely to prevent suicide if the person is earning $50,000 to begin with than if the person is earning $150,000. This is quite plausible, but the point is that it is not something most analysts would think about ex ante. B. Auto Safety Regulation. Peltzman (1975) considers the likely effects of “legally mandated installation of various safety devices[14] on automobiles. ”[15] The devices in question for the most part were designed to reduce the damages caused by accidents rather than to reduce the likelihood that accidents occur. Peltzman notes that the auto safety literature estimates the impact of afety mandates by assuming that (i) the mandates have no effect on the probability that an accident will occur, and (ii) the mandates have no effect on the voluntary demand for safety devices. In effect, the regulations were implemented based on analysis that assumed the same number and nature of accidents would occur, but that automobiles would be better equipped to protect drivers and passengers from injury and death. He notes that “[t]echnological studies imply that annual highway deaths would be 20 percent greater without legally mandated installation of various safety devices on automobiles. (p. 677) Peltzman considers the behavior of a typical driver and postulates quite reasonably that he or she is made worse off by traffic accidents – or, equivalently, that he or she benefits from safety. Peltzman also assumes, however, that the driver benefits from what he calls “driving intensity,” by which he means “more speed, thrills, etc. ” (p. 681). Other things equal, the driver can obtain more driving intensity only by driving less safely. Thus the driver faces a trade-off between two goods, intensity and safety, in which more of one can be obtained only by giving up some of the other.

This kind of trade-off is in standard fare for rational choice theorists. In basic consumer choice theory the consumer with a given income can obtain more of one good only if he or she consumes less of some other good (or goods). The standard consumer choice problem also considers what happens when the consumer’s income rises. Rational choice theory predicts that, in the absence of very unusual circumstances, the consumer will buy more of most goods when income rises. Put another way, it is typically not the case that a consumer will allocate one hundred percent of an increase in income to increased consumption of a single good.

Income increases tend to be “spread around” over several goods. Peltzman argues that the imposition of mandated safety devices in automobiles is rather like an increase in income in the sense that the devices make it possible for drivers to obtain both more safety and more intensity. Technological studies in effect assume that drivers will respond by consuming only more safety, but rational choice theory indicates that drivers can also respond by consuming more intensity (that is, by driving less safely). The extent to which drivers choose between more safety and more intensity is ultimately an empirical question.

Suppose drivers choose to increase consumption of both safety and intensity — which is what economists have come to expect in these kinds of situations. In this case, the rational choice model implies that the number of total driving accidents[16] should rise because of increased driving intensity, while the average amount of damage per accident – as reflected, say in the number of fatalities among passengers – should decrease because of the safety improvements. This means that it is actually possible for total traffic fatalities to rise as a result of the safety mandates!

This would happen if the increase in the number of accidents is sufficiently large relative to the decrease in average damage per accident. Once again we have an example of a rational choice model yielding implications that are not obvious ex ante. The novel predictions here are that the imposition of auto safety mandates (i) should increase the occurrence of traffic accidents, and (ii) should decrease the relative frequency of accidents involving passenger fatalities, and (iii) may increase or decrease the total number of traffic fatalities.

After extensive empirical testing based on several data sets, Peltzman concludes that “regulation appears not to have reduced highway deaths. ” (p. 714). There is indeed some evidence that the number of deaths increased, but in most cases that evidence is not strong. In any case, there is no evidence that the regulations decreased traffic fatalities. Peltzman also finds that the safety mandates were followed by an increase in the number of accidents involving pedestrians and by an increase in the number of accidents involving only property damage with no injury to vehicle occupants.

A related paper by McCormick and Tollison (1984) considers the effect on arrest rates of an increase in the number of police officers. Rational choice theory indicates that the quality of law enforcement should not be judged by arrest rates alone. If the number of police officers increases and as a result the probability of arrest for any given crime increases, rational prospective criminals will see the expected cost of crime rise and therefore undertake fewer criminal acts.

Total arrests reflect both the number of criminal acts (which should fall) and the percentage of criminal acts for which an arrest is made (which should rise). Total arrests rise only if the latter effect is stronger than the former. McCormick and Tollison test their theory using data from the Atlantic Coast Conference in men’s college basketball. In 1978, the conference increased the number of officials from two to three. In this context, one may think of officials as police officers and fouls called as arrests.

McCormick and Tollison find that this 50 percent increase in the number of officials caused a 34 percent reduction in the number of fouls called (p. 229). When my son Aaron (now almost 5 years old) was an infant, he attended the Baylor Child Development Center during the day. In the room where the teacher changed diapers, there was a pad on the counter but no restraint of any kind (such as a belt or guard rail). When I asked the director about this, she said that there was no restraint because she (the director) did not want to give the teacher a false sense of security.

With a belt or rail, the teacher might be tempted to walk away for “just a minute” to check on something in the room. Whether restraints increase or decrease changing table accidents is an empirical question, though Pelzman’s analysis suggests the director made the right decision. C. Addiction Stigler and Becker (1977) propose a rational choice theory of addiction, a theory subsequently elaborated by Becker and Murphy (1988). In this theory, “a person is potentially addicted to [some good] c if an increase in his current consumption of c increases his future consumption of c. (Becker and Murphy, 1988, p. 81) The key feature of these models is that a consumer’s utility in any given period depends not just on consumption in that period, but also on “consumption capital”. Consumption capital is essentially the consumer’s ability to enjoy a particular good, which depends on past consumption of the good and perhaps on other factors. If past consumption enhances current enjoyment ability, the addition is said to be beneficial. This might be the case, for example, with listening to classical music. The more one listens to classical music, the greater one’s capacity to appreciate it.

Stigler and Becker note that beneficial consumption capital might also be positively influenced by education. Highly educated people might have a greater capacity to enjoy things like classical music, opera, and art. If past consumption reduces current enjoyment ability, the addition is said to be harmful. This is the case with substances such as heroin and other substances normally considered to be addictive. The more heroin a person consumes in the present, the less will be his or her future enjoyment (“high”) from any given amount of heroin consumption in the future. 17] The formal setup in Stigler and Becker (1977, p. 78) is relatively simple. First consider beneficial addiction – to, say, classical music. Consumer utility (U) depends positively on two goods, M (music appreciation) and Z (other goods): U = U(M, Z). Music appreciation depends positively on the time allocated to music listening ™ and on music consumption capital (Sm): M = M(tm, Sm). Music consumption capital at date j, Smj, depends positively on the time allocated to music consumption in the past, Mj-1, Mj-2, …. and positively (perhaps) on the person’s level of education at time j (denoted Ej): Smj = S(Mj-1, Mj-2, … , Ej). The addition is beneficial if Smj depends on positively on the past values of M. Alternatively, for harmful addition we may replace M with H, where H denotes the consumption of a good such as heroin. In this case, consumption capital S depends negatively on past values of H. The elaborated model of Becker and Murphy (1988) views addictive behavior as a situation in which the consumption of a particular good begins to increase rapidly. [18] Their model has a number of implications. Perhaps he most interesting is their finding that the demand for addictive goods should be quite sensitive to permanent changes in price (where the “price” of illegal goods includes the expected costs associated with apprehension by authorities, as well as any foregone earnings that may result from becoming addicted and, say, unable to work), but not necessarily to temporary price changes. A second implication is that strong addictions, if they are to end, must end suddenly (“cold turkey”). “Rational persons end stronger addictions more rapidly than weaker ones. ” (p. 692). Other implications are that “addicts often go on binges” (p. 75), “present-oriented individuals are potentially more addicted to harmful goods than future-oriented individuals” (p. 682), and “temporary events can permanently ‘hook’ rational persons to addictive goods” (p. 691). Stigler and Becker (1977) and Becker and Murphy (1988) do not perform empirical tests of their models of rational addiction. Tests have been performed by other authors, however. Because good consumption data are not available for illegal substances, tests have focused on tobacco and caffeine. Tests based on tobacco consumption are reported by Becker, Grossman, and Murphy (1994), and Keeler, et. l. (1993). A test based on caffeine consumption is reported by Olekalns and Bardsley (1996). These tests are generally supportive of the rational addiction theory. Becker and Murphy (1988) note that with a simple extension their model can explain cycles of overeating and dieting. Their basic analysis assumes there is only one kind of consumption capital. Suppose that with respect to food there are instead two types of consumption capital, one of which is simply the person’s weight (which might be called “health capital”) and the other of which is “eating capital. That is, eating can be both harmful and beneficial in the senses defined above. As eating increases, health capital falls (weight gain has detrimental effects on health) and eating capital rises (the capacity to enjoy food is greater the more one eats). Under appropriate conditions, utility maximization results in cycles of dieting and binging. [19] Rational addiction theory has been applied to the analysis of religious behavior – see Iannaccone (1984, 1990) and Durkin and Greeley (1991). Iannaccone (1998) summarizes this approach. Utility depends on “religious commodities” produced, the value of which depends on “religious human capital. The stock of religious human capital depends on time and money devoted to religious activities in the past. These models have the following predictions, “nearly all of which receive strong empirical support” (Iannaccone, 1998, p. 1481): • Individuals tend to move toward the denominations and beliefs of their parents as they mature and start to make their own decisions about religion; • People are more likely to switch denominations early in life; • People tend to marry within religions; if they do not, one spouse is likely to adopt the religion of the other.

D. Racial Profiling Law enforcement authorities in many jurisdictions have been criticized in recent years for racial bias in their choice of cars to search for illegal drugs and other contraband. [20] The fact that police are more inclined to stop and search cars driven by members of certain minority groups is well established. Knowles, Persico, and Todd (2001) develop a rational choice model that “suggests an empirical test for distinguishing whether this disparity is due to racial prejudice or to the police’s objective to maximize arrests. In their model, the typical police officer “maximizes the total number of convictions minus a cost of searching cars. ” (p. 209) Motorists “consider the probability of being searched in deciding whether to carry contraband. ” (p. 209) At least some motorists perceive a benefit to carrying contraband. If they do carry, their expected benefit is positive if they are not searched and negative (that is, there is a positive expected cost) if they are searched. The model implies that if police officers are not racially biased, the frequency of guilt among motorists conditional on being searched will be independent of race. 21] In their empirical analysis based on 1,590 searches on a stretch of Interstate 95 in Maryland between January 1995 and January 1999, Knowles, Persico, and Todd find support for this proposition. They interpret this result as “the absence of racial prejudice against African Americans” (p. 212). The fact remains, however, that African Americans are searched more frequently than whites. If this does not arise from racial bias by police officers, then why does it occur?

One possibility noted by the authors is that “race may proxy for other variables that are unobservable by the policy officer and are correlated with both race and crime. Possible examples of such unobservables are the schooling level or the earnings potential of the motorist. ” (p. 212) While one may quibble with some elements of this study, for our present purposes the main point is that the rational choice theory, at least potentially, yielded implications that allowed the analyst to gain some insight (if not a final resolution) into the issue of racial profiling. E. Congressional Influence on Military Assignments

Prior to the 1960s, economic theory tended to view politicians and other government officials (bureaucrats) as disinterested observers and regulators of economic activity. A group of economics led by Nobel Laureate James Buchanan then developed a branch of economics known as public choice theory, which views government officials as self-interested maximizers. Goff and Tollison (1987) take a public choice approach to gain some understanding of casualties in the Vietnam War. The typical soldier is assumed to prefer not to be placed in risky combat situations, and this preference is shared by the soldier’s family.

A solider (or more likely his family) might therefore try to gain a low-risk assignment by asking for intervention in military decisions by his Senator or Representative. Senators and Representatives are assumed to desire re-election, which implies a desire to please their constituencies. The ability of a Senator or Representative to have this kind of influence, however, varies according to committee assignments, ties to the military/industrial complex, etc. Goff and Tollison assume that political influence depends on seniority, with more seniority implying more influence.

Taken together, all these assumptions have the straightforward implication that soldiers from states with more senior (and hence more influential) Senators and Representatives should, other things equal, have experienced fewer casualties in Vietnam than soldiers from states with less senior (and therefore less influential) Senators and Representatives. Their empirical analysis (using data from January 1961 to September 1972) supports the hypothesis: In the House, the Mississippi delegation had an average seniority of 27. 7, while Hawaii had an average seniority of 61. . [A seniority ranking of 1 indicates the member had the highest seniority in his or her party. ] In terms of lives, this represents about 6 fewer war deaths for every 100,000 of population in Mississippi relative to Hawaii. Ceteris paribus, this difference in House seniority leads to a 55 percent higher casualty rate for Hawaii than Mississippi. … In the Senate, Arkansas had an average seniority of 6. 2, and Maryland had an average seniority of 45. 4. Other things equal …, this difference leads to an 86 percent higher casualty rate for Maryland than for Arkansas.

In terms of lives, this translates into about 7 more war deaths for every 100,000 of population in Maryland than in Arkansas. (pp. 319-20) In this case, the value of the rational choice approach is not so much in the fact that it yields surprising answers to a well-established question, but that it suggests a unique question to ask in the first place. It is by no means obvious that someone not thinking about self-interested Senators and Representatives would even think to ask the question addressed by Goff and Tollison. F. Ideology and Intransigence

Roemer (1985) applies game theory to the analysis of political revolutions. Specifically, he presents a two-player game between “Lenin” and the “Tsar. ” Lenin’s objective is to maximize the probability of revolution, while the Tsar’s objective is to minimize that probability. As in any game-theoretic setting, when making decisions each player keeps in mind how the other player might react. Lenin tries to create revolution by lining up coalitions, where people are induced to join a coalition with the promise of income redistribution.

The Tsar tries to prevent revolution by promising to punish anyone who participates in revolutionary activities (assuming the revolution attempt is unsuccessful). Increased penalties reduce the number of individuals who are likely to join the coalition but increase the revolutionary fervor of those who do. An individual will join a coalition attempting to overthrow the Tsar if the expected benefit to him or her of doing so exceeds the expected cost. There is of course some uncertainty about the outcome. Roemer’s results include the following: it is shown that various “tyrannical” aspects of the Tsar’s strategy, and “progressive” aspects of Lenin’s strategy need not flow from ideological precommitments, but are simply good optimizi

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Political Risk Analysis Kenya 2012

Political Risk Analysis KENYA Table of contents Kenya covers an area of 582,646 square kilometers. The land stretches from the sea level (Indian Ocean) in the east, to 5,199 meters at the peak of the snow-capped Mount Kenya. From the coast, the altitude changes gradually through the coastal belt and plains (below 152 meters above sea level), the dry intermediate low belt to what is known as the Kenya Highlands (over 900 meters above sea level).

The monotony of terrain in the low belt is broken by residual hills, masses of broken boulders and inselbergs. Settlement is confined to places where water can be found. Wildlife are masters of the greater part of the low belt. The famous Amboseli Game Reserve and Tsavo National Parks are situated here. The Great Rift Valley bisects the Kenya Highlands into east and west. Mount Kenya is on the eastern side. The Highlands are cool and agriculturally rich. Both large and small holder farming is carried out in the highlands.

The Lake Victoria Basin is dominated by Kano plains which are suited for farming through irrigation. The northern part of Kenya is plain and arid. However, a variety of food crops do well through irrigation. Kenya is located approximately 8-10 hours flying time from major European cities, and about 16-20 hours flying time from North American cities. 1. 2. CLIMATIC CONDITIONS Kenya enjoys a tropical climate. It is hot and humid at the coast, temperate inland and very dry in the north and northeast parts of the country. The average annual temperature for the coastal town of Mombasa (altitude 17 meters) is 30. 0 Celsius maximum and 22. 40 Celsius minimum, the capital city, Nairobi (altitude 1,661 meters) 25. 20 Celsius maximum and 13. 60 Celsius minimum, Eldoret (altitude 3,085) 23. 60 Celsius maximum and 9. 50 Celsius minimum, Lodwar (altitude) 506 meters) and the drier north plain lands 34. 80 Celsius maximum and 23. 70 Celsius minimum. There is plenty of sunshine all the year round and summer clothes are worn throughout the year. However, it is usually cool at night and early in the morning. The long rains occur from April to June and short rains from October to December.

The rain-fall is sometimes heavy and when it does come it often falls in the afternoons and evenings. The hottest period is from February to March and coldest in July to August. The annual migration of wildlife between Serengeti National Park in Tanzania and Maasai Mara National Park in Kenya takes place between June and September. The migration of almost two million wildebeest, zebras and other species is nature’s greatest spectacle on earth. 1. 3. POPULATION Kenya’s population has rapidly increased over the past several decades, and consequently it is relatively young. Some 73% of Kenyans are under 30.

In 50 years, Kenya’s population has grown from 7 million to 43 million. Kenya is a country of great ethnic diversity. Most Kenyans are bilingual in English and Swahili. Kenya has a very diverse population that includes three of Africa’s major sociolinguistic groups: Bantu (67%), Nilotic (30%), and Cushitic (3%). Kenyans are deeply religious. About 80% of Kenyans are Christian, 11% Muslim, and the remainders follow traditional African religions or other faiths. Most city residents retain links with their rural, extended families and leave the city periodi-cally to help work on the family farm.

About 75% of Kenya’s population lives in rural areas and relies on agriculture for most of its income. Nearly half the country’s 42 million people are poor, or unable to meet their daily nutritional requirements. The national motto of Kenya is Harambee, meaning “pull together. ” In that spirit, volunteers in hundreds of communities build schools, clinics, and other facilities each year and collect funds to send students abroad. 1. 4. BACKGROUND OF KENYA’S ECONOMY (1960-2010) Kenya is the largest economy in east Africa and is a regional financial and transportation hub.

After independence, Kenya promoted rapid economic growth through public invest-ment, encouragement of smallholder agricultural production, and incentives for private (of-ten foreign) industrial investment. Gross domestic product (GDP) grew at an annual average of 6. 6% from 1963 to 1973. Agri-cultural production grew by 4. 7% annually during the same period, stimulated by redistrib-uting estates, diffusing new crop strains, and opening new areas to cultivation. After experiencing moderately high growth rates during the 1960s and 1970s, Kenya’s eco-nomic performance during the 1980s and 1990s was far below its potential.

From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3. 9%. In-flation reached a record 100% in August 1993. In the mid-1990s, the government imple-mented economic reform measures to stabilize the economy and restore sustainable growth, including lifting nearly all administrative controls on producer and retail prices, im-ports, foreign exchange, and grain marketing. Nevertheless, the economy grew by an annual average of only 1. 5% between 1997 and 2002, which was below the population growth estimated at 2. % per annum, leading to a decline in per capita incomes. The poor economic performance was largely due to inappropriate agricultural, land, and industrial policies compounded by poor international terms of trade and governance weaknesses. Increased government intrusion into the private sector and import substitution policies made the manufacturing sector uncompetitive. The policy environment, along with tight import controls and foreign exchange controls, made the do-mestic environment for investment unattractive for both foreign and domestic investors.

The Kenyan Government’s failure to meet commitments related to governance led to a stop-start relationship with the International Monetary Fund (IMF) and World Bank, both of which suspended support in 1997 and again in 2001. During President Kibaki’s first term in office (2003-2007), the Government of Kenya began an ambitious economic reform program and resumed its cooperation with the World Bank and the IMF. There was some movement to reduce corruption in 2003, but the government did not sustain that momentum. Economic growth began to recover in this period, with real GDP growth registering 2. % in 2003, 4. 3% in 2004, 5. 8% in 2005, 6. 1% in 2006, and 7. 0% in 2007. However, the economic effects of the violence that broke out after the December 27, 2007 general election, compounded by drought and the global financial crisis, brought growth down to less than 2% in 2008. In 2009, there was modest improvement with 2. 6% growth. In May 2009, the IMF Board approved a disbursement of approximately $200 million under its Exogenous Shock Facility (ESF), which is designed to provide policy support and financial assistance to low-income countries facing exogenous but temporary shocks.

The ESF re-sources were meant to help Kenya recover from the negative impact of higher food and in-ternational fuel and fertilizer costs, and the slowdown in external demand associated with the global financial crisis. In January 2011, the IMF approved a 3-year, $508. 7-million ar-rangement for Kenya under the Fund’s Extended Credit Facility. To a considerable extent, the government’s ability to stimulate economic demand through fiscal and monetary policy is linked to the pace at which the government is pursuing reforms in other key areas. The Privatization Law was enacted in 2005, but only became operational as of January 1, 2008.

Parastatals Kenya Electricity Generating Company (KenGen), Telkom Kenya, and Kenya Re-Insurance have been privatized. The government sold 25% of Safaricom (10 billion shares) in 2008, reducing its share to 35%. Accelerating growth to achieve Kenya’s potential and reduce the poverty that afflicts about 46% of its population will require con-tinued deregulation of business, improved delivery of government services, addressing structural reforms, massive investment in new infrastructure (especially roads), reduction of chronic insecurity caused by crime, and improved economic governance generally.

The gov-ernment’s Vision 2030 plan calls for these reforms, but realization of the goals could be de-layed by coalition politics and line ministries’ limited capacity. Economic expansion is fairly broad-based and is built on a stable macro-environment fos-tered by government, and the resilience, resourcefulness, and improved confidence of the private sector. Despite the post-election crisis, Nairobi continues to be the primary commu-nication and financial hub of East Africa.

It enjoys the region’s best transportation linkages, communications infrastructure, and trained personnel, although these advantages are less prominent than in past years. Kenya faces profound environmental challenges brought on by high population growth, de-forestation, shifting climate patterns, and the overgrazing of cattle in marginal areas in the north and west of the country. Significant portions of the population will continue to require emergency food assistance in the coming years. Kenya is pursuing regional economic integration, which could enhance long-term growth prospects.

The government is pursuing a strategy to reduce unemployment by expanding its manufacturing base to export more value-added goods to the region while enabling Kenya to develop its services hub. In March 1996, the Presidents of Kenya, Tanzania, and Uganda re-established the East Afri-can Community (EAC). The EAC’s objectives include harmonizing tariffs and customs regimes, free movement of people, and improving regional infrastructures. In March 2004, the three East African countries signed a Customs Union Agreement paving the way for a common market.

The Customs Union and a Common External Tariff were es-tablished on January 1, 2005, but the EAC countries are still working out exceptions to the tariff. Rwanda and Burundi joined the community in July 2007. In May 2007, during a Com-mon Market for Eastern and Southern Africa (COMESA) summit, 13 heads of state endorsed a move to adopt a COMESA customs union and set December 8, 2008 as the target date for its adoption. On July 1, 2010, the EAC Common Market Protocol, which allows for the free movement of goods and services across the five member states, took effect.

In October 2008, the heads of state of EAC, COMESA, and the Southern African Development Communi-ty (SADC) agreed to work toward a free trade area among all three economic groups with the eventual goal of establishing a customs union. If realized, the Tripartite Free Trade area would cover 26 countries. 2. POLITICAL CRITERIA 2. 1. GENERAL From the moment Kenya became independent, they went through lots of big changes. In 1962 the KANU-KADU coalition government was formed. The coalition government included both Kenyatta and Ngala.

The country was divided in 7 regions and each one of the regions had its own regional assembly. After forming the coalition, the principle of reserving seats in the parliament for non-Africans was abandoned and the first open elections were held in May 1963. In 1964 Kenya became a republic, and constitutional changes further centralized the government (Wikipedia – September 2012). When in 1978 Daniel Arap Moi became president in an authoritarian and corrupt manner, there were several changes in the politic of Kenya.

Moi reduced the power of the Kenyatta’s men in the cabinet by identifying them to be traitors. Also although the parliament started off as coalition during the whole presidency of Moi there was only one party who had all the power. Even after being requested by United States to have multi-party system Moi declined. In the end because of the local and foreign pressure Moi was forced to accept a new party so that the multy-party could be restored. Moi won the elections in 1992 and 1997 where he used fear and electoral fraud to win (Wik-ipedia – July 2008).

In 2002 Moi was not able to present himself in the presidential elections because it is stated in the Kenya’s constitution that a present cannot be in the presidential elections more than three times. Moi unsuccessfully tried to promote Uhuru Kenyatta, as his successor. Moi’s former vice-president Mwai Kibaki was elected president by a large majority. International and local observers reported that the 2002 elections to be generally more fair than those of both 1992 and 1997 when Moi was elected as president. Kibaki lost quickly much of its power because his regime was too close linked with the Moi forces.

The continuity between Kibaki and Moi became one of the reasons for the self-destruction of Kibaki’s regime. In 2007 Odinga attacked the failures of the Kibaki regime. In December Odinga won majority of the seats in the Parliament, but the presidential elections votes were divided. In the end it became never clear who won the elections, still the election committee stated that Kibaki was the winner. Odinga accused Kibaki of corruption which resulted in several big confrontations between followers of Odinga and Kibaki. The European Union did not agree with the outcome either because of the detected fraud in the presidential elections.

As relation mass protest were triggered, bring-ing simmering ethnic tensions. The protest and the ongoing violence between several groups continued and became worse over the months. Between December and February 1. 500 people died and 600. 000 people became homeless. The United Nations tried to settle and offered a compromise whereby Kibaki stayed president and Odinga became Prime Minister (Chartis – February 2008). In August 2010, a reference date taken on a new Kenyan constitution. The new Kenyan con-stitution restricted the power of president which would benefit to the parliament and re-gions.

The reference date was accepted by the majority of parliament and passed peacefully. 2. 2. THE POLITICAL BALANCE OF POWER Various people speak of the heritance of Moi when looked at Kibaki and the amount of pow-er he has. Moi reduced the power of the cabinet – this resulted in more power for him, the president. When Kibaki became the president he had his first years as much power as Moi had in his years. But the second time Kibaki became president there were many protests against him becoming the president. Many people and also Odinga accused him winning unfairly.

United Nations stepped in and made Odinga prime minister and shortly after that the Kenyan constitution changed. With the new Kenyan constitution rules Kibaki, or the pre-sent president, is not allowed to appoint more than 50% of the ministers. The rest of the ministers can be chosen by the prime minister. In this way the president is never able to al-ways have full support by his ministers. Nowadays you can speak of a power-sharing cabinet in Kenya. The cabinet is fifty percent Kibaki appointed ministers and fifty percent Odinga appointed ministers.

At the moment we can speak of balanced coalition when we look at Kenya. 2. 3. PRESENT GOVERNMENT AND HIS ATTITUDES AND PROGRAMS Although many opposed of Kibaki to become the president Kenya again in 2007 he did by some say an outstanding job. The country is compared to the Moi years much better man-aged and has by far more competent personnel (Wikipedia – October 2012). Many sectors of the economy have recovered from collapsing in 2003. So did many state corporations who had collapsed during the Moi years have been revived and are performing profitably. Also the infrastructure has been going through changes.

Several ambitious infra-structural and other projects are planned or ongoing. Kibaki also introduced the Constituency Development Fund, this was introduced in 2003. The fund was designed to develop resources across regions and to control imbalances in regional development. The CDF program has invested in putting up new water, health and education facilities. There was also special attention for the remote areas of Kenya; these areas were usually overlooked during projects (CDF – official website). Another fact is since the presidency of Kibaki the dependence of Kenya on aid by western donors has been decreased.

The country is still getting funded significant but is now finding more fund by internally generated resources, such as tax. During Kibaki presidency, Kenya was more democratic and freer than before. When Kibaki came to power in 2003, he gave away free learning in primary school as well as in secondary school. This resulted in increase of number of children in primary- as in secondary school. 2. 4. POLITICAL STABILITY IN KENYA Before August 2010 all the power laid in the hands of the president. Ex-president Moi for example used his position for his own benefits.

After the new Kenyan constitution the power changed of only one person, the president, too have it shared with the cabinet. With the new Kenyan constitution it results in a more stable government. When we look at the further the cabinet of Kenya will go through huge changes starting from 4 March 2013, because the general election will then be held. So far Kibaki did not state that he will run in the president elections next year. Odinga will be participating as well as several other ministers, for example: the Deputy prime minister and the Cooperative minister (Wikipedia – October 2012). . CRITERIA RELATED TO DOMESTIC ECONOMY 3. 1. GENERAL INFORMATION Most of Eastern Africa’s economy is centralized in Kenya, although this gives them a power-ful position they still suffer from corruption and the low prices of their most important ex-port products. Lately the government has lacked investing in infrastructure which leaves them in danger of losing the position of the largest economy in Eastern Africa. The government is accused of the lack of attempting to stop the corruption which opened the doors to a lot of scandals within Kenya’s economy.

This has led to a deduction of financial support options. Recently Kenya have had a lot of setbacks like: high food and fuel import prices, a severe drought and reduced tourism resulted in rise in the interest rated and an increased cash re-serve. 3. 2. GDP The GDP in 2011 was $ 72, 34 billion, in 2010 this was $ 68,9 billion and in 2009 $ 2,6 billion. GDP growth in % Because of violence used during the elections plus the global financial crisis have led to a deduction in the GDP, in 2008 the growth was only 1,7% but luckily the economy rebounded since the year 2009.

Now in 2011 the growth was only 4,3% due to the inflation and currency depreciation. The GDP per capita was $1,700 in 2009 and in 2010 and increased to $1,800 in 2011. If you would compare this with the rest of the world this leaves Kenya on the 195th place in the, which is dangerously low when we look at the risk of doing business with Kenya. Year PPP growth 20051398. 7034. 74 % 20061490. 4066. 56 % 20071592. 9866. 88 % 20081604. 9250. 75 % 20091616. 1430. 70 % 20101675. 9183. 70 % Even though historical facts do not look good, the forecast concerning the GDP are looking better.

The GDP is likely to increase due to expansions in tourism, telecommunications, transport and construction and recovery in the agriculture, one of the most important sec-tors for Kenya’s GDP. 3. 3. MOST IMPORTANT SECTORS AND PRODUCTS As mentioned before, one of the most important sectors in Kenya’s economy is the agricul-tural sector, forestry and fishing accounted for 24% of the total GDP, 18% of the wage em-ployment and 50% revenue from exports. Especially the tea production and export are likely to increase because of prosperous weath-er forecasts; the coffee industry has stagnated and is not likely to increase in the near future.

The most profitable sector in Kenya is the service sector with tourism dominating that sec-tor. About 63% of all GDP is generated by tourism. Most tourists come from Germany and the Uniting Kingdom; they are attracted to the coastal beaches and the big game reserves. The tourism sector had a downfall because of negative attention in the media and the unsafe environment. The government is currently addressing the security problems within Kenya by introducing a tourism police and by launching marketing campaigns in key tourist origin markets.

The most important sectors are: consumer goods (mobile, batteries and textile), agriculture, oil, aluminum, steel, cement and tourism. 3. 4. INFLATION RATE Inflation in consumer prices in % The inflation rate in 2011 was 14%. As we can see on the chart the inflation rate fluctuates a lot which means it will have a negative effect on the analysis on the risk. The Kenyan inflation rate has been on an average of 12,6%, from 2006 until 2012. The ultimate high was 31,5% in May 2012 and 3,2% in October 2011. On the following chart we can see the inflation rate more specified in recent times.

Even in the last months there has been a lot of fluctuation in the inflation rate. The main reasons for the fluctuations are droughts and uncertainty in the import and export prices. 3. 5. THE GROWTH OF THE POPULATION The current total population is 43,013,341 (July 2012). In this chart we can see that the population always has had a steady growth. 3. 6. DOMESTIC INFRASTRUCTURE Kenya has an extensive road network of 152887 kilometers but most of the roads are in bad state unfortunately. For example of the total of 63. 800 ilometers of high way only 8,868 are paved. There is currently a project designed for creating links between all major and minor roads and to rehabilitate 20. 000 kilometer of roads in the urban centers. Kenya has a state owned railway corporation which is managing the single track railway station. It runs from Mombasa through Nairobi to the Ugandan border. Certain institutes are investing in the railway corporation to make it viable. The government is working on making the railway a private owned company. Either way, the Kenyan railway station is in a bad state.

Kenya has a port located in Mombasa; it has a freight throughput of about 8. 1 million tons. Kenya has an airport that recently has changed from a state owned company to a public/private company. This has been successful since Kenya now is the key gateway to Africa Communications Overall Kenya has a well-established communication system More than 90% of the population has access to GSM signals. Kenya Posts and Telecommunications Corporation provides international direct dialing and subscriber trunk dialing, mobile telephones, telex, facsimile, data communication and related services.

Substantial investment for the expansion of these facilities is under way and various internet providers have made their entry into Kenya. 4. CRITERIA RELATED TO FOREIGN ECONOMY Economic Cooperation, Regional Integration & Trade The East African Community (EAC) countries – Kenya, Tanzania, Uganda, Rwanda and Burun-di – transformed into a fully ? edged and enforceable customs union on 1 January 2010. They adopted a common external tari? (CET) with three bands: 0% (raw materials and capital goods), 10% (intermediate goods) and 25% (? nished goods). Tari? of up to 100% are appli-cable to products that are deemed to be sensitive to member states. These include maize, rice, cement, sugar and dairy products. Members will continue to collect customs receipts separately until a revenue sharing mechanism can be agreed. Furthermore, the EAC Common Market Protocol came into force on 1 July 2010, potentially allowing for the free movement of goods, services, people and capital in a zone with a com-bined population of some 135 million people. Given the large amount of legislation that needs to be amended in all countries to comply with the protocol, the transition is expected to proceed slowly.

Kenya has already taken signi? cant steps to domesticate and embrace the provisions of the protocol. A task force charged with reviewing national laws and aligning them with the Common Market Protocol has completed its report. Areas that need harmonization include investment, tax, labor, education, standards, competition, transport, communications and ? nancial services. The report was forwarded to the attorney general who was expected to prepare a miscellaneous amendment bill to be tabled in parliament. Non-tari? barriers (e. g. road blocks, varying quality standards, the ine? ient functioning of the port of Mombasa and other red tape) continue to impede the free trade in goods and add to the costs of doing business. The replacement of paper-based customs administration practices with an electronic inter-face system, Simba, is a strong step towards enhancing competitiveness and trade facilita-tion. With the bringing into operation of Simba customs checks are subjected to computer-ized scanning and fewer physical checks are undertaken. The programme has enabled im-porters and exporters to lodge their documentation on line.

In 2012, the Simba upgrade is expected to increase automation of goods clearance across all Kenyan border crossings. 4. 1. IMPORT 2011 While Kenya had just spent 3. 3 billion US Dollars on merchandise imports in 99’, they imported goods worth to 13. 49 billion US Dollar in 2011 which is an increase of over 400%. The depressed performance during the 2008-09 was due to a number of adverse shocks including the post-election violence in early 2008, a severe drought that affected most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the econ-omy rebounded in 2010.

Import Products The major import products for the year to June 2011 were oil, manufactured goods, chemi-cals, machinery and transport equipment. The increase in the value of imports was mainly due to imports of oil, machinery and transport equipment, and manufactured goods. Oil imports accounted for 24. 2% of the total import. International oil prices increased from USD 74. 8 per barrel in June 2010 to USD 112. 15 per barrel in June 2011. Imports of machinery and transport equipment accounted for 28. 9% of total imports, and increased from USD 3 212 million to USD 3 942 million.

This was due to the ongoing infra-structure development. Imports of manufactured items, mainly intermediate goods, accounted for 14. 8% of the im-port bill and increased from USD 1. 625 million to USD 2. 021 million while chemicals ac-counted for 13. 5%. Major Import Partners Kenya’s major import partners for merchandise are (2011): 1United Arab Emirates13. 0% 2China12. 1% 3India11. 6% 4South Africa5. 8% 5United Kingdom4. 6% 4. 2. EXPORT 2011 Kenya had received 2. 2 Billion US Dollar in 99’, while they could increase their receiving for ex-ports in 2011 to 5. 77 Billion US Dollar.

This is an increase of about 260%. The depressed performance during the 2008-09 was due to a number of adverse shocks including the post election violence in early 2008, a severe drought that affected most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010. Export Products The agricultural sector continues to dominate Kenya’s economy, although only 15 percent of Kenya’s total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 per-cent can be classified as first-class land.

It is the mainstay of Kenya’s economy, contributing over one third of the Gross Domestic Product (GDP). AGRICULTURAL PRODUCTS:Tea, coffee, horticultural products, pyrethrum, pineapples, sisal, tobacco and cotton. TOP 1 – TEA Kenya is one of world`s top producers and exporters of high quality tea and coffee. Value of the produce was boosted by the average auction price TOP 2 – HORTICULTURE The robust flower industry in Kenya sees flower exports ac-counting up to 35% of all Europe’s flower imports. The good performance recorded in the horticultural sub-sector was due to improved external demand.

OTHER EXPORTS:Beside this also iron, steel, petroleum products, cement, arti-cles of plastics, medicinal and pharmaceutical products, and leather are exported Textile is Kenya’s leading manufactured export. Soda ash (used in glassmaking) is Kenya’s most valuable min-eral export and is quarried at Lake Magadi in the Rift Valley. SERVICES: Transport, tourism and telecommunications services are the top three service exports in the country. Kenya’s services sector, which contributes about 63 percent of GDP, is dominated by tourism. TOURISM: In 2011 tourism experienced signi? cant gains with earnings rising by 32. %. The United King-dom continued to be the country’s main departure point for tourists with 203. 290 arrivals. Tourism is the second most important source of foreign exchange. To maximize on this growth trend, the Government is working together with the private sector in carrying out marketing as well as in strengthening linkages between tourism and the rest of the economy. Major Export Partners The market for Kenyan exports has been transformed over the years due to changing policy environment, regional integration and other initiatives providing market access to 12 key trading blocks.

The initiatives include the East African Community, the Common Market for Eastern and Southern Africa (COMESA), Cotonou ACP/EU Partnership Agreement, and the AGOA initiative, among others. COMESA is Kenya’s key export market, absorbing about 35% of total exports. The European Union market is the second most important, absorbing about 30% of total exports. Kenya’s major export partners for merchandise are (2011): 1COMESA (e. g. Uganda, Tanzania etc. )35. 0% 2European Union30. 0% 3United States5. 6% 4Pakistan4,2% 5United Arab Emirates4,1%

Kenya’s relations with Western countries are generally friendly, although current political and economic instabilities are sometimes blamed on Western pressures. ? 4. 3. THE IMBALANCE IN TRADING Kenya is largely a trade deficit country. The negative balance of trade occurs because the country’s exports are vulnerable to both international prices and the weather conditions. Since independence, Kenya has enjoyed close international relations, particularly with the western countries. It is also a member of several regional trade blocs, such as the COMESA (Common Market for Eastern and Southern Africa) and the EAC (East African Community).

These blocs are key components of Kenya’s trade volumes. The 2011 Kenya’s trade performance was mainly affected by rise of oil prices globally which led to increase in the import bill and the depreciation of the Kenya shilling, while exports remained stagnant. The gap between imports and exports, also called current account deficit, now stands at above 10% of GDP – one of the highest in the world! Today, Kenya’s main exports don’t even earn enough to pay for its oil imports, 4. 4. KENYAN CURRENCY The recent history of Kenyan currency

On 14 September 1966, the Kenyan shilling (KES) replaced the East African shilling at par, although it was not demonetized until 1969. The Central Bank of Kenya issued notes in de-nominations of 5, 10, 20, 50 and 100 shillings. Locals in Kenya call the Kenyan shilling also “Bob”. The Kenyan Shilling: Development of the Kenyan shilling Overview of the development of the Kenyan shilling (blue) compared to the US Dollar (red) between 2002 and 2012. Exchange rate in October 2012: EUR / KES 1 Euro = ca. 110,38 Kenya shilling 100 Kenya shilling = ca. 0,91 Euro EUR / USD 1 Euro = ca. 1,29 US Dollar 100 Kenya shilling = ca. ,18 US Dollar 4. 5. KENYAN MONETARY POLICY The year 2011 was tumultuous for the monetary authorities in Kenya with high inflation rates and a heavily depreciated currency. The month–on-month inflation rate averaged 12. 9% from January to October and peaked at 19. 7% in November 2011 against a target of 5%. The high rate of inflation was mainly driven by a rise in food and non-alcoholic beverage prices and transport charges. The food and non-alcoholic beverages index rose by 26. 2% compared with October 2010 while the transport index rose by 26. 22%. The rise in transport index reflected the sharp rise in fuel prices.

According to the Central Bank of Kenya (CBK), the euro-area currency crisis also had a desta-bilizing effect on the price level. Inflation is expected to drop to single digits in the next two years thanks to improved production of food and stability of fuel prices. In 2011 the Kenyan shilling depreciated (=im Wert gefallen) by a margin of 25. 2% against the US dollar (USD), dropping from an average of KES 81. 11 per USD 1 in January 2011 to KES 101. 51 in October 2011. It depreciated against the euro (EUR) from an average of KES 108. 29 per EUR 1 in January to KES 139. 07 in October 2011.

To arrest the fall of the Kenyan shilling, the monetary policy committee (MPC) progressively increased the central bank rate (CBR) from a low of 6% in January 2011 to a high of 18% by December 2011. The inflationary pressure experienced in 2011 and the depreciation of the Kenyan shilling can directly be traced back to the Central Bank of Kenya policy adopted in 2010, when it cut the central bank rate from 7% in January to 6% in December. This was meant to revive lend-ing and stimulate the economy through increased consumption. The policy was highly suc-cessful as evidenced by the 5. 6% growth attained in 2010.

However increased consumption pushed up consumer prices and put pressure on the Kenyan shilling as it heightened demand for imports, which rose from USD 11,283 million in year 2009/10 to USD 13,659 million in year 2010/11. Furthermore, in year 2010/11, domestic credit increased by KES 254. 4 billion (23. 4%) against a target of KES 205. 9 billion (18. 9%). The excess credit growth reflected a stronger domestic demand than previously estimated. 4. 6. KENYAN’S DEBT SITUATION Kenya’s external debt (or foreign debt) External debt is that part of the total debt in a country that is owed to creditors outside the country.

This is not to be confused with actual government debts. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank. List of countries by external debt (End of 2011): External debt. (in USD)per capita% of GDP 1 United States14,710,000,000,00050,266103 2 United Kingdom9,836,000,000,000156,126390 3 France5,633,000,000,00074,619182 4 Germany5,624,000,000,00057,755142 5 Japan2,719,000,000,00019,14845 Italy2,684,000,000,00036,841108 7 Netherlands2,655,489,600,000226,503344 8 Spain2,570,000,000,00018,26084 16 Austria 883,500,000,00090,128200 92 Kenya 7,935,000,00020025 The debt service ratio The debt service ratio is the ratio of debt service payments (principal + interest) of a country to that country’s export earnings. A country’s international finances are healthier when this ratio is low. The ratio is between 0 and 20% for most countries. For example, if a country has export revenue of ? 100bn and pays ? 15bn interest payments on its external debt, then its debt service ratio is 15%.

A rising debt service ratio is often the sign of an imminent economic crisis. Debt service ra-tios may rise because of: •A fall in exports •Lower price of commodities which are main exports of a country. •Higher Borrowing •Higher interest rates increasing cost of debt repayments •Devaluation increasing cost of external repayments. 5. CONCLUSION All in all Africa has a big potential for exports and investments as there are still big growth opportunities. Kenya has the greatest growth potential in the Sub-Saharan area followed by South Africa. However there are some recommendations to bear in mind (e. . Letter of credit, creditworthiness check,… see list at end of paper) Following there is an overview of the key advantages and disadvantages for exporting to or investing in Kenya: +- Stable economy and good eco-nomic prospectspolitical instability ? political riskBUT: increasing political stability since peaceful referendum in 2010 ? adoption of a new con-stitution Favourable strategic geographical position and access to export mar-kets (? Eastern Africa) corruption and impunity (=Straflosigkeit) BUT: High efforts to bring the problem under control: since 2010 ?

Kenyan Anti-Corruption Commission forced high-profile cabinet ministers to step aside and the International Criminal Court publicly named perpetra-tors of violence (=Gewalttater) Membership of the largest African common market, the EAC (Eastern African Community), COMESA and the Southern African Development Community (SADC) ? enables the free movement of goods and ser-vices across the member statesInadequate infrastructure for absorption of economic devel-opmentBUT: High efforts to catch up on infrastructure English languagewidespread poverty ? crime Mombasa seaport ? most impor-tant seaport + Nairobi ? olitical and economic stronghold in the Eastern African Areacompanies are often undercap-italized ? risk of late or non-payment Small time difference Small taxes and levies (=Abgaben) Low wages compared to European countries and well trained em-ployees Emerge of a middle class with increasing purchasing power Kenya plays a major role in the Eastern African economy. Mombasa is the most important seaport in Eastern Africa and Nairobi is the economic and political stronghold in this area. One big plus for exports to or investments in Kenya is that the country has a quite stable economy. Even there were some setbacks in the past (e. . violence during the last elections in 2008, global financial crisis) the outlook for Kenya’s economy and GDP is quite favourable for the future. Due to the expansionary of fiscal measures and by structural business reforms driven by the IMF the economy of Kenya will further improve in the past few years. Addi-tionally the recovery of agricultural production and investment in infrastructures will also contribute to the dynamism of the economy. These are quite good prerequisites for potential exporters and investors. Even if Kenya’s investment prospects are quite attractive they had been marred by political risk for a long time.

Violence during the election in 2008 frightened away many potential investors. The turning point for Kenya was the peaceful referendum in 2010 where a new country’s constitution was decided (? separation of powers). The peacefulness around the referendum had a huge positive impact on the country. Following this event Standard and Poors increased the credit rating to level B+ which brings Kenya closer to a score that foreign investors regard as an all-clear signal. Nevertheless exporters and investors need to be careful about the political situation in Kenya as new elections will take place in March 2013.

The electoral campaign carries significant risks of a resurgence of the violent confrontations within the ethnic groups in Kenya. Our opinion is that Kenya has a huge potential for exporters and investors. It has a solid eco-nomic basis and political stability is already improving, so we would export to or invest in Kenya. Our recommendation prior to do export or investment is the following Exporters/Investors… •… need to check the local partner/customer in Kenya carefully It is very important to have a reliable, reputable partner in Kenya.

Creditworthiness should be checked prior to doing business with them. •…insist on payment by letter of credit Especially when doing business with a customer/partner the first time it is advisable not to sell under open payment terms. It could than occur that the exporter would never receive his money. A letter of credit is used to eliminate the risk such as unfa-miliarity with the foreign country, customs or political instability. •… should not admit corruption Corruption in a foreign country is also indictable in Austria. Austrian exporters may also be reliable for their Kenyan partners.

Therefore it is advisable to agree on anti-corruption clauses in the contract. In case an Austrian exporter would admit corruption the export insurance will not be valid anymore. •… need to consider and watch the political situation When political unrests occur it may be advisable to stop exports until the unrests have calmed down. 6. SUMMARY MILESTONE HISTORYThe independent Republic of Kenya was founded in December 1963. JOMO KENYATTA was the first president (until 1978). Kenyatta’s long presidency provided the country with stability. GEOGRAPHIC FEATURES •580. 000 km2 •42 million inhabitants •Capital City: Nairobi Language: English, SwahiliThe Republic of Kenya is a country in East Africa that lies on the equator with the Indian Ocean to its south-east. It is bordered by Tanzania to the south, Uganda to the west, South Sudan to the north-west, Ethiopia to the north and Somalia to the north-east. Kenya has a land area of 580. 000 km2 (7 times bigger than Austria) and a population of about 43 million residents. It is to stress out that 75% of the population is younger than 30 years. Its capital and largest city is Nairobi. English is the language of choice when doing business in Kenya and is also used in Kenyan schools.

Swahili (also called Kiswahili) is the national language of Kenya. It is a unifying African language spoken by nearly 100 percent of the Kenyan population. CLIMATIC CONDITIONSKenya has a warm and humid climate along its coastline on the Indian Ocean, which changes to wildlife-rich savannah grasslands moving in-land towards the capital. Nairobi has a cool climate that gets colder ap-proaching Mount Kenya (5. 166m), which has three permanently snow-capped peaks. 1. OVERVIEW OF THE COUNTRY 2. POLITICAL CRITERIA 2002 transitional election 2007 accusation of electoral ma-nipulation resulted in violent riots in Kenya

August 2010: peaceful referen-dum in passing a new constitution Kenya has seen significant political changes in the last decade. The his-toric 2002 transitional election, in which the National Rainbow Coalition (NARC) defeated the long-ruling Kenya African National Union, created a major political shift and inspired optimism among citizens about the future of their country as a multiparty democracy. Kenyans went to polls in large numbers for the December 2007 general elections, but the elections turned violent after accusations of electoral manipulation. More than 1. 00 Kenyans died and more than 600. 000 were displaced. Peace was restored following the signing and enactment of the National Accord and the creation of the Grand Coalition Government (GCG), a power-sharing deal ending a political stalemate between President Mwai Kibaki of the Party of National Unity and Raila Odinga of the Orange Democratic Movement. The National Accord also set out an ambitious reform agenda including a review of the country’s constitution. In August 2010, a largely fair and peaceful referendum resulted in pass-ing a new constitution.

The new constitution was a landmark NEW ELECTIONS IN 2013 risk of new post-electoral vio-lence and rumorsachievement for the GCG as it enforces broad changes to the govern-ance framework, including: a new devolved system of government; reduced presidential powers, a reformed electoral process, more defined separation of powers between the three branches of government; land reform; and an expanded bill of rights. Government institutions, civil society, political parties and citizens face an ambitious and challenging period as they enact the reforms dictated by the new constitution.

Kenya’s political dynamics also are likely to be influenced by the outcome of the International Criminal Court (ICC) proceedings in which six prominent Kenyans are accused of involvement in the 2008 post-election violence. It is not yet clear whether the charges will be upheld by the ICC. Kenyan leaders are under increasing pressure to continue rebuilding their country and to avoid a repeat of the 2008 post-election crisis as the country heads into general elections in 2013. 3. KENYA’S DOMESTIC ECONOMY DOMESTIC ECONOMY The economy experienced moderate growth in 2011 but is expected to rise modestly in 2012 and 2013 respectively.

The year 2011 witnessed drastic currency depreciation and rapid inflation, both of which are ex-pected to stabilize in 2012 and 2013. Youth unemployment constitutes 70% of total unemployment. In 2011 Kenya’s economy recorded “checked” growth, primarily driven by financial intermediation, tourism, construction and agricultural sectors. Gross domestic product (GDP) growth rate for the first nine months was estimated at 4. 2%, down from 4. 9% in the same period in 2010. Overall, growth in 2011 was curtailed by an unstable macroeconomic environment characterized by rising inflation, exchange rate depreciation and high energy costs.

The country also experienced limited rainfall in the first half of 2011, which affected aggregate food production. In January 2011, the Kenyan government was forced to ask the IMF for support to counter the mounting financing pressures caused by a widening current account deficit. Certain other structural constraints, such as widespread corruption and poor infrastructure, also continued to undermine Kenya’s growth potential. 4. KENYA & FOREIGN ECONOMY IMPORT While Kenya had just spent 3. 3 billion US Dollars on merchandise im-ports in 99’, they imported goods worth to 13. 49 billion US Dollar in 2011 which is an increase of over 400%.

The depressed performance during the 2008-09 was due to a number of adverse shocks including the post election violence in early 2008, a severe drought that affect-ed most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010. IMPORT PRODUCTS The major import products for the year to June 2011 were oil, manu-factured goods, chemicals, machinery and transport equipment. The increase in the value of imports was mainly due to imports of oil (International oil prices increased) IMPORT PARTNERS1. United Arab Emirates -> 13. % 2. China -> 12,1% 3. India -> 11. 6% 4. South Africa -> 5,8% 5. United Kingdom 4,6% EXPORT Kenya had received 2. 2 Billion US Dollar in 99’, while they could in-crease their receivement for exports in 2011 to 5. 77 Billion US Dollar. This is an increase of about 260%. The depressed performance during the 2008-09 was due to a number of adverse shocks including the post-election violence in early 2008, a severe drought that affect-ed most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010.

EXPORT PRODUCTSThe agricultural sector continues to dominate Kenya’s economy, alt-hough only 15 percent of Kenya’s total land area has sufficient fertility and rainfall to be farmed. Tourism currently is Kenya’s third largest foreign-exchange earner after tea and horticulture (flowers) EXPORT PARTNERSCOMESA (East-South Africa) -> 35. % European Union ->30% United States -> 5,6% Pakistan -> 4,2% United Arab Emirates -> 4,1% IMBALANCE IN TRADING Kenya is largely a trade deficit country.

The negative balance of trade occurs because the country’s exports are vulnerable to both interna-tional prices and the weather conditions. The gap between imports and exports, also called current account deficit, now stands at above 10% of GDP – one of the highest in the world! Today, Kenya’s main exports do not even earn enough to pay for its oil imports. ECONOMIC COOPERATION, REGIONAL INTEGRATION & TRADE COMMON EXTERNAL TAFFIFF VISION STRATEGIC OPPORTUNITY

The East African Community (EAC) countries – Kenya, Tanzania, Uganda, Rwanda and Burundi – transformed into a fully-fledged and enforceable customs union on 1 January 2010 allowing for the free movement of goods, services, people and capital in a zone with a combined population of some 135 million people. The next phase of the integration will see the bloc enter into a Monetary Union and ultimately become a Political Federation of the East African States. They adopted a common external tariff (CET) with three bands: 0% (raw materials and capital goods), 10% (intermediate goods) and 25% (finished goods).

Tariffs of up to 100% are applicable to products that are deemed to be sensitive to member states. These include maize, rice, cement, sugar and dairy products. The Vision of EAC is a prosperous, competitive, secure, stable and politically united East Africa; and the Mission is to widen and deepen Economic, Political, Social and Culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investments. EAC has a combined population of more than 135 million people, land area of 1. 2 million square kilometres and a combined Gross Domestic Product of $74. 5 billion. This bears great strategic and geopolitical sig-nificance and prospects of a renewed and reinvigorated East African Community 5. CONCLUSION POTENTIAL OF KENYAAll in all Africa has a big potential for exports and investments as there are still big growth opportunities. Kenya has the greatest growth potential in the Sub-Saharan area after South Africa. However there are some recommendations to bear in mind (e. g. Letter of credit, creditworthiness check,…) ADVANTAGESRISKS

Stable economy and good eco-nomic prospectspolitical instability ? political riskBUT: increasing political instability since peaceful referendum in 2010 ? adoption of a new constitution Favourable strategic geographical position and access to export mar-kets (? Eastern Africa) corruption and impunity (=Straflosigkeit) BUT: High efforts to bring the problem un-der control: since 2010 ? Kenyan Anti-Corruption Commission forced high-profile cabinet ministers to step aside and the International Criminal Court publicly named perpetrators of violence (=Gewalttater) ADVANTAGESRISKS

Membership of the largest African common market, the EAC (Eastern African Community), COMESA and the Southern African Development Community (SADC) ? enables the free movement of goods and ser-vices across the member statesInadequate infrastructure for absorption of economic devel-opmentBUT: High efforts to catch up on infrastruc-ture English languagewidespread poverty ? crime Mombasa seaport ? most impor-tant seaport + Nairobi ? political and economic stronghold in the Eastern African Areacompanies are often undercap-italized ? risk of late or non-payment Small time difference Small taxes and levies (=Abgaben)

Low wages compared to European countries and well trained em-ployees Emerge of a middle class with increasing purchasing power OUR RECCOMENDATIONS Exporters/Investors… … need to check the local partner/customer in Kenya carefully It is very important to have a reliable, reputable partner in Kenya. Cre-ditworthiness should be checked prior to doing business with them. …insist on payment by letter of credit Especially when doing business with a customer/partner the first time it is advisable not to sell under open payment terms. It could than occur that the exporter would never receive his money.

A letter of credit is used to eliminate the risk such as unfamiliarity with the foreign country, customs or political instability. … should not admit corruption Corruption in a foreign country is also indictable in Austria. Austrian exporters may also be reliable for their Kenyan partners. Therefore it is advisable to agree on anti-corruption clauses in the contract. In case an Austrian exporter would admit corruption the export insur-ance will not be valid anymore. … need to consider and watch the political situation When political unrests occur it may be advisable to stop exports until the unrests have calmed down.

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Financing of University Education in Kenya

QN) With close reference to university education in Kenya, discuss the various means of financing education and evaluate the equity implications. To answer this claim, we start by defining critical terms so as to clearly get the full meaning of this assertion. Education is the process act or process of impacting or acquiring general knowledge, developing the powers of reasoning and judgement, and generally of preparing oneself or others intellectually for mature life.

It can also be defined as the process of acquiring desirable skills, attitudes and knowledge, as for a profession University education means the totality of general and specialized knowledge and skills that enable a university graduate to solve problems that he encounters in industry or to perform scientific research or pedagogical work within the area of specialized knowledge that he has acquired.

Financing refer to how people allocate their assets over time and conditions of certainity and uncertainity while education financing refers to any aspect of raising and spending revenue for educational purposes. Kenya as one of the developing countries in Afrca is faced with the problem of financing its education. Despite the role of the universities in teaching, undertaking research and training of skilled manpower for economic development, public and private universities in developing countries especially those in Africa are facing financial crisis.

Universities in Kenya gets financial aids from different sources which include; finances from parents, self finance, Banks-some banks give education loans to students or parents, cooperative societies, Constituency Development Funds[C. D. F], scholarships from educational institutions e. g universities, charitable organizations, HELB loans, Harambees, Donations, bursaries among others. Sources of educational funds are both internal and external.

Internal funds refers to finances from within the institution for example; Fees from the students, Income generating activities among others. While external funds come from outside the university for example; Religious organizations, Funds from central and local government, companies and organizations, scholarships, loans, International bodies, Non- Governmental Organization(NGO’s) etc.

Central and local government are generally the most important sources of educational finances. The government is generally the most important and crucial source of funding for university education. The government through the parliament passed a bill that seeks to introduce radical changes to higher education, establishing a Commission for University Education(C. U.

E) to be vested with wide-ranging powers as one of four new bodies running the sector in the country. The universities Act 2012 published on 24th September in Kenya gazette supplement 121 and signed by higher education, science and technology minister Margaret Kamar abolishes the decades old Commission for Higher Education(C. H. E) which has hitherto regulated the sector and replaces it with the Commission for University Education.

The universities Act 2012 stipulates that funds of a public university shall comprise: such sums as may be granted to the university by the parliament, such monies or assets as may accrue to or vest in the public university in the course of the exercise of its powers or the performance of its functions under this Act or under any other written law; and all monies from any other source provided for or donated or lent to the public university with the approval of the cabinet secretary responsible for finance and the cabinet secretary responsible for university education. this act mandates the central government to advance money to the public universities for running of the programmes and activities. The government gives grants to the public universities and this money is budgeted for, in the ministry for higher education budget and this is captured in the annual budget.

The grants are given to all universities oblivious of the programmes that they offer. The government through the parliament passed a bill that saw the creation of the Constituency Development Act that was aimed to rationalize development across the country by ensuring that all areas across Kenya had a fair share of the money set aside for development. Through the various committees established in each constituency, students in the universities are able to access bursaries to aid them in paying school fees. This bursary is given to people who are needy and who cannot afford tuition fees.

For the equal distribution of the funds, the Kenyan government is giving a lot of charters to the new mushrooming universities, this is to make sure all the regions in the country get access to higher education hence equity implications. Higher Education Loans Board(H. E. L. B) is another source of funding. H. E. L. B is a state corporation whose mandate is to source funds and provide loans, scholarships and bursaries to Kenyans studying in recognized institutions of Higher learning. It was established by an act of parliament a statute known as Higher Education Loans Board Act 1995,,and it was legally as Act number 3 of 1995. It came into existence on 21st July, 1995 through Kenya gazette supplement (CAP 213A). higher education loans board administers the student loans scheme.

The board is also empowered to recover all outstanding loans given to former university students by the government of Kenya since 1952 through Higher Education Loans Fund(HELF) and to establish a revolving fund from which funds can be drawn to lend out to needy Kenyan students pursuing higher education. The establishment of a revolving fund was expected to ease pressure on the exchequer in financing education which currently stands at 40% of the annual national budget. Its vision is to be the best preferred financier of Kenyans pursuing higher education and the mission is to provide affordable loans bursaries and scholarships to Kenyans studying in recognized institutions of higher education.

The board disburses loans to any Kenyan undergraduate students enrolled in government or self-sponsored programmes in Kenyan universities and other universities in other member states of east Africa community recognized by the Commision for higher education(CHE) The government through Higher Educations Loans Board ensures equity is maintained in acquisition of higher educaton since throough the electronic and online application of the sponsorship by the government, all needy students can apply for the loan irrespective of where they come from since the loan is granted depending on the level of need.

Besides the loan being given to only students who qualify to go to the university by getting the required cluster set by Joint Admission Board(JAB), also students who have attained the minimum entry requirements of being admitted by a university in Kenya which is a C+(plus) are able to access this grant hence allowing them to get university education through the Self-sponsored program and thus ensuring equity across the two programs. Financing of higher education in Kenya is also be done by institutions and organizations. For instance, Kenya Youth Education scholarship Fund has a mission to help needy and deserving youth with limited financial resources who display academic excellence and the desire to acquire practical skills and knowledge to enhance self reliance by pursuing higher education. The scholarship that they advance to the qualified candidates only caters for tuition and upkeep only but the cost of other accessories like personal effects is on the beneficiary.

This scholarship is mostly biased to women and the aim is to enhance equity so that the girl child can as well access higher education as their male counter parts who form a large chuck of the students in the universities. USAID is another institution that sponsors university in Kenya. Each year, it sponsors around 18 higher education scholarships to Kenyan students. These scholarship are offered to students from marginalized communities in Eastern and north Eastern regions and urban slums of Nairobi. The scholarship targets the minority muslim group. For one to qualify he or she must have attained the minimum of getting entry in university in Kenya. The aim for the cholarship is to bridge the gap that is so prevalent in these regions since most people don’t get the chance to pursue higher education because of the cultural dictates where girls are married off at an early age and where girl-child education is not treated with a lot of importance that it deserves. The effort by USAID ensures that most girls from these environments get university education and empowers. Some universities get direct offers of international and local scholarships. For instance Kenyatta university through the office of Orphans and Vulnerable students gives scholarships to total and/or partial orphans to enable them to pursue their university education with a lot of ease. The scholarship usually covers full tuition fees for students wwho are total orphans and have been admitted to Kenyatta university.

The selection is done after a careful scrutiny of documents to ascertain the level of need for the applicants. For the case of partial scholarships, the university pays 25% of the total tuition fees every year until the end of the degree program. The scholarship is given to students with proven high level of performance and genuine need for financial assistance. The university also caters for other students who have been admitted to the university and are already enrolled in one of the its programs. It gives internal butsaries to students with financial need based on the level of vulnerable students.

Also, the university awards post graduate scholarships which cover the tuition fees for masters programs. The scholarship is awarded based on higher academic performance. Many universities have followed suit and are awarding scholarships to their students. This effort helps in ensuring that as many people are able to access university education even those who come from poor and destitute backgrounds because when their tuition fees is paid for, then they find it very easy to get some money for upkeep but if they have problems of fees payment, then their education may be disrupted and may be halted.

Other organizations like UNESCO have fellowships that are offered to both students and teachers who want to pursue higher education in fields that enhance sustainable human development and foster international understanding and a culture of peace. It offers fellowships in the following thematic areas; education, natural sciences, social, human sciences, culture, communication and information. The aim is to enhance equity and access of university education since these are mostly given to students who exhibit some level of financial need and are high performers in academics.