PROJECT INFORMATION DOCUMENT (PID)

APPRAISAL STAGE

Report No.: 43464

Project Name

/ Western Kenya CDD and Flood Mitigation Project
Region / AFRICA
Sector / General agriculture, fishing and forestry sector (20%); Flood protection (20%); Irrigation and drainage (20%); Other social services (20%); General water, sanitation and flood protection sector (20%)
Project ID / P074106
Borrower(s) / MINISTRY OF FINANCE
Implementing Agency
Government of Kenya
Ministry of Finance
The Treasury
Kenya
Office of the President
PS. Special Programmes
Harambee House
Kenya
Environment Category / [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / December 21, 2006
Date of Appraisal Authorization / January 11, 2007
Date of Board Approval / March 27, 2007

1.  Country and Sector Background

1. Economic growth has been varied and unequal. Kenya has experienced varied and unequal growth since independence in 1963. In its early years of independence, Kenya was the most prosperous country in East Africa, its GDP per capita rising by 38 percent between 1960 and 1980. The following two decades to 2000, however, recorded a zero increase in per capita GDP, while per capita income in 2003, at US$360, was lower than in 1990. Poverty in Kenya is widespread; more than half (52 percent) of the country’s population lives below the poverty line. Kenya’s social indicators have declined in tandem with the economy: infant mortality rose from 64 (per 1,000 births) in 1990 to 79 in 2004. Life expectancy declined from 58 in 1990 to 48 years in 2004, in part due to the HIV/AIDS epidemic. The persisting hunger of children is evidenced in the 20 percent of under-fives who are underweight, and almost one in three (31 percent) who are wasting (World Development Indicators, 2006). These are averages, but Kenya is a highly unequal society, with exclusion reflecting stratification by class, gender, and region. Kenya’s Gini coefficient for household income, at 0.43, is much higher than that of its neighbors, Ethiopia and Tanzania, whose coefficients stand at 0.30 and 0.35 respectively. This ranks Kenya as one of the more unequal countries in the world and in Sub-Saharan Africa.

2. The recent record on governance and anticorruption is mixed. Poor governance and endemic corruption have been major obstacles to poverty alleviation and development in Kenya in the 1980s and 1990s. Since coming to power in 2003, however, the current Government has instituted a number of bold measures and initiatives in fulfillment of its campaign pledge to halt corruption. While it is difficult to assess and agree on the results that these measures have generated, empirical evidence indicates that corruption fell in 2003-04 but has stagnated since then

3. Recent macroeconomic management has been good. Good macroeconomic management and the reforms implemented by the Government since 2003 have contributed to the strongest economic growth (5.8 percent in 2005 compared to 2.8 percent in 2003) in Kenya since the 1980s. But while growth has rebounded, much higher broad-based growth (7-8 percent) and a targeted focus on inequity are needed if measurable and effective gains are to be achieved in reducing poverty. The economic transition since 2003 is a product of the Government of Kenya’s Investment Program for the Economic Recovery Strategy for Wealth and Employment Creation (IP-ERS, its Poverty Strategy Paper) centered on three interlinked pillars: promoting economic growth, reducing poverty and inequality, and promoting good governance.

4. Western Kenya has a high incidence of poverty, but also has a rich natural resource endowment. While the Western Kenyan region is endowed with natural resources such as forests, rivers and lakes, which should be adequate for poverty reduction, poverty and vulnerability, nonetheless afflict many in the region. Particular features that make communities in Western Kenya vulnerable include flooding, disease, and degradation of natural resources, especially land. According to “Geographic Dimensions of Well-Being in Kenya: Who and Where are the Poor?” (Central Bureau of Statistics, 2005), the poverty incidence in Western Province is 61 percent, and in Nyanza 64.6 percent. The urban centers of Western Kenya have the highest incidence of poverty at 80 percent. The situation is aggravated by perennial flooding, mismanagement of natural resources, and the HIV/AIDS pandemic. Women and children (particularly orphans and widows) are especially vulnerable. Malaria rates are high, and impose an additional burden on poor households. Flood areas are particularly prone to a culture of dependency.

5. Western Kenya is the most flood prone region in Kenya. A combination of poor land-use practices, deforestation and pollution in the watershed catchment areas, and accumulation of silt in the lower sections of the main rivers causes floods in areas such as Budalang’i and Bunyala. In addition, the Nzoia catchment in western Kenya is the largest of the four sub-basins of Lake Victoria, an important economic resource internationally and to the local communities. Floods occur during the long rainy seasons, and due to natural resource degradation, are now more frequent than before. Such frequent flooding creates problems in water supply and sanitation (WSS), agriculture, health, education, communication, and transport. Although communities have invented many ways to cope with the floods, recurrent interruption of economic activity and loss of assets divert scarce resources from alternative and more productive uses.

6. Western Kenyan stakeholders participated in the Poverty Reduction Strategy consultations. During the preparation of Kenya’s Poverty Reduction Strategy in 2001, the Government together with partners carried out consultations among key stakeholders, in particular the poor. Participants enumerated factors contributing to the high levels of poverty in the area: high population density, excessively top-down developmental approaches, high burden of diseases such as malaria, gender disparities in empowerment, lack of diversified investments, backward technology, soil erosion and deforestation, frequent floods, lack of opportunities for the youth, increasing dependency, poor governance, lack of information, poor job skills, lack of entrepreneurial culture, and collapse of various critical institutions.

7. Community level developmental capacity, involvement, and resources will be enhanced. The high levels of poverty and vulnerability as well increasing population have compromised the capacities of local communities to manage their resources (especially land, forests, and water). The proposed Western Kenya Community Driven Development and Flood Mitigation (WKCDD/FM) Project will address the causal factors that produce recurrent floods and simultaneously help communities to identify livelihoods that can be productively pursued in a more stable natural environment.

  1. Rationale for Bank involvement

8. The proposed WKCDD/FM operation supports the Bank’s Country Assistance Strategy (CAS) and more recently, the CAS Progress Report. In June 2004, the World Bank’s Board endorsed a CAS for Kenya. The CAS is a strategy of reengagement, and is closely linked with the Government’s IP-ERS. The CAS Progress Report, which the Board is expected to consider in March 2007, continues the Bank Group’s strategic emphasis on growth and poverty reduction but gives enhanced attention to equity and governance. The proposed project, with its focus on enhancing the capacity and resources available to poor and vulnerable communities, is consistent with the proposed CAS Progress Report. The Bank’s CAS proposes to help Kenya achieve its developmental objectives through four key areas of support, reflecting the Bank Group’s comparative advantage in its partnership with the Government of Kenya and other development partners. These pillars are:

(a) strengthening public sector management and accountability, parastatal reform and privatization, and monitoring and evaluation (M&E) capacity;

(b) reducing the cost of doing business and improving the investment climate, including support for restructuring the financial sector, promoting private sector development, improving infrastructure, and reducing barriers to trade;

(c) reducing vulnerability and strengthening communities, including support for increased agricultural productivity and competitiveness, improved environmental management, strengthened local governments, and reducing poverty in the poorest rural areas and urban slums; and

(d) investing in people, including support for the education and health sectors and the fight against HIV/AIDS.

9. The WKCDD/FM Project will contribute to the promotion of equity in Kenya. The World Bank’s strategy in Kenya seeks not only to assist the Government in accelerating overall economic growth, but also to ensure that growth takes place in a way that is both environmentally sustainable and inclusive of the poor. The project will contribute to greater equity in Kenya by enhancing capacity, investment, and opportunity for and by targeted communities. Meaningful partnership with communities will be built upon understanding of the needs and priorities of the constituent groups, and conferring voice in the planning and implementation of project activities, so as to ensure ownership and sustainability.

3.  Objectives

10. Local community empowerment for wealth creation, particularly targeted towards vulnerable people, is a central objective of the project. Therefore, the objective of project is to empower local communities of men and women to engage in sustainable and wealth creating livelihood activities and reduce their vulnerability to flooding. Progress towards achieving the project development objective (PDO) will be monitored through a set of indicators (see Annex 4 for a full description of the results framework and monitoring). These include:

(a) number of men and women actively participating in decision making at community and district levels;

(b) percent of community and youth investment projects rated satisfactory or better by participating communities;

(c) percentage increase in real income of households in project intervention areas; and

(d) percentage reduction of financial cost induced by average annual flooding in the Budalangi flood plain (property damages, agricultural damages and resettlement costs).

4.  Description

Component 1: Community Driven Development (US$45.8 million, of which US$37.1 million funded by International Development Association [IDA])

11. Community driven investments. The CDD component will support community-prioritized investment projects to improve livelihoods and build demand and capacity development at the community and district levels.

12. Subcomponent 1.1 - Prioritized Investments and Capacity Building at Community Level (US$33.2 million, of which US$26.0 million funded by IDA). This component will finance livelihoods-based micro-projects identified by communities and enhance their capacities to plan, manage and implement them. Over the eight years, 480 communities would have the opportunity to implement one or more micro-projects, with an average of US$15,000 made available for each micro-project. Given the availability of other sources of funding for social infrastructure such as the Constituency Development Fund (CDF), project financing will focus on supporting the promotion of livelihoods and income generating activities (see Annex 13), and assistance to vulnerable groups. The communities can select from a wide range of potential activities that are assessed to be viable, such as mushroom growing, chicken farming, goat keeping, craft making, basket weaving, medicinal plants (including processing), indigenous vegetables, beekeeping, soap making, services (such as Cyber Cafes, catering, and silk worm production. Micro-project grants will be provided to groups rather than to individuals, so as to spread the benefits to a larger number of people, facilitate shared learning, and to finance assets that could not be financed by a grant to an individual. Candidate investments will also include those that raise the productive potential of the community through improved technical knowledge, productivity, or marketing. For example, support in feeder road rehabilitation or processing and marketing facilities would be considered. Support may also include the development of local organizations and the creation of linkages between communities and the private sector. Initiatives supporting vulnerable groups will also be eligible for funding. A contribution from the beneficiaries of 30 percent of the subproject cost will be required, either in cash or in kind. Each micro-project will incorporate a mechanism for social monitoring and disclosure of public information to ensure transparency and accountability in the use of project funds.

13. Targeting involves demographic and spatial considerations. A GIS-based technology was used during project preparation to identify localities where the needs are greatest. The GIS-based technology will be employed during project implementation for supervision, impact evaluation (using randomized design), and to strengthen transparency. The procedure to be adopted for selecting communities within the target area will assure both poverty targeting and spatial representativeness. Targeted communities will be randomly selected from the poorest strata as measured by the most recent poverty data, and spread evenly across constituencies. Communities will be defined in terms of geographical location, utilization of shared resources, and self-characterization.

14. Mobile advisory teams will provide technical support and build capacity. The critical facilitation and capacity building support for participating communities will be provided by three Mobile Advisory Teams (MATs) in each project district, comprising technical personnel from district level government and civil society organizations (CSO). MATs will support communities in the preparation of Community Action Plans (CAPs) through a process of Participatory Rural Appraisal (PRA) that includes a range of community interest groups, especially the vulnerable. MATs will also be responsible for building communities’ capacity to organize, manage their own contributions, and plan, implement and monitor the selected sub-projects. Communities will exchange visits to enable members to learn from each other. The detailed design of community facilitation and planning processes and procedures will incorporate best practice established in the Kenya Arid Lands Resource Management Project (ALRMP), Credit 2797-KE, as well as the Common Interest Group approach being implemented by the Kenya Agricultural Productivity Project (KAPP), Credit 3929-KE.

15. To participate in the project, CSOs must have a good track record. CSOs will participate in this sub-component in several capacities; e.g., as members of MATs, as trainers for both communities and MAT members, as communication agents, and as M&E implementers. They will be contracted for these functions. Only local CSOs already established in the project districts and with demonstrated capacities and strong track records of performance will be eligible.

16. WKCDD/FM also provides targeted support to youth. Young people in the project area face particular challenges related to unemployment, livelihoods, health, and security. The component will include a special focus on youth inclusion, with US$1 million dedicated to support micro-projects of up to US$5,000 undertaken for and by young people.

17. Community interventions to counter malaria will be integrated into the CDD approach. Malaria initiatives, including training and investments up to US$5,000 per community, would be funded under the project. These include: (a) information, education and communication (IEC) for malaria control; (b) scaling up of Long Lasting Insecticide-Treated Nets (LLIN) with increased coverage and re-treatment program for existing regular Insecticide-Treated Nets (ITN) , (c) piloting the use of community owned resource persons (CORPS) for community-based management of fever with Coartem (the newly adopted anti malarial therapy in Kenya); (d) indoor residual spraying (IRS) where appropriate and in close coordination with the IRS program supported by the Government and other development partners; and (e) source reduction and larvicidal measures (where appropriate). Communities will be encouraged to implement a combination of the above interventions (or at least the first three) as part of their micro-projects in an integrated approach. The Integrated Vector Management Plan and a district mapping of malaria breeding sites will provide guidance to communities as to where IRS and source reduction should be conducted. At the national level, the Ministry of Health (MOH) and the Malaria Inter-Agency Coordinating Committee (MICC) will provide technical guidance and coordination respectively for community malaria interventions under the project. At the local level implementation will be closely coordinated with the local health system structure such as the District Health Management Teams and the Village Health Committees (see Annex 14 for more details on malaria interventions).