What is the likely impact of the Statute Law (Miscellaneous Amendments Act 2013) on Kenya?

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Introduction On 30th October 2013, the Government published an omnibus Statute Law (Miscellaneous Amendments Act 2013). These amendments undermine the spirit and letter of the Public Benefits Organisations Act 2012. The Act received Presidential Assent on 13th January 2013 and is yet to be implemented. The Act was generated out a four year consultative process involving NGOs/PBOs and the Government. The new Amendments include; 1) Awarding the regulator discretionary powers to impose terms and conditions for the grant of certificates; 2) Prohibitions on PBOs/NGOs from receiving more than 15% of its funding from external donors; 3) Prohibitions on PBOs/NGOs from receiving funding directly, mandating that all funds are received by the proposed Federation composed of all registered PBOs; 3) Altering the composition of the Regulatory Authoritys governance body in favor of the executive The Miscellaneous Amendments Act 2013 that relate to the Public Benefits Organisations Act 2012 therefore drastically alter the intention of the PBO Act. If passed in its current form, the Amendments are likely to impact on several areas of the Kenyan economy and society. Impact on a valuable sector of Kenyan society 1. The PBO/NGO sector can be traced back as far as the self-help and welfare societies of the 1920s. The advent of foreign funded PBO/NGO s took place in the 1970s with several programmes addressing the national challenges of disease, illiteracy and poverty. 2. With Government, PBO/NGO s have strongly contributed to the achievements Kenya has made against the Millennium Development Goals. 3. In 2013, the NGO Coordination Bureau documents a sector that comprises of 8,260 organisations and a value to the national economy of Kshs 80 billion in 2012. The sector employs over 200,000 of which most are primarily Kenyan. The sector grows by 500 organisations each year. Funding to the sector is actually growing. 2011/2 saw a 12.2% increase in funding. 4. The sector is funded by parent PBO/NGO s (29%) and non-Kenyan Governments (21%). 24%, 33% and 24% of the funding comes from Europe, North America and the rest of Africa respectively. It is spent on health and HIV/AIDS (32%), relief (15%), children (9%), agriculture (7%) among others. 5. It is ironic that the regulatory arguments in favour of the Act are being voiced at a time when NGO annual reporting compliance is at 80% up from 67% in 2011.

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Impact on public finance and the macro-economy 6. Currently funding of Kshs 80 billion to the PBO/NGO sector currently represents 15% of total GDP. Denial of foreign funding to the PBO/NGO Sector is likely to have serious implications on the stability of the Kenyan shilling. An unstable shilling will hurt economic growth, development and raise the cost of importing goods and services. 7. Denial of foreign funding will lead to dismissal of the majority of the 200,000 staff employed by this sector. This will have three direct consequences. Firstly, the Government will create further unemployment in an already strained job market. Secondly, this will have a knock on effect on the wage-earners families and dependents. Thirdly, the Act seems set to deny the Government Kshs 55 billion per annum in taxable income of staff salaries. 8. Companies in the agro-business, service, banking, construction, manufacturing and hotel industries currently benefit from the activities of the PBO/NGO sectors. Organisations such as World Vision, Save the Children and Care International among others on average bank and spend upwards of Kshs 4 billion shillings each year. 9. At a very rough estimate, a small number of key INGOs alone contribute to the following sectors. The Act places this as risk;
Sector
Child protection Education Gender Health, AIDS/HIV & Nutrition Food Security Governance & Climate Change Water & Sanitation Conflict Management

Areas in Kenya
Incl. Mandera, Wajir, Garissa, Meru, Nairobi. Incl. Marsabit, Nairobi, Mombasa, Kisumu, Migori, Homa Bay Incl. Nairobi, Nakuru, Kisumu, Kitui, Homa Bay, Meru Incl. Nairobi, Mombasa, Kilifi, Taita Taveta, Lamu, Kwale, Homa Bay, Migori Incl. Marsabit, Nairobi, Mombasa, Kisumu, Migori, Wajir, Turkana, Tharaka Nithi Incl. Kitui, Kajiado, Wajir, Isiolo, Turkana, Tana River, and West Pokot Incl. Isiolo, Samburu, Tana River, Mukuru, Lagdera, Garissa Incl. Isiolo, Samburu, Tana River, Mukuru, Lagdera, Garissa, Turkana TOTAL

Financial investment (US$) 51,580,000 2,074,527 820,000 86,308,047 20,977,943 1,447,664 7,013,916 800,000 USD$171,022,097 Kshs 14.3 billion

Population reached
56,000 TBD

8,943,450 631,000 497,960 430,000 TBD 10,558,410

10. Predictably, Kenya will lose its envious status as a regional hub for a number of International NGOs as they relocate to a more conducive environment, most probably Tanzania. Impact on international relationships 11. Attempts to regulate foreign funding will lead to a donor standoff not just for non-state actor funding but for the state as well. Kenya has experienced a donor standoff in 1982, 1992 and 1997 with deteriorating impact on essential services, agriculture and rural development. Given the current huge public deficit, this will further compound the Governments inability to balance its budget and deliver on the mandate given in the March General Election.

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12. In 2013, development assistance to the Government of Kenya plays a critical role in providing essential services, infrastructure and devolution.
Ministry Health Education Agriculture and Livestock Transportation Environment, Wildlife National Treasury Absolute ODA Value and % Kshs 15 billion (22%) Kshs 30.4 billion (24%) Kshs 26.5 billion (14.7%) Kshs 104.4 billion (56%) Kshs 43 billion (40%) 42% Development budget Examples of programmes Expansion of Wajir and Kenyatta National Hospital among other health, HIV/AIDS programmes Includes early childhood ed, free primary education Includes horticulture development project, KARI, National Irrigation Board, Marine Fisheries Institute Kerio Valley Development Association, Ewaso Nyiro North Development Water Services Board

13. With the Governments currently failing to absorb and fund up to 30% of development assistance, it is unlikely that this funding will be redirected to the proposed Federation. This funding will be re-allocated to other parts of Africa instead. Impact on harmonious relationships between State and PBO/NGO s 14. The Miscellaneous Amendments Act places the Government on a collision course with the PBO/NGO sector. The Amendments fundamentally shift the spirit of the PBO Act, jeopardizing the broad agreement reached on the PBO Act 2013 over the last four years. 15. The amendments also contradict Government Sessional paper 2006 and the Jubilee Manifesto. The Jubilee states that a Jubilee Government will manage the sector based on best international practices. The imminent closure of PBO/NGO programmes should the Act pass, will place the success of an ambitious Jubilee Manifesto and Vision 2013 further out of reach. 16. Ironically, calls for the need to increase regulations of the sector come at a time when accordingly to the Government of Kenyas NGO Coordination Bureau PBO/NGO annual reporting compliance is up to 80%, 13% more than 2011. PBO/NGO s have also set up Viwango, their own self-regulatory and standards setting association. Implications for microfinance financing and deposit lending for rural farmers 17. A number of PBO/NGO s such as FAULU, K-REP, and Womens Finance Trust among others paved the way for the mainstream banks to access rural farmers and entrepreneurs. They continue to provide training, soft-loans and other technical assistance for hundreds of thousands of low income farmers and urban entrepreneurs. Many of these are potential partners for the Government youth and women funds. Implications for Health and HIV/AIDS sector

18. 240,000 people are living with HIV accessing ARV treatment through PBO/NGO s. 100% of the Government facilities are supported by PBO/NGO s. Should funding be capped at 15%, maternal health goals will not be achieved, unsafe sex will increase Kenyas disease burden and we will see increased public demand for the national health budget to cover for HIV as well as increased child and adult deaths. 19. 1,757 CSOs deliver public health programmes and services in Kenya. They supplement overstretched and overworked health facilities. Should they close, the service delivery burden on County Governments will increase.

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Implications for Water and Sanitation sector 20. Over a hundred PBO/NGO s currently provide training, technical assistance and financing to projects servicing 290,000 Kenyans across the country especially in semi arid and arid areas. A further 400,000 men, women and children refugees are currently being supported in camps such as Daadab. Implications for Elderly 21. The rights of the elderly are expressly provided for by the constitution and Sessional Paper of 2009 provides a comprehensive framework for supporting this vulnerable group. The closure of PBO/NGO programmes jeopardizes this comprehensive framework at a time when the number of elderly people are set to increase from 1.4 million to 2.2 million by 2020. There is no evidence that the state is able to replace the services currently being provided by PBO/NGO s. Implications for Education sector 22. Contribution and support of Public Benefit Organisations (PBOs)/Non-Governmental Organisations (NGOs) and Faith Based Organisations (FBOs) are in three main areas namely Provision of Basic Education and Training, SNE, scholarships/bursaries, governance and budget support through NESSP. 23. Public Benefit Organisations provide basic education and training programmes to 2 million children (aged 613) who are out of school most of whom are in the urban informal settlements of Nairobi, Mombasa and Kisumu, the arid-districts of Northern Kenya and other pockets of poverty. Additional services provided include shelter, health, nutrition, counseling and protection, to school age children. In Nairobis informal settlements alone PBO/NGO s directly support up to 800 ABET centers (formally non formal schools and vocational training centers) with up to 192,000 learners, with close to 7500 teachers. Each teacher earns an average of Kshs. 6000 paid directly by PBO/NGO s and communities.

24. Many of Government 3,000 special needs education centers, special schools and integrated
programmes in public schools and EARCs rely heavily on support from non-state actors. Just one actor, the Drivers of Accountability Programme has committed up to 4,852,592 (approximately Kshs. 655,099, 920) between 2012 and 2015 to support 8 PBO/NGO s and 2 State agencies to work with close to 4500 public schools, reaching or benefiting close to 500,000 learners or children in the following areas.

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