Kenya Enhanced Market Analysis - September 2018

Report
from Famine Early Warning System Network
Published on 30 Sep 2018 View Original

Executive Summary

Between May and July 2018, the Famine Early Warning Systems Network (FEWS NET) carried out an Enhanced Market Analysis (EMA) in Turkana, Marsabit, Isiolo, Baringo, Samburu, and Kitui counties (Figure 2), Kenya in advance of a FY19 FFP-funded Development Food Security Activity (DFSA), which is anticipated to include a mix of Title II and Community Development Funds.

Following the scope of work, the assessment covered five broad themes: (1) households’ access to food and income; (2) Market Structure, Conduct, and Performance of key staple foods and livestock; (3) availability of infrastructure and supporting services required for the success of a range of modality options; (4) food assistance context; and (5) experiences with different modalities. The assessment was informed by primary and secondary data collection and analysis. Table 1 shows a summary of key findings for these themes.

Livelihoods are predominantly pastoral in Turkana, Marsabit, Isiolo, Samburu, and part of Baringo counties. However, self-employment and casual labor employment represent the main sources of income for very poor and poor households. In part of Baringo and Kitui, where cropping activities are feasible, agricultural production and self-employment are the main sources of income. Market purchases are the main ways to access food across counties, but purchasing power is low.

Larger markets and markets along transport routes are competitive and integrated with other markets within the area of interest (AOI), Kenya, and where relevant, markets in neighboring countries. More isolated markets are thin, characterized by few buyers and sellers, and in some cases, may face accessibility constraints during the rainy season. Prices vary seasonally, with market actors adjusting their activities for known seasonal trends. High transport costs are a major contributor to price trends. Traders’ profits across primary, secondary, and tertiary markets are based mainly on turnover capacity, rather than on marketing margins, as consumers are price sensitive and competition exists.

Access to services, including financial service and mobile network connectivity, is greatest along the main roads. However, the expansion of mobile money applications (M-Pesa) has brought financial services closer to more remote populations. Growth in this sector has been supported by the widespread use of mobile phones, use of M-Pesa, and the expansion in bank coverage.

Given the recent humanitarian needs posed by the 2016/2017 droughts, several actors are/have been recently involved in food assistance activities in the AOI. Modalities have been varied with cash transfers (conditional and unconditional, including Cash for Assets-CFA) and in-kind food assistance (general food distribution, Food for Assets-FFA) being the most prevalent. Generally, no evident limitations in infrastructure and supporting services impact the feasibility of in-kind assistance, nor of cash transfers in areas with functioning markets. However, cash transfers are preferred over other modalities across stakeholders and implemented in areas where food is more readily available and where beneficiaries have reasonable access to markets. WFP recommends cash and vouchers can be acceptable in areas in the AOI where beneficiaries live no more than 30km away from the market. The provision of adequate cash transfer values to meet minimum food needs (aligned against an in-kind food basket calculation) is a challenge, limiting the effectiveness of the intervention, although not feasibility. The National Food and Nutrition Security Policy (2011) provides a framework for food assistance activities in Kenya, pointing to assistance options that can save lives, support recovery, rehabilitation, and restoration of livelihoods, as well as broader development in the country.