The East African Inability to Benefit from Fair Trade. Seeking for a Solution!

Richard Ochanda and Simon Murira

Fair trade has been used for quite sometimes now by rich countries as a way to distribute wealth to the poor countries. Fair Trade is an organized social movement and mrket-based approach that aims to help producers in poor countries obtain better trading conditions and market accessibility. The movement advocates the payment of a higher price to producers as well as social and environmental standards. It focuses in particular on exports such as handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit. chocolate and flowers.

Some economists see fair trade as an improvement of the market and hence regard it as a distortion. This distortion arises because of tempering with the equilibrium price which is a basis of exchange. Other economists look at fair trade in the light of moral exchange where the aspect of sharing is promoted. The second view is in line with the teaching of the recent encyclical Caritas in Veritate “Profit is useful if it serves as a means towards an end that provides a sense both of how to produce and how to make good use of it. Once profit becomes the exclusive goal, … it risks destroying wealth and ends up creating poverty. Economic development … is meant to produce real growth, of benefit to everyone and genuinely sustainable (21).”

Buignon a former world bank Chief Economist was able to illustrate the fact that distribution is good for economy. It is both good for those who have more and those who are being helped to get more. The welfare of both gets increased and the world becomes a better place to live.

However despite the noble intentions by this powerful distributive tool, it is not able to reach the poorest sections of the world in Africa. This problem is not attributed to problems inherent in this tool but it is more attributable to the problems inherent the poor countries themselves. Some of these problems have been so major in that fair trade organizations are becoming worried that their efforts will not really bring the expected benefits in Africa. However, other continents are fairing better in the fair trade issues. Because they are better organized and their products are more quality.

The common problems in Africa include communication, infrastructure and production real time issues. The technical problems relating to fair trade include product development, marketing research,   logistics management, information problems (both lack and usage), poor knowledge systems, inability to quickly adapt to new concepts, poor access to finances and creativity and innovation problems.

African problems in working with the fair trade movements have increased because of lack of interest of local research and capacity building firms to help out. Secondly, producer associations are very weak and hence this promotes their inability to work with the fair trade organizations big time. Lastly, capacity is another issue of concern. Producers have always disappointed the fair trade organizations because of their inability to meet the quality and quantity specified in their agreements in the time required. There are also legal quagmires that have to be dealt with. Can these problems be solved?  Yes by organizing effective producer cooperatives that network with each other (the fears of collaboration need to be dealt with).

The Enterprise of Employment and Wealth Creation in Kenya

Richard  Ochanda and Paul W. Kisolo

Statistics have placed the poverty incidence at 56% in Kenya. This figure has remained constant over a period of 5 years. These statistics could simply be translated to mean that people have little or no income at their disposal and hence may not be in a position to purchase what they need or even be able to access needful services.

Kenya is a diverse country and each region has different economic activity taking place. The entire North of Kenya is generally considered to be semi arid region and the people of these places generally engage in pastoralism as their main economic activity. The challenges in the Northern Region include water, animal rustling, severe dry spells amongst others. These challenges in many cases have contributed to severe negative repercussions on the economic livelihood. The Western Kenya is made up of the Nyanza and Western Province regions. These regions are mainly agricultural areas. The Nyanza Province is endowed with the Lake Victoria and hence has booming fishing activities save for the recent hyacinth problem. Some areas of Nyanza experience floods time and again. Whenever these happen people’s activities are affected negatively. In Nyanza there are also tea plantations.

The Coast is famous for its touristic attractions. The natural beaches, coral reefs and the vast Indian Ocean are quite a resource. This extends from Mombasa to Lamu and Malindi. As one proceeds further North there is Garsen and Tana River areas. These areas are also prone to floods amongst other problems. The Central Kenya is made up of mainly agricultural activities. It is believed that this region has a big contribution to Kenya’s economy. The Rift Valley Region on the other hand is believed to be the place that Feeds Kenya i.e. the Granary of Kenya.

The Government in a bid to reduce poverty aims at creating 100,000 jobs per year. There are many challenges entailed in job creation and hence ultimately in trying to reduce the poverty incidence in Kenya. Looking at the diversities prevalent in each Kenyan region it becomes evident that each region has strengths which can be reinforced and weaknesses that need addressing in order to ensure that entrepreneurship finds fertile ground to grow in all these regions. The government strategy for job creation therefore should aim at the entire Kenya. Looking at the possibilities of providing people with employment in their own localities.

The corporate sector in Kenya is only able to absorb less than 10% of the employable population in Kenya. This leaves out so much of the employable finding themselves jobless. Despite the gravity of this situation, something positive has emerged and that is people have started developing simple efforts and technologies to occupy themselves constructively and secondly to provide them with a means of livelihood. It is important that these small initiatives are assisted to survive if we are to create a sustainable economy and to create jobs and ultimately wealth.

The biggest challenge faced by Kenya today is to ensure that the entire economy is geared towards wealth creation. How can a subsistence economy create any wealth at all? How can it generate an aggregation of surpluses when all that is generated today is all consumed and in essence cannot be in a position to provide for all the needs in the economy? Wealth creation as has been explored above is an accumulation of an economy’s savings over a period of time. Wealth can be seen in the form of capital investment, improved infrastructure, improved access to social amenities etc. Linking this aspect of wealth creation to community based endeavors means that much has to be done.

It is a fact that the community based endeavors made by the poor are not able to transcend community boundaries and ultimately enter into the economic and the political arena. This is also experienced in Kenya where self help groups started to address a specific community need hardly survive a year.  How possible would it be to create strategies that would make these initiatives survive and ultimately contribute to this problem of wealth creation for the nation? The fact is that these initiatives are barely able to meet the subsistence needs of their members and therefore find it difficult to survive in the long run. A pure situation on the ground is that these initiatives accumulate deficits over a very long period of time. This situation depletes their working capital and ultimately the ability to accumulate wealth. Initiatives that are able to survive the capital depletion problem, may find themselves in heavy reliance to injected resources from a particular donor. These types of resources do not permit for wealth creation as they encourage 100% amortization during a particular financial period. The resources may also not be invested in any other place when idle.

It is a fact that the needs in Kenya are quite varied and there is a big need for entrepreneurs who look beyond profit appropriation to themselves but who see their role as providing for solutions for the socio economic plight facing our communities. These are the types of entrepreneurs who will concentrate on providing social benefits on one hand and ensure that the initiatives they have built survive on the other. So far, there are already many institutes surviving in this way in Kenya today. Many street children homes in Kenya and Projects addressing HIV/AIDS also survive through their own internally generated resources. These initiatives need to be encouraged in various ways. A collaboration between the government, the corporate sector and the civil society will be important to provide a conducive atmosphere for the survival of these initiatives. It is important to note that when the public is empowered through job creation; the purchasing power improves, more wealth is created in the economy, through enhanced ability to save and hence they may be able to increase their stock of tangible wealth.

Very Few Women in Politics in Kenya

KENYA: Nation Lags Behind in Women Political Representation

NAIROBI, March 26, 2010 ( CISA)

The church must engage in the fight for gender parity, the chairperson of the League of Kenya Women Voters, Alice Wahome has said.

Wahome was speaking during a gender forum in Nairobi on the deliberations and key outcomes of the just concluded 54th Commission on the Status of Women (CWS) in New York attended by over 3, 000 women from all over the world from March 1 to 12.

She said Kenya lagged behind in political empowerment and is at the bottom with only 9.0 percent representation as compared to a country like Rwanda which has achieved gender equality.

Wahome said that political goodwill is the key to achieving gender parity, adding that the current legislation in the country is not gender friendly.

Regina Karega, Chairperson National Commission on Gender and Development gave an overview of the Kenyan position paper presented at the New York on the following topics: Women, Poverty and the Economy, Education and Training of Women, Women and Health Violence against Women, and Women and Armed Conflict.

Other topics were: Women in Power and Decision-Making, Institutional Mechanisms for the Advancement of Women and Human Rights of Women, Women the Media, Women and the Environment and the Girl-child.

During the forum, Naisola Likimani, Advocacy Officer in African Women’s Development and Communication Network (FEMNET) expressed dissatisfaction with the time allocated to present issues in CSW. She said the time was not enough to air key issues that affected women.

She mentioned that seven resolutions were made at the CSW conference one of which was to start a new UN entity for women.

Other 6 resolutions made at the end of CSW on March 12 include: Assistance for Palestinian women, Release of women and children during hostage taking, maternal mortality and morbidity, Economic Empowerment, Women, the Girl Child and HIV/AIDS and Ending Female Genital Mutilation.

While Kenya continues to perform dismally in increasing the number of women in key positions of leadership, neighbouring Uganda and Tanzania have made giant steps in this area.

Uganda’s constitution has enshrined an affirmative action measure to boost female representation in government and public service. Through the system established in 1995, special seats for women were created in parliament, increasing the percentage of women lawmakers to about 25 percent.The same system specifies 30 percent representation of women in the public service.

The Nairobi gender forum was attended by representatives from all the registered 43 political parties in the country and civil societies. It was organized by Heinrich Boll Foundation East and Horn of Africa.

World Cup and Fears of Human Trafficking in South Africa

SOUTH AFRICA: Ready to Tackle Human Trafficking

JOHANNESBURG, March 26, 2010 ( CISA) -The expected arrival of 350,000 football fans in South Africa for the World Cup in June has provoked fears of increased levels of human trafficking.

A new study suggests that one major obstacle to preventing this is the lack of accurate information about the extent of the problem, according to IPS.

South Africa is believed to be a hotspot for human trafficking in Africa and the country’s National Prosecuting Authority commissioned the Human Sciences Research Council (HSRC) to conduct a study of the problem as part of its programme to combat trafficking, known as Tsireladzani.

Professor Carol Allais, who led the HSRC team, told IPS that the team’s work was made difficult by the lack of data on human trafficking as well as a lack of cooperation by government departments with the research team.

A similar study published in 2007 by the U.N. Educational, Scientific and Cultural Organisation (UNESCO) also found reliable data on human trafficking in SA was sketchy because there were no official statistics.

Police records contain data on human trafficking on a range of crimes, including abduction, kidnapping, rape, and assault.

NGOs have raised fears of escalated trafficking during the FIFA World Cup in June.

The lack of data on human trafficking meant that the researchers could not estimate the number of victims of trafficking, though they still attempted to highlight the major characteristics of the phenomenon.

The study, which also included Lesotho, Swaziland and Zimbabwe contained few surprises: it said that victims of trafficking were mostly women, girls and boys who were trafficked for a variety of purposes, including prostitution, pornography, as domestic servants, forced labour, and for criminal activity.

The quality of the data from NGOs was questionable because some of these organisations inflated their numbers as part of their fundraising strategies, Professor Allais said.

The research team recommends that South Africa embark on a major awareness and educational campaign, which will include training of people in the justice system to improve their understanding of human trafficking.

Other recommendations include improved patrolling of the borders; better training for labour inspectors; improved intelligence gathering and changed visa policy for at-risk groups.

South Africa’s public broadcaster, Malebo Kotu-Rammopo, the co-ordinator of the Sexual Offences and Community Affairs unit of the NPA said that a database of human trafficking cases will only be set up after the passing of the Prevention and Combating of Trafficking in Persons legislation, which was submitted to parliament last week.

Kotu-Rammopo said the report will assist government sharpen its policy on human trafficking, including the design of specific mechanisms to help protect those that are most vulnerable to trafficking.

Women’s Role In Reconciling and Leadership of Kenya

KENYA: Women urged to participate actively in State Affairs

MERU, March 23, 2010 (CISA)

Kenyan women have been challenged to play a more active role in the management of the country’s affairs instead of being relegated to the periphery.

Speaking in Meru town, Eastern Kenya while attending the annual Catholic women thanksgiving prayers, the wife of Vice President Pauline Kalonzo said women had the capacity and numbers to make landmark contributions that could chart the destiny of the country and their potential should be recognized instead of being brushed aside.

She regretted that for a long time, women have been sidelined from decision making processes in spite of having the requisite ability and acumen.

The vice president’s wife said women were the pillars of the family and the society and should be accorded their rightful recognition.

Kalonzo told women to use their resoluteness and their immense voting powers to bring about the necessary reforms that would assure Kenyans of stability and development.

“You choose the kings of this country and through your prayers and numerical voting strength, you can be able to shape the future of this country,” she said.

She told hundreds of women attending the prayer meeting conducted by the Meru Catholic Bishop Salesius Mugambi that the country’s destiny rested in their hands and through prayers and their unshakeable resolve.

She said through the power of women’s prayer, the country will surmount the existing challenges and achieve national cohesion and lead to the enactment of a new constitution that will have broad support.

She urged women to pray for the country’s leadership, especially, during the current trying period when the nation is going through reforms some of which have the potential to cause hatred and divisions among Kenyans.

2010/2020 Declared African Women Decade by AU

AFRICA: Protocol holds the Key to Women’s Progress

UNITED NATIONS, March 19 ( CISA)

The African Union’s (AU) declaration that 2010/2020 is the African Women’s decade will mean little if governments fail to ratify and implement the Protocol to the African Charter on Human and People’s Rights on the Rights of Women.

Delegates at the Beijing +15 meeting in New York say implementation of the protocol, popularly known as the African women’s protocol, holds the key to advancing the rights of women on the continent.

So far, only 27 countries, half of the continent’s nations, have ratified the instrument, regarded as progressive in safeguarding women’s rights.

The protocol, which came into force in 2005, requires state parties to eliminate sexual violence, discrimination and other harmful practices against women, and ensure gender equality and reproductive health rights, as well as the right to inherit property.

While some countries have ratified the protocol, lack of implementation has seen continued human rights violations against women, according to IPS.

“The rights to cultivate and transfer customary land in Malawi are still granted by traditional chiefs who do not allow women to own land,” says Luciana Kuboma, a smallholder farmer in the southern African country.

“Women are in the process left poor and cannot even access credit at microfinance institutions because they have nothing to present as collateral,” she adds.

In most parts of Africa, women lose land or matrimonial property to in-laws upon the death of their husbands. Many become destitute because they are unable to use the land to feed their children.

Addressing such traditional practices calls not only for implementing the protocol, but urgent budgets to support the implementation.

“We must now move from rhetoric to action. Our governments must put money into awareness-creation programmes, and building partnerships with religious and cultural institutions so as to change their attitudes towards such practices,” says Elizabeth Musoke of Maarifa Community Women’s Group, based in Nairobi, Kenya.

Training is also crucial for police and magistrates who handle rape and other sexual violence cases. According to Tina Musuya, executive director of the Centre for Domestic Violence Prevention in Uganda, negative attitudes and blame towards survivors of sexual violence discourage them from reporting crimes.

“We have unsupportive law enforcement officers who mock rape, blaming women for having been scantily dressed at the time the rape occurred. Also, magistrates reduce jail sentences on rape on the pretext that if the head of the house is in jail, the family will have no provider,” she notes.

The situation is similar in neighbouring Kenya, where despite the Sexual Offences Act stipulating a minimum sentence of 10 years imprisonment and a maximum of life imprisonment, offenders are sometimes released after a few months, making the law far less effective as a deterrent.

Need for Organized Social Enterprises in East Africa

European countries are recognizing that social enterprises are important players of the economy. Hence there are various initiatives by governments to recognize their role in reducing social exclusion.  Laws on social  enterprises under different names have been passed by eleven countries as follow: Italy-law 155/2006, Finland-Act 1351/2003, Lithuania-Law 1/6/2004, Belgium-Company Code Reform 13/4/1995, UK-Community Interest Company Act 2004/2006, France-Law 624/2001, Spain-Law 27/1999, Portugal-Social Solidarity Cooperative Law 22/12/1998, Poland-Social Cooperative Law 27/04/2006, Greece-Law 2716/1999 and Latvia-Social Enterprise Law. East African countries too need to take cognisanze of this new approach to deal with the poverty problem.
The main activities of the social enterprises in Europe are either to provide social services or to initiate work integration activities. European social enterprises are definable on the following nine criteria: a) continuous production/selling of goods and services b) high degree of autonomy c) a significant level of economic risk d) a minimum amount of paid work e) explicit aim to the benefit of the community f) an initiative launched by a group of citizens g) decision power not based on capital ownership h) participatory nature and i) limited profit distribution . This definition popularly known as the EMES definition of 2001 is widely accepted in Europe.
Hence in  this particular post hopes to initiate dialogue, discussions, criticisms, opinions, comments and debates amongst practitioners, researchers and other stakeholders on the following areas in East Africa:
1. The non profit sector/organizations, the social economy, solidarity economy and the third sector
2. Social entrepreneurship, social enterprise and the social entrepreneur
3. The roles of the aforementioned (in 1 and 2) in economic and local development both in the developing and the developed countries
4. Comments on scientific work or working papers, interesting experiences
5. Events, conferences,  on social entrepreneurship within the region

Our aim is hence to contribute to the betterment of both research and practice in recognition that social enterprises are first and foremost about people. On one hand social enterprises help in reducing human suffering caused by exclusion and on the other they do uniquely contribute to economic development.

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