The Dynamics of Poverty Graduation and Resilience in Northern Kenya October 2018 COURTENAY CABOT VENTON cabotventon@hotmail.co.uk CATHERINE FITZGIBBON cfitzgibbonwork@gmail.com

Objective To understand the dynamics and feasibility of graduation, using data from Household Economy Analysis (HEA), in northern Kenya To specifically evaluate the feasibility and likelihood of graduation for different livelihood zones and wealth groups encompassing 3 million people in Turkana, Garissa, Wajir and Mandera Counties.

USAID Analysis on the Economics of Resilience Resilience building would save upwards of $1.3 billion over a 15 year period, or $84 million per year. Benefit to Cost Ratio $2.8:1

HEA Livelihood Zones Turkana Turkana Border Pastoral; Turkana Central Pastoral Kerio Riverine Agropastoral; Turkwel Riverine Agropastoral Lodwar Urban Zone Garissa Riverine Agropastoral Former Pastoralists Mandera North East Agropastoral North East Pastoral Wajir Southern Grassland Pastoral

Modelling ’Graduation’

Three Scenarios We evaluated three scenarios: Counterfactual – no response Safety Net Transfer (“stabilization”) – SN transfer of $300 per hh is provided every year, to every very poor and poor household. Investment Scenario (“growth”) - $450 investment fund transferred to each household in year 1, assumed to yield 30% ROI per year, with a SN for 2 years Explain rationale for 30% return

Bay Bakol Agropastoral High Potential (BAPHP – Poor HHs) HEA Model Bay Bakol Agropastoral High Potential (BAPHP – Poor HHs)

Impact on Deficits The range is from 0 to 15 across all scenarios

Size of Investment Pot Required

Pastoral Livelihood Zones Poorer pastoral wealth groups = least resilient Better off groups have livestock holdings 10-50 times larger than the very poor. Very poor pastoralists in Turkana Pastoral have deficits for less years than the poor – less dependent on drought affected livestock and greater mix of “other” Potential for growth of investments is low as livestock income rainfall dependent - so variable

Agro-Pastoral Livelihood Zones Mixed results, with Turkana AP doing much better than North-East AP or Garissa Riverine High levels of investment in irrigation in the Turkana agro-pastoral zones have resulted in relatively reliable yields, as compared with primarily rain-fed agriculture in the other regions.

Difference in Agro-pastoral LZs Kerio Riverine, Poor, $0 Investment

Difference in Agro-pastoral LZs Garissa Riverine, Poor, $3,000 Investment

Urban Livelihood Zones Most resilient Almost no income is reliant on rainfed agriculture but earned year by year. Highlights the importance of small towns in generating productive trade and livelihood opportunities. Far greater range of “other” income sources available in towns

Key Characteristics of Resilience USAID 2018, Resilience Evidence Forum Report Livelihoods-based Agency-based Financial inclusion Diversification of livelihood risk Sustainability of natural resources Access to markets Social capital Aspirations, Self-efficacy, and confidence to adapt Women’s empowerment and gender equality

Resilience and Income All Very Poor and Poor Groups Some Very Poor and Poor Groups Middle and Better Off Groups Charcoal production and sale Collection and sale of firewood Collection and sale of construction materials Collection and sale of gums and resins Herding livestock Water pan digging Weaving mats and roof thatch Selling water Handicrafts Construction work Domestic labour Labour migration Petty or wholesale trading Kiosk or shop Property/ land rental Skilled construction Formal job - Govt or NGO Restaurant / café / guesthouse Need to differentiate between; Irregular, low income, low return ‘other’ Regular, higher income, better return ‘other’

Value of Markets and Infrastructure

The Catch-22 of Graduation LZ code LZ name Number of Years with Deficit with a Safety Net Size of Investment Fund Required Likelihood of Achieving Growth from Existing Income sources VP P TBP Turkana Border Pastoral LZ 4 7 $1100 $1600 Low TCP Turkana Central Pastoral LZ 13 1 $1800 $600 KAP Kerio Riverine Agropastoral LZ $400 $0 Medium TAP Turkwel Riverine Agropastoral LZ LUZ Lodwar Urban Livelihood Zone High NEA-Man7 North-East Agropastoral LZ - Mandera County 15 $2500 NEA-Waj7 North-East Agropastoral LZ - Wajir County 11 2 $200 NEP-Man9 North-East Pastoral LZ - Mandera 3 $700 NEP-Waj9 North-East Pastoral LZ - Wajir WSG-Waj10 Wajir Southern Grassland Pastoral LZ - Wajir County $2600 $2400 GRV-Gar10 Garissa Riverine LZ - Garissa 12 $3200 $3000 GFP-Gar10 Garissa Former Pastoralists - Garissa County peri urban $500

Conclusions Household deficits are highly differentiated across livelihood zones and wealth groups, and also from year to year. ’Graduation’ is not binary or linear – households flow in and out of poverty graduation, and resilience plays a fundamental role in ensuring that households can cope with changes without external assistance. Safety nets are fundamental to supporting household consumption needs, and are preventing far greater impacts of disaster. BUT, they are insufficient for graduation

Recommendations Consider how HEA tools can be used to better understand differences in resilience and potential for graduation when expanding and scaling government safety net programmes; Pilot a two-year time limit for safety net assistance plus a resilience intervention for appropriate households

Recommendations Cont. Household level resilience programmes must consider the following; The potential for increasing the productivity and income from household’s existing economic activities; The potential to generate sustainable incomes from alternative economic activities; and The wider operating environment and the presence of other sources of resilience, including infrastructure/markets, skills and training, and support systems and mechanisms that build social capital and agency – that effect the sustainability of any economic activity.