Thursday March 10 2016

Government should have the courage to close down the Uwezo and Youth funds

By KWAME OWINO
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It’s difficult to remain unimpressed after tracking the amount of money the government has dedicated to create employment for Kenya’s youth.

Apart from creating a variety of funds, there are organisations with staff, leaders and boards of directors, all paid for with public funds.

Yet all this has made no discernible difference to the original policy problem of expanding employment opportunities.

Revelations about blatant corruption and dysfunction in both the Youth Enterprise Fund and the National Youth Service (NYS) point to the fact that the funds’ beneficiaries have been procurement committees, fast-talking consultants with an opinion on all legal and policy issues and the bureaucrats who run these funds.

It is clear that the law permitting, even if the President closed these funds down today, Kenya’s unemployed would be none the worse for it. Still, it is helpful to explore why these popular programmes have failed, and failed so spectacularly.  

First, this administration is supremely obsessed with throwing public money at problems. Think huge infrastructure projects, youth funds, the NYS, expensive machines in hospitals, the school digitisation project (laptops or tablets) and the quest to establish irrigation projects in the Tana River area.

CREATED FROM FAITH

All this when the energy required to pump the water is unavailable, schools need more basic things like desks and where a major cause of illnesses and death in Kenya is the lack of clean water and poor sanitation.

This is the problem of using cash as a policy signal that government cares. It leads to poorly considered projects that may be popular but lead to expensive policy mistakes, but hey, we are creating jobs for the youth!

This pursuit of large spending and symbolic investments is not only popular but also raises the profiles of the state department that manages these projects that command large budgets.

Consider the high profile of the department for Devolution, Youth and Planning. While it is clear now that using glib experts to redesign a jobs programme was not a good idea, that state department bore clout for being in charge of billions of shillings.

This was a signal that these issues were a high priority for this administration. As we now can tell, perhaps personal ambition and the quest to control budgets and direct procurement was also a motivating factor.

Public servants are able to use popular programmes to attain personal economic interests at public expense.

Government should indeed be concerned that a large number of Kenyans are unemployed. However, acknowledging this does not mean government should establish a loan system outside of formal financial services.

A review of both the Youth Enterprise Development Fund and the Uwezo Fund shows they were created more out of faith, not evidence. Had some evidence of rigorous evaluations been made available, it is clear that these funds would have, at best, be differently run but more probably not been created at all.

SCHOOL COMPLETION FIRST

Evidence from a series of rigorous studies carried out under theInnovations for Poverty Action shows that while youth in need of jobs appreciate training and investment funds, the effects are modest in terms of employment income or growth of income.

This suggests that the programmes do help about 20 per cent of the cohort who gain from training and grants but that the effects do not persist.

An evaluation of the Kenya Youth Empowerment Programme (KYEP) run by the government, the private sector and the World Bank is instructive.

The research showed that youth with post-secondary school education had better employment outcomes from the six-year project, and that this intervention worked only in the formal sector and not within the informal sector where the Uwezo and Youth Enterprise Development Funds (YEDF) are largely targeted.

On this evidence, better policy would prioritise completion of high school education to begin with because giving a half-literate person money with which to establish an enterprise is senseless.

The simple employment plan must start with the basic policy of ensuring transition to secondary school for all pupils.

The evaluation cited above also shows that the extreme confidence in the informal sector is a policy plan that will condemn youth to unstable employment and low incomes.

So, to use good policy thinking, government should have the courage to close down the Uwezo and Youth funds and divert those funds to secondary school training in order to shrink school dropout rates.

This closure would be doubly beneficial to Kenyans because it would cut out a wide avenue for corruption while raising school completion on the other hand.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi. Twitter: @IEAKwame

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