Funds set up to help youth and women are a barrier to progress

Embattled Youth Enterprise Development Fund Chief Executive Officer Catherine Namuye. Ms Namuye in collusion with a senior board member and other senior managers are said to be deeply involved in the scheme that has seen the Fund lose Sh180.9 million in two months between February and April. FILE PHOTO | PHOEBE OKALL | NATION MEDIA GROUP

What you need to know:

  • Theatrics of public parliamentary hearings aside, Ms Namuye is not telling us anything new.
  • There is nothing new about boards of directors peddling influence to steal public money and executive officers being cast under the bus when things go awry.
  • Women Enterprise Fund did not see any substantial evidence of its transformative impact.
  • A disproportionately large amount of resources go to fund mundane operational stuff.

Kenyans watched in bewilderment as Ms Catherine Namuye, the embattled, Youth Enterprise Fund chief executive, tried to explain the Sh180 million scandal that happened under her watch.

Theatrics of public parliamentary hearings aside, Ms Namuye is not telling us anything new.

We know that the levels of corruption and influence-peddling in government institutions are appalling. We also know that corporate governance in statutory institutions has gone to the dogs as rent-seeking becomes the order of the day.

There is nothing new about boards of directors peddling influence to steal public money and executive officers being cast under the bus when things go awry. We also know that public procurement systems are amenable to the rich with friends in high places.

The latest scandal in the Youth Fund threatens to distract us from having a vital debate — whether throwing away money, veiled as enterprise support, is a prudent way of investing taxpayers’ money.

A while back, I attended a youth forum in Kapsabet, where Ms Namuye was speaking. Whereas she did not waste the opportunity to lay down the statistics of the number of beneficiaries and the loans disbursed, she did not cite any cases of the transformative impact of these loans on the beneficiaries. No rags-to-riches story because of the fund’s benevolence.

No wonder every youth enterprise exhibition is based on the same old stories of rabbit and chicken farming and bead and stitchwork stories. Is this all that we have to show for all the money that has been poured to support enterprise?

I have also interacted with the Youth Fund’s sister, the Women Enterprise Fund, and did not see any substantial evidence of its transformative impact. At exhibitions, we see the same old bead work, cakes, chicken, liquid soaps, and such other products. There is no evidence of anything that I would refer to as overtly entrepreneurial.

BRINGING WOMEN TOGETHER

There is a fundamental problem at both the Youth and Women enterprise funds. Although, bringing women together might generate substantial social capital, advancing taxpayer funded loans to youth or women in groups might be imprudent.

There are hardly any incentives capable of unlocking the beneficiaries’ entrepreneurial ingenuity. This model simply coerces people who would not have ordinarily worked together to cooperate. Call it ujamaa if you must. Youth and women are not coerced to work on fields of millet together; rather they are forced to share a State loan. Besides, women and youth have historically formed self-help groups to improve their financial lot way before the Women’s Fund came into existence.

The question Kenyan taxpayers should be asking is what the loan repayments rates are and the risk profiles of the ventures funded.

We must acknowledge that both the Women and Youth funds simply do not have the capacity to profile the risks or return on investment of the ventures they fund. But perhaps the elephant in the room is what share of funds go to meet the organisations’ operational expenses rather than the funds’ core mandate.

Even from a superficial examination, it is clear that a disproportionately large amount of resources go to fund mundane operational stuff. How can one explain the Youth Fund’s spending of Sh180 million on an ICT policy consultancy?

When President Uhuru Kenyatta assumed office in 2013, he quickly allocated the Sh6 billion earmarked for the presidential election run-off to the Uwezo Fund, the Youth Enterprise Fund, and the Women’s Fund. Therein lies the problem.

There is no evidence that any planning and impact projections had been made prior to the setting up of these institutions. That is not how a resource-poor country like Kenya spends Sh6 billion of hard earned taxpayer resources.

I believe that entities such as the Youth and Women funds should not be statutory agencies.

Mr Njeru is programmes director, Eastern Africa Policy Centre. [email protected]