Policy paper

UK–Kenya development partnership summary, July 2023

Published 17 July 2023

Introduction

The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. IDS priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature, and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the Sustainable Development Goals (SDGs). This Country Development Partnership Summary details how the IDS and IR23 will be put into practice with Kenya.

Country context

Kenya’s development is critical for regional stability, the achievement of global climate ambitions and the achievement of the Sustainable Development Goals. Kenya is a beacon of democracy and stability in the East Africa region, with credible, peaceful elections in 2022, and an important player in regional and global governance: host to the United Nation’s 4th largest headquarters, member of the Commonwealth, African Union, Intergovernmental Authority on Development (IGAD), East African Community (EAC) and Organisation of African, Caribbean and Pacific States (OACPS).

Kenya’s security situation has improved since terrorist attacks against the US Embassy (1998), Westgate (2013), Garissa University College (2015) and most recently at Dusit2 (2019). Through UK-Kenya collaboration, the risk of terrorism impacting UK interests has been reduced. The threat from Al Shabaab and increasingly from Daesh affiliates in the wider region remains however, affecting the investment and tourism sectors as well as the lives of people living in northern Kenya. Despite this, Kenya has played an important role in regional security including in Ethiopia, South Sudan, Sudan, DRC, and Somalia.

Kenya is demonstrating its global leadership on climate change, as one of the first countries to ban single use plastic bags and targets on net zero by 2050, 100% renewable energy by 2030 and universal clean cooking by 2028.^{[footnote 1]} In September 2023, Kenya and the Africa Union will co-host a Climate Action Summit to prepare for COP28, in Nairobi. Kenya’s President William S Ruto has committed to reforestation, with aims of planting 15 billion trees by 2032 and restoring 5.1 million hectares of deforested and degraded landscapes. The UK is a key ally on climate issues and played a critical role in securing commitments and nationally determined contributions in the run up to COP26 and COP27. Climate change poses a real risk, despite Kenya only contributing 0.05% of global emissions,^{[footnote 2]} it is rated the 39th most vulnerable country.^{[footnote 3]}

Kenya’s progress against the SDGs has been significant in recent years, with slow but steady progress in reducing poverty, with poverty rates at 42% in April 2021 (following a COVID-related spike and the worst drought in 40 years)^{[footnote 4]} and GDP per capita rising from $442 in 2003 to US$2,081 in 2021.^{[footnote 5]} Under-5 mortality has fallen from 115 deaths per 1,000 live births in 2003 to 41 deaths in 2022.^{[footnote 6]} 347 women died per 100,000 live births in 2017, down from 678 in 2003.^{[footnote 7]} 77% of children complete primary school, up from 68% in 2010.^{[footnote 8]} However, only 50% of children complete upper secondary, and there are low learning levels for children in primary.^{[footnote 9]} Of Kenya’s 53 million population, 75% are under 35 years old^{[footnote 10]} and roughly 1 million Kenyans enter the jobs market every year.^{[footnote 11]} Agriculture remains the main source of employment (33%, mostly subsistence farming)^{[footnote 12]} and export earnings (65%, mostly from commercial farming)^{[footnote 13]} but suffers from declining productivity and output and increasing climate vulnerability.

Multiple constraints to Kenya’s development remain as well as the security and climate threats, the main challenges are inequality, corruption, and economic management.

There are high and rising levels of inequality in income and in human development indicators, with progress much slower in rural and arid and semi-arid lands (ASAL) counties, primarily in Northern Kenya. Historically marginalised, these counties have the highest fertility rates, lowest education outcomes and worst indicators for access and quality of healthcare, factors exacerbated by COVID and the drought.^{[footnote 14]} Poverty and deprivation in Kenya are affected by multiple and overlapping factors, including gender, age and where someone lives. Less than 0.1% of the population (8,300 people) own more wealth than the bottom 99.9% (more than 44 million people),^{[footnote 15]} and adult women are more likely to be multi-dimensionally poor than men. 1 out of 3 adult women (34%) reported having experienced physical violence and there is widespread sexual violence, as well as rising teen pregnancies, high gender-based violence (GBV) prevalence and Female Genital Mutilation (FGM) cultural practices in parts of the country. Drought in the region has increased the influx of refugees, with official estimates at half a million, but likely to be higher,^{[footnote 16]} but a new refugee law passed late in 2021 has the potential to change the way Kenya and donors respond to refugees for the better.

Endemic corruption, debt and macroeconomic management, weak financial controls on illicit finance and lack of capacity remain significant constraints to public investment and service delivery in Kenya. Kenya’s macroeconomic position has worsened, with a fiscal deficit 5.8% of GDP in 2021 to 2022^{[footnote 17]}, limited improvements in revenue generation and growing debt (68% of GDP as at March 2022^{[footnote 18]}). Fiscal consolidation in the form of tax rises and cuts to consumption subsidies will increase cost-of-living pressures. However, these measures aim to create the fiscal space to allow greater public investment – total investment (public and private) has remained lower than 15% of GDP over the last 3 years^{[footnote 19]} and investments in infrastructure have been dominated by China for a decade, although that is slowly changing. Kenya’s exports remain mostly in traditional sectors such as coffee, tea and cut flowers, and have largely stagnated since 2012 as the currency has appreciated in real terms. A combination of high energy costs and an over-valued currency have held back Kenyan industrialisation – manufacturing is a small and declining share of GDP (7%).^{[footnote 20]}

Kenya’s Fourth Medium Term Plan 2023 to 2027, not yet published, is expected to set out President Ruto’s vision for “bottom up” economic transformation. Kenya is considered one of Africa’s leading science, tech, and innovation hubs and financial centres. The challenge is to translate notable successes such as internationally acclaimed (and UK-supported) mobile payment system MPESA more widely into growth and poverty reduction. There is a growing skills shortage and digital access is far from universal, but a young and dynamic population is driving innovation and use of tech to address challenges from climate change to food insecurity.

Why and how: the UK’s development offer with Kenya

In 2020, President Kenyatta and Prime Minister Johnson signed a Strategic Partnership, to focus our collective expertise, resources, and leadership on the priorities – bilateral, regional, and global – that will help deliver more prosperous, secure and sustainable societies. The Strategic Partnership outlines 5 key pillars: mutual prosperity, security and stability, sustainable development, climate change, and people to people.

The UK and Kenya enjoy a long and deep relationship which has contributed significantly to Kenya’s rapid growth and development in recent years. The UK is amongst Kenya’s top ten bilateral development partners, providing £72 million of bilateral Official Development Assistance (ODA) and £91 million to multilateral spend in Kenya in 2021 (though this reduced in 2022) across all pillars of the strategic partnership. The UK was Kenya’s 5th largest export destination in 2022 and the UK is the largest international investor in Kenya accounting for 14% of Kenya’s total stock of foreign liabilities. The UK has around 230 military personnel based permanently in Kenya, providing training to Kenyan and UK forces. The UK government is building on these successes and has prioritised efforts to address Kenya’s constraints to development through the following engagement in 2023 to 2025.

Climate change

Building on COP 26 and 27 commitments, promote resilience, support reforestation and natural habitats, support attainment of 100% clean energy by 2030 and increase access to climate finance.

• SDG goal 13 and 7: climate action, affordable & clean energy
• IDS: climate change & nature
• Africa strategy: 3. Greener, cleaner planet

Human and social development

Mitigate the impact of Kenya’s worst drought in 40 years, support reforms towards long-term food security, deliver on UK ambitions to end preventable deaths and reduce inequality in education and health service provision, particularly in the North and ASAL counties.

• SDG goals 1-5 and 10: poverty, hunger, health, education, gender equality, inequality
• IDS: women and girls, humanitarian
• Africa strategy: 5. Empowering Women and Girls, Effective Humanitarian Response

Trade and investment

Progress the £3.4 billion package of green investment deals agreed between the Prime Minister Sunak and President Ruto at COP27, positioning the UK as a key partner – and alternative to China – on investment in the run up to the UK-Africa Investment Summit.

Support Kenya’s efforts to create 1 million new jobs annually, with an emphasis on low-carbon growth and climate-resilient jobs.

• SDG Goal 8: Decent work and economic growth
• IDS: British Investment Partnerships
• Africa strategy: 2. Economic Partnerships

People to People

Build on new or existing partnerships and deliver agile and catalytic projects to address critical barriers in the research, technology, and innovation ecosystem, and innovate to overcome challenges around jobs, climate, education, and inclusion. Supported by British Council work in higher education, arts and culture.

• IDS: British expertise
• Africa strategy: Science, tech and data

Governance

Counter malign influence from third-party states, counter terrorism, safeguard the democratic evolution of Kenya’s institutions and strengthen capacity in national and sub-county governments.

• SDG goal 16: Peace, justice, and strong institutions
• IDS: work globally/Africa partnerships
• Africa strategy: 1. Freedom and Democracy

Security

Partner with Kenya on regional security, peace, and stability, to reduce risk to UK interests and support Kenya’s role as an anchor state. Countering hostile state threats emanating and strengthening democracy to protect our mutual security. The formal opening of the Kenya-Somalia border offers potential for improving economic, social and security in the north-east ASALs

• IDS: patient partnerships
• SDG goal 16: Peace, justice, and strong institutions
• IDS: work globally/ Africa partnerships
• Africa strategy: 4. Defence and Security Partnerships

Addressing the specific needs of women and girls are woven throughout our approach to development in Kenya: all new ODA programming and policy influencing will be assessed on gender and inclusion to ensure we maximise our impact across all aspects of the UK-Kenya partnership. We also have targeted programmes working on Gender Based Violence (GBV) and maternal and reproductive health. In addition to climate-specific programming, we are mainstreaming climate change resilience and adaptation, ensuring it is centred in our programming and diplomacy activities and outcomes. We will maximise the use of innovative, data and digital driven approaches to improve efficiency and inclusion across all our work.

We work with Kenya as a strategic partner with mutual interests, ensuring alignment and ownership, and being intentional about the use of influence and development diplomacy. This includes using our position to convene partners and leverage investment to achieve shared goals.

Who we work with

Our key partners for delivering these development outcomes in Kenya include the Government of Kenya (both at the national and county level), international non-governmental organisations (NGOs), UN agencies, International Financial Institutions (including the International Monetary Fund and the World Bank), global funds and the private sector. In the next phase of the UK’s development engagement in Kenya, we will increase our engagement with and delivery through local organisations and civil society. The UK is at the forefront of development effectiveness cooperation working with the US, the EU, and other like-minded partners through various coordination mechanisms.

For the delivery of our bilateral ODA portfolio, we vary our engagement and partners depending on expertise and ability to deliver. For example, in our refugee/host community programme, United Nations Refugee Agency (UNHCR) and World Food Programme (WFP) work with 15 downstream partners to deliver humanitarian assistance while International Finance Corporation (IFC) incentivise private sector solutions through a multi-donor trust fund. Whereas our approach to addressing constraints to economic growth, requires us to engage with a wide range of institutions such as TradeMark Africa and Financial Sector Deepening and with multiple instruments including British Investment International (BII) and Private Infrastructure Development Group (PIDG).

Key programmes

We have 13 active bilateral ODA programmes operating in Kenya covering the breadth of the strategic partnership including social protection, humanitarian response, women and girls, infrastructure, job creation, devolution, and anti-corruption. These are complemented by centrally managed, multi-country programmes in climate and environment, finance, investment, infrastructure, agriculture, science and innovation, research, and digital access. We are currently designing new programmes to address inequalities in education and health, support women and girls and address food security.

We work at county and national government level, to improve systems, allocation of funds and support capacity building. Recognising the shift in development approaches and the mutually beneficial relationship with the Kenyan government, programmes have moved towards technical assistance rather than direct service delivery and are about embedding government ownership and sustainability into the design. For example, under our Delivering Sustainable and Equitable Family Planning (DESIP) programme, a Memorandum of Understanding for Family Planning Commodities Sustainable Financing was signed with the Government of Kenya Ministry of Health in 2019, in which the Government of Kenya committed to gradually increase its share of the budget contributions.

Our top 3 spending programmes are:

The Hunger Safety Net Programme Phase 3 (HSNP)(2018 to 2024, £74 million)

HSNP supports Kenya’s social protection and has provided unconditional cash transfers to 133,800 poor and drought-affected households with capacity to scale to 679,200 registered households in the 8 counties. It has increased the sustainability and predictability of cash transfers, increased the coverage and supported emergency scale-ups. This includes a rigorous impact evaluation of Economic Inclusion Programme pilots.

Sustainable Urban Economic Development (SUED) (2016 to 2024, £70 million)

SUED supports the Government of Kenya on sustainable economic development and urbanisation. In addition to Nairobi Railway City project and other national level support, SUED has delivered Urban Economic Plans that drive business environment reforms for twelve counties and help them successfully mobilise private investment. £24 million of deals that will support private-sector led economic growth and create over 20,000 jobs have been closed to date – the target is to mobilise over £60 million in investment deals for critical climate-resilient infrastructure and value chain projects and create over 33,000 jobs in Kenya’s regions over the life of the programme.

The Kenya Integrated Refugee and Host Community programme (PAMOJA) (2018 to 2023, £51.6 million)

PAMOJA supports refugees and host communities in Kenya through cost-effective humanitarian assistance, promoting social economic integration between refugees and host communities, supporting private sector investments, and supporting policy engagement.

One in-country bilateral programme has closed in the last 6 months: the Maternal and Newborn Health programme (£64.6 million) which aimed to reduce mortality through increased access to and utilisation of quality maternal and new-born health services. Key achievements include:

• significant improvements in county and national efforts to address the challenges on mentorship and training
• Facility Improvement Fund Bills in pilot counties, which provide a legal framework for fund administration at the health facilities
• funding of 19 projects to test innovative solutions on maternal health challenges

With several new programmes coming online over the next 1 to 2 years, we will assess evidence during business case development and incorporate proportionate evaluations as appropriate. In addition, we are exploring funding options outside of programme budgets to conduct portfolio evaluations across programmes in key thematic areas (job creation, election support). We have developed a light-touch monitoring tracker to help assess progress against country plan milestones, including cross-cutting priorities of women and girls, climate change and innovation and tech.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the Foreign, Commonwealth & Development Office’s (FCDO’s) Spending Review 2021 settlement.

The department’s spending plans for the period 2022-2023 to 2024-2025 have been revisited to ensure the UK government continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The government provided additional resources of £1 billion in 22-23 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023-2024 and 2024-2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

It should be noted that these figures do not reflect the full range of UK ODA spending in these individual countries as they do not include spend delivered via core contributions to multilateral organisations, or regional programmes delivered by the FCDO’s central departments. Other UK Government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their Annual Report and Accounts and the Statistics for International Development.

Kenya has a bilateral allocation of £24.6 million for financial year 2023 to 2024 and an indicative allocation of £81 million for financial year 2024 to 2025. 93% is marked as being principally or significantly focused on promoting gender equality and 56% is marked as being principally or significantly focused on disability inclusion.

Figure 1. 2023 to 2024: £24.6 million bilateral ODA: humanitarian, 36%; British Investment Partnership, 33%; women and girls, 13%; governance and institutions, 9%; building security and reducing conflict, 9%.

FCDO Official Development Assistance allocation

Allocated ODA budget financial year 2023 to 2024	Indicative ODA budget financial year 2024 to 2025
£24.6 million	£81 million

Supporting information sources

• High Commission Nairobi
• Kenya Devtracker page
• statistical references – see footnotes

1. Kenya First NDC (PDF, 9.52MB), ↩

2. Our World in Data, Kenya country profile, Annual share of global CO2 emissions ↩

3. ND-GAIN Country Index. Overall ranking 149. Kenya is the 39th most vulnerable country and the 154th most ready country ↩

4. World Bank, Kenya Economic Update, December 2021 (PDF, 5.25MB) ↩

5. World Bank, Kenya Economic Update, December 2021 (PDF, 5.25MB) ↩

6. Demographic and Health Survey Kenya, 2022 (PDF, 4.44MB) ↩

7. World Bank Data, Maternal mortality ratio ↩

8. UNESCO institute for statistics, SDG 4 March 2023 release, Kenya Country Profile, http://sdg4-data.uis.unesco.org/ ↩

9. Ibid ↩

10. Kenya Population and Housing Census, KNBS 2019 https://www.knbs.or.ke/?wpdmpro=2019-kenya-population-and-housing-census-volume-iii-distribution-of-population-by-age-sex-and-administrative-units ↩

11. World Bank, Economic Update Kenya, June 2021 (PDF, 4.11MB) ↩

12. World Bank Data, Kenya, Employment in Agriculture (% of total population), https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS?locations=KE ↩

13. UN FAO, Kenya at a Glance, https://www.fao.org/kenya/fao-in-kenya/kenya-at-a-glance/en/ ↩

14. UNHCR Drought Situation Response Update #9 – April 2023 ↩

15. Oxfam, Taxing for a More Equal Kenya: A five-point action plan to tackle inequality Taxing for a More Equal Kenya: A five-point action plan to tackle inequality - Oxfam Policy & Practice ↩

16. Demographic and Health Survey Kenya, 2022 (PDF, 4.44MB) ↩

17. IMF Country Reports 22/382: Kenya, December 2022 null-002.2022.issue-382-en.pdf ↩

18. Kenya Economic Update: June 2022 (PDF, 2.57MB) ↩

19. World Bank, Economic Update Kenya, December 2021 (PDF, 5.25MB) ↩

20. World Bank Data, Kenya: Manufacturing Value Added (% of GDP) https://data.worldbank.org/indicator/NV.IND.MANF.ZS?locations=KE ↩