Aquaculture Business Development Programme

209 Pages·2017·2.89 MB·English

by  Ariano, Lucy

Republic of Kenya

Aquaculture Business Development Programme
Final Design ReportFinal Design ReportFinal Design
Report

Main report and appendices

Document Date: 29-Aug 2017
Project No: 2000001132
Report No: 4449-KE
East and Southern Africa Division
Programme Management Department

Republic of Kenya
Aquaculture Business Development Programme
Final Design Report
Main Report

Contents
Currency equivalents iii
Weights and measures iii
Abbreviations and acronyms iii
Map of the Programme area vii
Executive Summary viii
Logical Framework xiii
I. Strategic context and rationale 1
A. Country and rural development context 1
B. Rationale and theory of change 4
II. Programme description 6
A. Programme area and target group 6
B. Development objective and impact indicators 10
C. Outcomes/components 11
D. Lessons learned and adherence to IFAD policies and the SECAP 24
III. Programme implementation 25
A. Approach 25
B. Organizational framework 25
C. Planning, M&E, learning and knowledge management 28
D. Financial management, procurement and governance 30
E. Supervision 32
F. Risk identification and mitigation 33
IV. Programme costs, financing, benefits and sustainability 36
A. Programme costs 36
B. Programme financing 38
C. Summary benefits and economic analysis 38
D. Sustainability 41

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Aquaculture Business Development Programme
Final Design Report
Main Report

Appendices
Appendix 1: Country and rural context background 43
Appendix 2: Poverty, targeting and gender 49
Appendix 3: Country performance and lessons learned 61
Appendix 4: Detailed Programme description 67
Appendix 5: Institutional aspects and implementation arrangements 87
Appendix 6: Planning, M&E and learning and knowledge management 125
Appendix 7: Financial management and disbursement arrangements 133
Appendix 8: Procurement 145
Appendix 9: Programme cost and financing 157
Appendix 10: Economic and Financial Analysis 161
Appendix 11: Draft Programme Implementation Manual 169
Appendix 12: Compliance with IFAD policies 173
Appendix 12.1: Social, Environmental and Climate Review Note 175
Appendix 13: Contents of the Programme Life File 191

Working papers
(Bound separately)
WP1: Poverty, gender and targeting
WP2: Fisheries subsector and aquaculture
WP3: Aquaculture value chains and PPPPs
WP4: Access to finance for aquaculture
WP5: Financial management arrangements
WP6: Procurement capacity assessment
WP7: Institutions and implementation arrangements
WP8: Programme Costs and Financing
WP9: ABDP economic and financial analysis
WP10: Water requirements for aquaculture in Kenya
WP11: Aquaculture extension and advisory services
WP12: Draft Programme Implementation Manual
WP13: Mainstreaming nutrition
WP14: Aquaculture research and development
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Final Design Report
Main Report

Currency equivalents
Currency Unit = Kenya Shilling (KES)
USD 1.00 = KES 104
Weights and measures
1 kilogram = 1,000 g
1.000 kg = 2.204 lb
1 kilometre (km) = 0.62 mile
1 metre = 109 yards
1 square metre = 1,076 square feet
1 acre = 0.405 hectare
1 hectare = 2.47 acres
Abbreviations and acronyms
AAK Aquaculture Association of Kenya
ABDP Aquaculture Business Development Programme
AfDB African Development Bank
AFFA Agriculture, Fisheries, and Food Authority
AFIPEK Association of Fish Processors and Exporters of Kenya
AIE Authority to Incur Expenditure
ARW Annual Review Workshop
ASAL Arid and Semi-Arid Lands
ASDS Agriculture Sector Development Strategy 2010-20
ASE Aquaculture Support Enterprise
AWPB Annual Work Programme and Budget
BP Business Plan
CDF County Development Fund
CF Conversion Factor
CG County Government
CIDP County Integrated Development Plan
CIT County Implementation Team
CoG Council of Governors
COSOP Country Strategic Opportunities Programme
CPC County Programme Coordinator
CPCC County Programme Coordination Committee
CPE Country Programme Evaluation
CPFT County Programme Facilitation Team
CPI Corruption Perception Index
CPSC County Programme Steering Committee
CRF County Revenue Fund
CSA Climate Smart Aquaculture
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Aquaculture Business Development Programme
Final Design Report
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DA Designated Account
DHS (Kenya National) Domestic Household Survey
DSA Daily Subsistence Allowance
DVS Directorate of Veterinary Services
EAC East African Community
EAFFRO East Africa Freshwater Fisheries Research Organization
EAP Environment Action Plan
EIA Environmental Impact Assessment
EIRR Economic Internal Rate of Return
EMCA Environmental Management and Coordination Act, 1999
EMP Environmental Management Plan
ENRM IFAD Environmental and Natural Resource Management Policy
ERR Economic Rate of Return
ERS Economic Recovery Strategy
ESMP Environment and Social Management Plan
ESP Economic Stimulus Programme
EU European Union
FAM Financial and Accounting Manual
FAO Food and Agriculture Organization of the United Nations
FFS Farmer Field School
FHH Female-Headed Household
Fi Fingerling
FI Financing Institution
FIQA Fish Quality Assurance
FM Financial Management
GALS Gender Action Learning System
GDP Gross Domestic Product
GE/WE Gender Equality and Women’s Empowerment
GIS Geographic Information System
GIZ Gesellschaft für Internationale Zusammenarbeit
GoK Government of Kenya
HACCP Hazards Analysis Critical Control Point
HDI Human Development Index
HH Household
HIV/AIDS Human Immunodeficiency Virus/Acquired Immunity Deficiency Syndrome
HR Human Resources
IAA Independent Aquaculture Aggregator
ICB International Competitive Bidding
ICT Information and Communication Technology
IFAD International Fund for Agricultural Development
IFMIS Integrated Financial Management Information System
IFPRI International Food Policy Research Institute
IGA Income Generating Activity
ILO International Labour Organisation
IPSAS International Public Sector Accounting Standard
KALRO Kenya Agricultural and Livestock Research Organization
KARI Kenya Agriculture Research Institute
KBS Kenyan Bureau of Standards
KCEP Kenya Cereal Enhancement Programme
KCEP-CRAL Kenya Cereal Enhancement Programme - Climate Resilient Agricultural Livelihoods Window
KEBS Kenya Bureau of Standards
KENAF Kenya National Farmers Federation
KENAO Kenya National Audit Office
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KES Kenya Shillings
KFS Kenya Fisheries Service
KfW Kreditanstalt für Wiederaufbau
KIHBS Kenya Integrated Household Budget Survey
KIPPRA Kenya Institute of Public Policy Research and Analysis
KM Knowledge Management
KMAP Kenya Market-led Aquaculture Programme
KMFRI Kenya Marine Fisheries Research Institute
KNBS Kenya National Bureau of Statistics
KWFT Kenya Women Finance Trust
LBDA Lake Basin Development Authority
LIB Limited International Bidding
LVFO Lake Victoria Fisheries Organization
M&E Monitoring and Evaluation
MBA Masters in Business Administration
MERL Monitoring, Evaluation, Reporting and Learning
MFB Microfinance Bank
MFI Microfinance Institution
MoALF Ministry of Agriculture, Livestock and Fisheries
MoU Memorandum of Understanding
MSME Micro-, Small- and Medium-sized Enterprise
Mt Metric Ton
NASEP National Agriculture Extension Strategy
NCB National Competitive Bidding
NEMA National Environment Management Authority
NFSCC National Food Safety and Coordination Committee
NGO Non Governmental Organization
NIMES National Integrated Monitoring and Evaluation System
NPV Net Present Value
NRM Natural Resource Management
ODK Open Data Kit
OIE Oficina Internacional de Epizootias (World Organization for Animal Health)
PC Programme Coordinator
PCR Programme Completion Report
PCU Programme Coordination Unit
PDR Programme Design Report
PEFA Public Expenditure and Financial Accountability
PFA Programme Financing Agreement
PFM Public Financial Management
PIM Programme Implementation Manual
PP Procurement Plan
PPOA Public Procurement Oversight Authority
PPPP Public-Private-Producer Partnership
PPRA Public Procurement and Regulatory Authority
PROFIT Programme for Rural Outreach of Financial Innovations and Technologies
PRSP Poverty Reduction Strategy Paper
PS Principal Secretary
PSC Programme Steering Committee
QE Quality Enhancement
R&D Research and Development
RAS Recirculating Aquaculture System
RB-COSOP Results Based Country Strategic Opportunities Programme
RFP Request for Proposal
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RIAT Ramogi Institute of Advanced Technology
RIMS Results and Impact Management System
ROSCA Rotating Savings and Credit Association
RSF Risk Sharing Facility
SACCO Savings and Credit Cooperative Organisation
SAG Smallholder Aquaculture Group
SASRA SACCO Societies Regulatory Authority
SBD Standard Bidding Document
SCCO Sub-county Cooperatives Officer
SCFO Sub-county Fisheries Officer
SCPIT Sub-county Programme Implementation Team
SCSDO Sub-county Social Development Officer
SCVO Sub-county Veterinary Officer
SDA State Department of Agriculture
SDCP Smallholder Dairy Commercialization Programme
SDF&BE State Department of Fisheries and Blue Economy
SDL State Department of Livestock
SECAP Social, Environmental and Climate Assessment Procedures
SEIA Strategic Environmental Impact Assessment
SIYB Start and Improve Your Own Business
SME Small- and Medium-sized Enterprise
SMEP Small Micro Enterprise Programme
SoE Statement of Expenditure
SP Service Provider
SPC Special Procurement Committee
SUN Scaling Up Nutrition
TA Technical Assistance
ToRs Terms of Reference
ToT Training of Trainers
TSP Technical Service Provider
TTC The Trilateral Cooperation
UNDESA United Nations Department of Economic and Social Affairs
UNDP United Nations Development Programme
UNEP United Nations Environment Programme
USD United States of America Dollars
UTaNRMP Upper-Tana Natural Resource Management Programme
VC Value Chain
VCF Value Chain Finance
VSLA Village Savings and Loan Association
WA Withdrawal Application
WFP World Food Programme
WHO World Health Organization
WRMA Water Resources Management Authority
WRUA Water Resources User Association
WUA Water User Association

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Aquaculture Business Development Programme
Final Design Report
Main Report

.M ap of the Programme area

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Republic of Kenya
Aquaculture Business Development Programme
Final Design Report
Main Report

Executive Summary 1
Strategic Context. Smallholder agriculture and livestock production are under mounting pressure in
Kenya from shortages of productive land and the negative effects of climate change, particularly on
rainfed crops, pastures and livestock. In response, the mass of subsistence farmers on the margins
of markets are seeking ways to adjust their mixed farming systems to minimize risks, make optimum
use of their scarce resources and earn a living. Despite advances in the national economy, a
significant proportion of rural people remain in poverty.
In this deteriorating rural economic context, diversification of agricultural production and rural incomes
is extremely important. Aquaculture has been identified as one such diversification strategy. The
inland aquaculture Subsector in Kenya has been growing rapidly in response to declining capture
fisheries and increasing national demand for fish. The gap between demand and production is
projected to increase to 360,000 mt/year by 2025, resulting in rising prices and a continuing decline in
fish consumption – currently 3.5 kg/person/year compared to a global average of 16.3 kg/person/year.
The Government of the Republic of Kenya (GoK) launched a large-scale aquaculture support
programme under the Economic Stimulus Programme (ESP) during the period 2009 – 2013 to
promote smallholder aquaculture fish production through targeted support for input supply, fish
production, post-harvest management and related activities. The ESP achieved a rapid expansion in
the productive infrastructure in the Subsector, including regions of the country with little history of fish
production or consumption. However, the aquaculture fisheries value chains are still not well
articulated, with clear weaknesses in the availability of good quality fish feed and seeds, technical
services, processing and value addition enterprises, and market access. Typical smallholder fish
producers, for example those with one or two small ponds, are operating low-input/low-output on-farm
enterprises that contribute little to their livelihoods.
In 2016, the GoK asked IFAD for support in designing and funding a project that supports smallholder
aquaculture fish production. In response, IFAD fielded two design missions (in March-April and June
2017) to review the issues with GoK, the rural communities and other public and private sector
stakeholders, and to generate an appropriate package of capacity-building and investment measures
to accelerate and consolidate the expansion of aquaculture production and trade within the country by
realizing the productive potential of smallholders. The result is the Aquaculture Business
Development Programme (ABDP).
Justification and rationale. The observed rapid and continuing expansion of the aquaculture
Subsector in Kenya offers a major developmental opportunity for alleviating rural poverty and
malnutrition, and building climate resilience for poor households. The central idea is to assist large
numbers of smallholders to become profitable fish producers or village-level providers of related
services within a secure value chain framework and, in so doing, to promote a step-change in
nutritional well-being in the wider communities. As with other agricultural and livestock activities, the

1 Final mission composition: Hani Elsadani (Overall Mission Leader, IFAD), Geoffrey Rockliffe-King
(Deputy Mission Leader), Richard Abila (Lead Advisor and Fisheries Specialist, IFAD), Julius Manyala
(Fisheries Expert), Alice Jesse (Aquaculture Specialist, FAO), Andrew Dibo (Extension Specialist), Marian
Odenigbo (Nutrition Specialist, IFAD), Edith Kirumba (Climate/Natural Resource Management Specialist,
IFAD), Sixto Requena (Private sector and Specialist), Paul Picot (Rural Finance Specialist), Chiara
Romano (Targeting, Gender and Youth Specialist), James Mbwika (Value Chain Specialist and overall
mission coordination), Juan Morelli (Economic and Financial Analyst), Fredrick Kagaba (Financial
Management Specialist), Wojciech Dubelaar (Knowledge Management/M&E Specialist, IFAD) and Joseph
Nganga (Institutions and Implementation Arrangements Specialist, IFAD). Mr Harrison Kaisa (Aquaculture
Specialist, WorldFish) and Mr Gunjan Dallakoti (Youth Employment Expert, ILO) joined part of the mission
activities.
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