No. 11: The State of Household Food Security in Nairobi, Kenya

This report presents the results of a city-wide household food security survey of 1,434 Nairobi households, conducted by the Hungry Cities Partnership and the University of Nairobi. Among the key findings was that 70% of households in Kenya’s capital experience food insecurity, with one-quarter severely food insecure. As the first city-wide survey of household food security in Nairobi, this report provides researchers and policy-makers with detailed data and information about the overall food security picture, as well as important insights into the operation of the city’s food system. In particular, the report demonstrates the vital importance of Nairobi’s food markets and associated informal food sector. Consumers believe that the informal food economy offers a wide range of products at a cheaper price than formal food outlets. However, the choice of formal or informal food sources depends on perceptions of a range of factors including affordability, variety, flexibility, proximity, convenience, credit facilities, health risks, freshness and quality. The Hungry Cities Food Purchases Matrix shows which kinds of foods are purchased at which outlets, as well as how many households purchase a particular food item. Findings include that informal markets are popular for fresh vegetables, fruits, chicken and fish, while supermarkets are the main source for maize meal, rice, pasta, tinned foods, frozen foods, tea, coffee, sugar and confectionary

No. 21: Inclusive Growth and Informal Food Vending in Nairobi, Kenya

This report presents and analyzes the findings of a city-wide informal food vendors survey conducted by the Hungry Cities Partnership (HCP) in Nairobi, Kenya, in October 2019. It builds on, and should be read in conjunction with previous HCP reports on Nairobi: HCP Report No. 6: The Urban Food System of Nairobi, Kenya (Owuor et al 2017) and HCP Report No. 11, The State of Household Food Security in Nairobi, Kenya (Owuor 2018). This report, which is divided into nine sections, provides an up-to-date overview of the informal food sector in Nairobi’s food system. The next section describes the survey methodology and the third section analyzes the demographic characteristics of the sampled food vendors including gender, age, education level, migrant status, and occupations. The fourth section looks at starting an informal food business in terms of the reasons for entering the informal sector, when the business was started, business premises, sources of start-up capital, and business licensing. The fifth describes the types of foods sold, sources of stock, business expenses, net monthly profit, current value of enterprise, family dependence on informal vendor revenue, access to infrastructure and services, and employment creation. Section six is focused on food vendor strategies such as their locational preferences, setting of prices, business strategies, and financial inclusion, while section seven concentrates on operating challenges including competition, and threats to safety and security. Section eight explores the future plans of informal food vendors. The last section presents the summary of findings and conclusions

Testing Market Integration for Fresh Pineapples in Kenya

This paper is based on a survey of thirty-one market actors from producing and consumption markets in Kenya. The data was collected through personal interviews. In analyzing integration of p ineapple markets we use Ravallion-type model. Results show that pineapple market in Kenya is oligopsonistic in nature with aspects of collusion amongst the urban middlemen and local market traders thus barring further entry by oth er potential actors. There was little market integration between urban markets and producing markets, and no integration between the rural producing markets. However, model results show that information flow between production and consumption markets significantly influence market integration, an indicator for efficiency in resource allocation and price transmission which is likely to result in lower transaction costs or higher profits to market actors. The paper recommends for policy intervention to promote information flow in the pineapple market chains as a strategy for improving rural incomes and encourage more market actors to enter and participate for efficiency in the marketing system.marketing Channel, Marketing efficiency, market integration, Crop Production/Industries, Marketing,

No. 06: The Urban Food System of Nairobi, Kenya

Nairobi is a city of stark contrasts. Nearly half a million of its three million residents live in abject poverty in some of Africa’s largest slums, yet the Kenyan capital is also an international and regional hub. In East Africa, rapid urbanization is stretching existing food and agriculture systems as growing cities struggle to provide food and nutrition security for their inhabitants. Nairobi is no exception; it is a dynamically growing city and its food supply chains are constantly adapting and responding to changing local conditions. It is also an international city and the extent to which it is food secure is increasingly predicated on food imports from the regional East African Community and other international sources. Informal traditional value chains have a variety of actors and intermediaries that increase transaction costs and create an inefficient post-harvest procurement network, thereby pushing food products out of the reach of those who need them most. The majority of Nairobi’s food purchases are from informal food vendors. The city’s urban poor rely on the informal food sector for several reasons including that it provides food close to where they live and work, credit and barter are often available, small quantities can be purchased, and many items are sold more cheaply than at formal outlets. The leading income-generating activity for women in Nairobi’s poor communities is selling fruit and vegetables

HCP report no.6 : the urban food system of Nairobi, Kenya

In Nairobi the urbanization of poverty is rapid and ongoing. At the same time, economic and policy reform is also prominent, suggesting the potential for prosperity and a sustainable future. This publication provides detailed information regarding food distribution, demographics, land use, housing, formal and informal economic activity. Evidence relating to food insecurity and its relationship to the food system in Nairobi is based on case studies of low-income areas. For the larger city-wide survey of household food security and food sourcing patterns, see the related report “HCP report no. 11: the state of household food security in Nairobi, Kenya”. http://hdl.handle.net/10625/57937Social Sciences and Humanities Research Council (SSHRC

HCP report no. 11 : the state of household food security in Nairobi, Kenya

This detailed report presents the results of a city-wide household food security survey conducted by the Hungry Cities Partnership (HCP) and the University of Nairobi (2015). The survey used four indicators to assess the different dimensions and levels of food insecurity in the city: Household Food Insecurity Access Scale (HFIAS); Household Food Insecurity Access Prevalence (HFIAP); Household Dietary Diversity Score (HDDS); and, Months of Adequate Household Food Provisioning (MAHFP). One major issue of vital importance is the city’s food markets and the associated informal food sector.Social Sciences and Humanities Research Council (SSHRC

Assessing Smallholder Farmer's Participation in the Wheat Value Chain in North-West Mt. Kenya

Wheat is the second most important carbohydrate staple in Kenya and is produced by both smallholder and large-scale farmers. Smallholders are the majority, but produce <20% of the total national production. Compared to large-scale farmers, they have been considered to be less efficient producers and thus fail to benefit fully from their participation in the wheat value chain. This study aims at establishing the value accruing to smallholder and large-scale farmers participating in wheat production in north-westMt. Kenya. For comparative purposes and to explore the potential of smallholder farmers, a sample of 58 smallholder and seven large-scale farmers was selected for the study. We use budget analysis to determine the gross output, cost of production and gross margins attained by the smallholder and large-scale farmers. Further, an analysis of constraints to productivity is done to establish the factors hindering farmers from reaching high yield potential. Results of the study show that smallholder farmers obtain lower yields, have higher costs of production per bag of wheat and lower gross margins compared to large-scale farmers. High cost of inputs, low market prices, low bargaining power, high cost of machinery services, diseases and weeds were among factors excluding smallholder farmers from benefitting from their participation in the value chain. However, results also show that smallholder farmers can produce wheat profitably albeit with necessary support. Thus, interventions should consider these constraints and aim at improving smallholder farmers’ horizontal and vertical integration in the value chain. We recommend continued investment in research and development on wheat, adoption of climate resilient agricultural practices, improvements in the fertilizer subsidy programme and creating or increasing participation in producer groups that will provide possibilities of increased bargaining power and reduction of costs through improved access to machinery services, markets and credit

A Garch Approach to Measuring Efficiency: A Case Study of Nairobi Securities Exchange

The efficiency of capital markets is important if savers funds are to be channeled to the highest valued stocks. A recent review of markets in Africa categorized the Nairobi Securities Exchange as one which has no tendency towards weak form efficiency. Recent efforts to establish its efficiency have used mainly Ordinary Least Squares regression and have yielded inconclusive results. Ordinary Least Squares method assumes that the variance of the error term obtained is constant over time. However due to economic cycles some time periods are known to be generally riskier than others and the latter assumption fails to hold. There is therefore need to use other models which relax this assumption. The Autoregressive Conditionally Heteroscedastic models have been popular and widely used. They recognize that the value of the variance of errors depends upon previous lagged variances and lagged innovation terms. Kenya has also increasingly embraced ICT which may be attributed to the comparative lower cost of access to internet via computers and mobile phone technology. This is expected to increase the rational buyers in the market none of whom can influence prices in the market which may make the market more efficient. This study first used non parametric methods to check for randomness and independence of stock market returns at the Nairobi Securities Exchange. Results show that daily returns are non-random and the GARCH analysis shows that the current returns are dependent on the returns of the previous 3 days. The GARCH (3,1) model shows that returns on a particular day would be determined by the mean returns plus a white noise error term which would vary by 25.3% of return on day t-1, 9.5% of return on day t-2 and 12.05% of returns on day t-3 at 0.05 level of significance.  This signifies market inefficiency of the weak form. Keywords: Market Efficiency, Weak-Form Hypothesis, OLS, GARC

Do Earnings Announcement Have an Effect on the Level of Efficiency of The Nairobi Securities Exchange?

Capital markets are normally considered to be efficient when prices reflect all the available information. However, there are instances when this information takes several weeks to be incorporated into share prices. This leads to investors’ making uninformed investment strategies on whether to hold or dispose shares thus unable to maximize returns. The study determined stock returns of firms listed in NSE and further determined the level of efficiency of NSE. An empirical evidence of anomalies for the study was obtained from 31 companies listed at the Nairobi Securities Exchange, which traded and announced their earnings in 2007. A data collection sheet was used to collect secondary data on market indices, daily closing share prices and traded volumes for a period of 15 days before and after earnings announcement. Daily market adjusted abnormal and cumulative abnormal returns were computed and a further t-test at 5% level of significance done to determine the effect of earnings announcement on stock returns and results interpreted. Earnings announcement had a significant effect on stock returns when CAR was evaluated indicating market inefficiency but AR was not significant for individual companies. From the findings of the study, it was concluded that the Nairobi Securities Exchange is not semi-strong form efficient. Therefore, the Capital Markets Authority should eliminate the factors causing market inefficiencies, in order to boost-to-boost investors’ confidence. Key words: Efficient Market Hypothesis, Abnormal Returns, Cumulative Abnormal Returns, and Nairobi Securities Exchang

Migration, rural–urban connectivity, and food remittances in Kenya

This paper draws on data from a representative city-wide household food security survey of Nairobi conducted in 2017 to examine the importance of food remitting to households in contemporary Nairobi. The first section of the paper provides an overview of the urbanization and rapid growth of Nairobi, which has led to growing socio-economic inequality, precarious livelihoods for the majority, and growing food insecurity, as context for the more detailed empirical analysis of food security and food remittances that follows. It is followed by a description of the survey methodology and sections analyzing the differences between migrant and non-migrant households in Nairobi. Attention then turns to the phenomenon of food remitting, showing that over 50% of surveyed households in the city had received food remittances in the previous year. The paper then uses multivariate logistic regression to identify the relationship between Nairobi household characteristics and the probability of receiving food remittances from rural areas. The findings suggest that there are exceptions to the standard migration and poverty-driven explanatory model of the drivers of rural–urban food remitting and that greater attention should be paid to other motivations for maintaining rural–urban connectivity in Africa