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Market Baseline Assessment to Support Preparedness

Mukuru Informal Settlements
June, 2013

Kenya witnessed one of the worst droughts in the recent history in the second half of 2011, which was exacerbated by high inflation, rising fuel prices and a weakened economy. While the aid entities focused on responding to the crisis in the arid and semi-arid regions, the livelihoods of the poor and vulnerable urban population were often ignored. To access basic essentials, the poor urban population resorted to unhealthy livelihoods strategies and cut down on non-food expenditures related to health, education and sanitation.

Oxfam conducted a market assessment to assess the most critical markets for households living in Nairobi's informal settlements. This assessment analyzed the maize, water and credit markets, selected because they are either related to survival needs (maize and water), or because they help to protect and promote livelihoods (credit). Though referred to as a market "baseline," this study was essentially an early PCMMA.

In July 2011, maize prices were two to three times higher than during the same period in 2010. Partly because of this, individual consumption of maize - the key staple food in Mukuru - was well below the level recommended by WFP in 2011. The maize market in Kenya has much more scope to expand, but low technology production, poor storage facilities, corruption, political control and poor implementation of legislation and policy impact the integration of the market and its ability to cope with drought or food price increases. During normal times, the market is well integrated and fairly competitive. However, maize prices increased significantly during the crisis due to monopolies over imports, hoarding of maize and overall maize shortages. To help ensure adequate maize consumption by vulnerable Mukuru households, this assessment suggests cash grants for small shops, posho mills and food vendors, cooked food vouchers for vulnerable households, cash grants for very poor households (with in-kind food aid as a fallback in case of maize shortages) and advocacy for social protection programming and increased transparency regarding maize market activity.

The water market in informal settlements is supplied by the National Water Sewerage Corporation (NWSC) via private water vendors and CBO water kiosks. Limited infrastructure in the settlements has compromised both the reliability of supply but also the quality of water. Prices fluctuate according to supply; in places where supply is sporadic, the average price of water can be 8 times above the price in more formal settlements. There is a chronic water shortage in the informal settlements even in normal times, and households have even less access to water during emergencies. Therefore, this report recommends interventions during both “normal” and “emergency” years. The baseline response recommendations include increasing the water supply, improving household-level water storage, improving household purchasing power, creating more CBOs and pressuring NWSC to enforce its rules and regulations. The emergency response recommendations include offering cash grants and vouchers, water tankering, providing water treatment options and constructing pipelines from boreholes to water vendors.

Both formal and informal credit market systems interact within the informal settlements. The target population has access to informal sources of credit within their communities, but they are excluded from most formal and informal lending systems. Gaps for credit markets are mostly demand-side problems, as regulations and requirements for servicing credit are out of range of most vulnerable households. This assessment recommends advocating for safety nets and ID registration for very poor and poor households, linking with institutions that could provide grants for the poor, promoting savings groups and providing cash grants to poor households and small traders.

Report authors: 
Not specified
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