Deal of the day

Oxfam GB Consultancy Job (Debt & Social Spending)

TERMS OF REFERENCE

AN ANALYSIS OF THE SOCIO-ECONOMIC IMPACT OF DEBT SERVICING ON SOCIAL SPENDING TO LOW-INCOME HOUSEHOLDS IN NAIROBI AND MOMBASA COUNTY

1. Background, rationale, and purpose of the study

Kenya’s public debt has increased about five-fold from the year 2013 to 2020. At the beginning of 2013, the value of the countries public debt was about Ksh.1.7 trillion and at the end of the year 2020 public debt had risen to 7.06 trillion. This rapid rise in the country’s public debt has been attributed to the government’s heavy investment on infrastructure development which do not give immediate returns to service the debts. The immediate effect of large public debt is huge debt servicing cost. Debt servicing can pose negative impacts on the households through introduction of new taxes and increased rates for existing taxes which reduce household consumption sets; as well as crowding out of public spending on social services. The effects of increased taxation and reduction in social spending have disproportionate effects on low-income households who largely depend on the basic public services for their wellbeing.

It is estimated that COVID-19 may push up to 500 million people into poverty globally -40 million in Sub-Saharan Africa while worsening existing inequalities that it has helped expose across the world. According to the World Bank Economic Update 2020 on Kenya, poverty rose by 4% moving an additional 2 million people into poverty, whereas unemployment has doubled to 10.4% as outlined by the Kenya National Bureau of Statistics Quarterly Labour Force Survey. Working hours have dropped from 50 to 38 hours per week, while one in every 3 household businesses have shut down and revenue from household businesses has dropped by 50%.

Consequently, there is a growing concern on the effects of the growing debt and specifically the impact of its servicing on the low-income households in Kenya. It is against this background that Oxfam intends to commission a study that will provide empirical evidence on how debt servicing is impacting low income households in two selected counties in Kenya.

The paper will provide a knowledge base for Oxfam in Kenya on the socio0economic impact of debt servicing on citizens, especially the low-income households. The knowledge is crucial to informing influencing interventions for achieving the country strategy across a range of programmatic and policy related issues.

2. Specific object and objectives of the study

The overall purpose of the proposed study is to assess the impact of public debt servicing on the social spending and impact on social spending to the low-income households in two counties in Kenya (Nairobi City and Mombasa) The specific objectives of the study are:

· To establish the correlation between debt servicing and social spending

· To establish the impact of changes in social spending to low income households

· To assess the trend in the investment on the loan-driven infrastructural development on socio-economic development in the past 5 years (2015-2020)

· To determine the opportunity costs of debt financing to social economic prosperity of low-income citizens

· To analyse the levels of citizens participation in debt cycle (borrowing, re-financing, and repayments

3. Key questions of the study

What is the correlation between debt servicing and social spending?

What is the impact of changes in social spending on low-income households?

What are the trends in debt financed infrastructural led development on socio-economic development?

What are the spaces for citizen participation in the debt cycle (borrowing, re-financing and repayments)?

What are the forgone services and benefits by government on low income citizens and SMEs as a result of debt servicing obligations?

4. Scope of the study and approach and methods, establishing the basic methodological requirements (if applicable)

The study will focus on the forgone revenues towards debt servicing on budgetary allocations to sectors such as health, education, and social protection as well as the effects on county allocations to Mombasa and Nairobi counties. The study will bring out the adverse effects of these reduction in social spending and allocation on low income households in Nairobi and Mombasa counties. This study will use both quantitative and qualitative data collected from both primary and secondary sources. The data will be robust, verifiable and collected using ethical practices. The consultant will propose a method of analysis and subsequent presentation. The report should be presented in a logical, strategic, reader friendly and simple language.

5. Consultancy team: qualifications and skills needed,

At the minimum, the consultant(s) must possess the following:

  • At least a Master’s in Economics, Public Finance, Public Policy, Law or any other related discipline in Development studies.
  • Demonstrated academic qualifications or experience in economics, political science, anthropology or any other related discipline in Social Science.
  • Experience in evidence-based Policy Research and Analysis, Development Research and Policy, Public Policy Analysis and Economic Policy Analysis
  • Experience in working on Economics, Finance or Law in both public and private sector
  • Demonstrate a good understanding of the Kenyan context particularly economic and social context with practical working experience in the country
  • Experience of effective interaction with local and national institutions, both government and private sector as well as International Financial Institutions on economic and finance matters.
  • Be Conversant with current fiscal and economic laws, policies and practice in Kenya
  • Practical application of cross cutting themes like gender mainstreaming, M&E, Advocacy.
  • Excellent analytical and report writing skills.

6. Schedule, budget, logistics and deliverables. Include outline of the report (see below)

The Schedule is as follows:

Inception Report

Within 8 days after signing the contract

The inception report should detail the following:

 The consultant’s clear understanding of the proposed assignment

 Methodology to be used for the assignment.

 Data types, collection plans and analytical approach

 Overall work plan for the assignment

Zero Draft Report – 20 working days after submission of the Inception Report

Final Report within the last five days to the expiry of the project duration which is approximated at 40 working days

7. Dissemination strategy, plan and responsibilities for sharing and using the findings.

The research and analysis shall be used by Oxfam in Kenya and partners to better understand the dynamics of debt servicing on economic development, government social spending, household spending power and overall impact on poverty and inequality in Kenya to enable the development of effective strategies for influencing policy and legislation.

8. Process of the selection of the team and expectations for study proposal

Firms or Consultant(s) who meet the requirements should submit expression of interest (Maximum 15 pages), which should include the following:

  • A suitability statement, including commitment to availability for the entire assignment.
  • A brief statement on the proposed case study methodology including a detailed plan.
  • A detailed financial proposal. The financial proposal should include daily costs
  • Updated curriculum vitae that clearly spell out relevant qualifications and experience.

The analysis will be used to influence the relevant policies, legislations, International Financial Institutions, and the Government of Kenya.

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