Document of The World Bank Report No: ICR00003730documents.worldbank.org/curated/en/710301471883981006/pdf/ICR... · The World Bank Report No: ICR00003730 ... PCN Project Concept

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Document of The World Bank

Report No: ICR00003730

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-46970 TF-12914 TF-12919 TF-97025 TF-97301)

ON A

CREDIT

IN THE AMOUNT OF SDR 11.02 MILLION (US$17.03 MILLION EQUIVALENT)

TO THE

REPUBLIC OF KENYA

FOR A

KENYA YOUTH EMPOWERMENT PROJECT

July 11, 2016

Social Protection and Labor Global Practice Africa Region

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CURRENCY EQUIVALENTS

Exchange Rate Effective May 13, 2016

Currency Unit = Kenya Shillings (KSh) KSh 1 = US$0.01 US$1 = SDR 0.71

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

BA Beneficiary Assessment LST Life Skills Training

CAS Country Assistance Strategy M&E Monitoring and Evaluation

CPS Country Partnership Strategy MIS Management Information System

DFiD The UK Department for International Development

MoYAS Ministry of Youth Affairs and Sports

EST Entrepreneurship Skills Training NYC National Youth Council

FM Financial Management OPM Office of the Prime Minister

GoK Government of Kenya PAD Project Appraisal Document

ICR Implementation Completion and Results Report

PCN Project Concept Note

IDA International Development Association PDO Project Development Objective

IOI Intermediate Outcome Indicator PCU Project Coordination Unit

ISR Implementation Status and Results Report RSR Rapid Social Response

ILO International Labor Organization SDR Special Drawing Rights

IT Information Technology SST Sector Specific Training

IFR Interim Unaudited Financial Reports TA Technical Assistance

JSDF Japanese Social Development Fund TF Trust Fund

TNA Training Needs Assessment

KEPSA Kenya Private Sector Alliance TTL Task Team Leader

KKV Kazi Kwa Vijana UNDP United Nations Development Program

KPIA Kenya Poverty and Inequality Assessment USAID United States Agency for International Development

KSh Kenya Shilling YEDF Youth Enterprise Development Fund

KYEP Kenya Youth Empowerment Project

Regional Vice President: Makhtar Diop Country Director: Diarietou Gaye

Acting Global Practice Director: Omar S. Arias Diaz Practice Manager: Dena Ringold

ICR Task Team Leader: Emma Mistiaen

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KENYA

Kenya Youth Empowerment Project Table of Contents

Data Sheet ........................................................................................................................... v

B. Key Dates ....................................................................................................................... v

C. Ratings Summary .......................................................................................................... vi D. Sector and Theme Codes ............................................................................................... vi E. Bank Staff ..................................................................................................................... vii F. Results Framework Analysis ........................................................................................ vii G. Ratings of Project Performance in ISRs ....................................................................... xi H. Restructuring (if any) ................................................................................................... xii I. Disbursement Profile ................................................................................................... xiii Introduction ...................................................................................................................... xiv

1. Project Context, Development Objectives, and Design .............................................. 1

1.1 Context at Appraisal .................................................................................................... 1

1.2 Original Project Development Objectives (PDO) and Key Indicators ........................ 2

1.3 Revised PDO ............................................................................................................... 3

1.4 Main Beneficiaries ...................................................................................................... 3

1.5 Original Components .................................................................................................. 3

1.6 Revised Components ................................................................................................... 5

1.7 Other Significant Changes ........................................................................................... 6

2. Key Factors Affecting Implementation and Outcomes .............................................. 7

2.1 Project Preparation, Design and Quality at Entry ....................................................... 7

2.2 Implementation ............................................................................................................ 9

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization .......... 11

2.4 Safeguard and Fiduciary Compliance ....................................................................... 14

2.5 Post-Completion Operation/Next Phase .................................................................... 15

3. Assessment of Outcomes .......................................................................................... 16

3.1 Relevance of Objectives, Design and Implementation ............................................. 16

3.2 Achievement of Project Development Objectives .................................................... 17

3.3 Efficiency .................................................................................................................. 19

3.4 Justification of Overall Outcome Rating ................................................................... 20

3.5 Overarching Themes, Other Outcomes and Impacts ................................................. 21

3.6 Findings of Beneficiary Survey and/or Stakeholder Workshops .............................. 23

4. Assessment of Risk to Development Outcome ......................................................... 24

5. Assessment of Bank and Borrower Performance ..................................................... 24

5.1 Bank Performance ..................................................................................................... 24

5.2 Borrower Performance .............................................................................................. 26

6. Lessons Learned........................................................................................................ 27

7. Comments on Issues Raised by Borrower and Implementing Agency..................... 28

Annex 1 - Project Costs and Financing............................................................................. 29

Annex 2 – Outputs by Component and Dropped Results Indicators ................................ 30

Annex 3 - Economic and Financial Analysis .................................................................... 36

Annex 4 - Bank Lending and Implementation Support/Supervision Processes ............... 40

Annex 5 - Beneficiary Survey Results .............................................................................. 42

Annex 6 - Stakeholder Workshop Report and Results ..................................................... 45

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Annex 7 - Summary of Borrower's ICR and/or Comments on Draft ICR ........................ 46

Annex 8 - Comments of Cofinanciers and Other Partners/Stakeholders .......................... 60

Annex 9 - List of Supporting Documents ......................................................................... 61

v

Data Sheet

A. Basic Information

Country: Kenya Project Name:

Kenya Youth

Empowerment

Project

Project ID: P111546 L/C/TF Number(s):

IDA-46970,TF-

12914,TF-12919,TF-

97025,TF-97301

ICR Date: 07/06/2016 ICR Type: Core ICR

Lending Instrument: SIL Borrower:

MINISTRY OF

FINANCE -

GOVERNMENT OF

KENY

Original Total

Commitment: USD 60.00M Disbursed Amount: USD 16.89M

Revised Amount: USD 17.47M

Environmental Category: C

Implementing Agencies:

Ministry of Youth Affairs and Sports

Kenya Private Sector Alliance (KEPSA)

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept

Review: 08/04/2009 Effectiveness: 08/18/2010

Appraisal: 01/19/2010 Restructuring(s): 11/01/2012

09/12/2014

Approval: 05/04/2010 Mid-term

Review: 07/31/2012 11/27/2012

Closing: 02/28/2015 02/28/2016

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C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Satisfactory

Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision:

Satisfactory Implementing Agency/Agencies:

Highly Satisfactory

Overall Bank Performance:

Satisfactory Overall Borrower Performance:

Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments

(if any) Rating

Potential Problem

Project at any time

(Yes/No):

No Quality at Entry

(QEA): None

Problem Project at any

time (Yes/No): Yes

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Other social services 84 84

Public administration- Other social services 3 3

Vocational training 13 13

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Theme Code (as % of total Bank financing)

Education for the knowledge economy 6 6

Other social protection and risk management 50 50

Social Safety Nets/Social Assistance & Social Care

Services 44 44

E. Bank Staff

Positions At ICR At Approval

Vice President: Makhtar Diop Obiageli Katryn Ezekwesili

Country Director: Diarietou Gaye Johannes C.M. Zutt

Practice

Manager/Manager: Dena Ringold Lynne D. Sherburne-Benz

Project Team Leader: Cornelia M. Tesliuc Yasser Aabdel-Aleem Awny

El-Gammal

ICR Team Leader: Emma S. Mistiaen

ICR Primary Author: Emma S. Mistiaen

Betty Hanan

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

The proposed Project Development Objective (PDO) is to support the Government of Kenya (GoK) efforts to increase access to youth-targeted temporary employment programs and to improve youth employability.

Revised Project Development Objectives (as approved by original approving authority)

The revised PDO is to support the Government of Kenya's efforts to improve youth employability.

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(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Percentage of interns who complete the internship and are immediately employed by their internship employer or who have found employment with a new employer or are starting a business (disaggregated by gender)

Value

quantitative or

Qualitative)

0 35% 78%

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

OVER-ACHIEVED. The percentage was 83% for men and 74% for women with an average of 78% overall. The actual achievement was 153% over the target value.

Indicator 2 : Percentage of interns employed or self-employed six months after internship completion (disaggregated by gender).

Value

quantitative or

Qualitative)

0 50% 76%

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

OVER-ACHIEVED. The percentage was 82% for men and 70% for women with an average of 76% overall. The actual achievement was 52% over the target value.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Number of youth participating in the internship and training program

Value

(quantitative

or Qualitative)

0 10,000 13,305

Date achieved 05/05/2010 05/05/2010 02/28/2016

ix

Comments

(incl. %

achievement)

OVER-ACHIEVED. The actual achievement was 33% over the target value. The number is defined as the number of young people who graduated from the internship program during the six cycles.

Indicator 2 : Total number of internship weeks provided.

Value

(quantitative

or Qualitative)

0 200,000 289,781

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

OVER-ACHIEVED. The actual achievement was 45% over the target value. This indicator is defined as including the weeks that interns spent in training and work placement and thus captures the total duration of the internship program.

Indicator 3 : Total number training weeks provided by third party providers.

Value

(quantitative

or Qualitative)

0 100,000 148,273

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

OVER-ACHIEVED. The actual achievement was 48% over the target value.

Indicator 4 : Total number of youth completing life skills training.

Value

(quantitative

or Qualitative)

0 15,000 19,532

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)


Indicator 5 : Completion rate of internship.

Value

(quantitative

or Qualitative)

N/A 95% 86%

x

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

PARTIALLY ACHIEVED. The actual achievement corresponded to 90% of the target value.

Indicator 6 : Number of regular monitoring reports, produced by KEPSA MIS according to the agreed reporting standards.

Value

(quantitative

or Qualitative)

0 8 16

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)


Indicator 7 : Percentage of participants satisfied with internship and training program.

Value

(quantitative

or Qualitative)

N/A 95% 86%

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

PARTIALLY ACHIEVED. The actual achievement corresponded to 90% of the target value. The data is from the Beneficiary Assessment of Cycle 4.

Indicator 8 : Percentage of employers satisfied with internship and training program.

Value

(quantitative

or Qualitative)

N/A 95% 84%

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

PARTIALLY ACHIEVED. The actual achievement corresponded to 88% of the target value.

Indicator 9 : Number of district officers in the MoYAS trained through KYEP.

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Value

(quantitative

or Qualitative)

0 315 382

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)


Indicator 10 : Number of districts covered with communication activities.

Value

(quantitative

or Qualitative)

0 50 5 5

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Comments

(incl. %

achievement)

ACHIEVED. The communication activities relate to disseminating information on the Project in Nairobi, Mombasa and Kisumu and providing communication-support to the graduation ceremonies.

Indicator 11 : Action plan for the establishment of the Youth Council developed.

Value

(quantitative

or Qualitative)

N/A Action Plan developed

National Youth Council established

Date achieved 05/05/2010 05/05/2010 02/28/2016

Comments

(incl. %

achievement)

OVER-ACHIEVED. The NYC was established and it is functioning.

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual Disbursements

(USD millions)

1 06/30/2010 Satisfactory Satisfactory 0.00



4 09/13/2011 Satisfactory Moderately Satisfactory 11.49

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5 12/04/2011 Moderately

Unsatisfactory Moderately

Unsatisfactory 11.49

6 06/25/2012 Moderately

Unsatisfactory Moderately Satisfactory 12.57

7 01/19/2013 Moderately Satisfactory Moderately Satisfactory 4.77








H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at

Restructuring

Amount Disbursed at Restructurin

g in USD millions

Reason for Restructuring & Key Changes Made

DO IP

11/01/2012 Y MU MS 4.69

The first restructuring cancelled Component 1 of the Project and modified the scope of Components 2 and 3. The cancelled amount included the full value of Component 1. The disbursed amounts made prior to the restructuring for activities under Component 1 were fully repaid by the Government.

The following changes were made: (i) revision of the PDO; (ii) revision of the results framework ; (iii) introduction of retroactive financing of the operating costs in the amount of US$ 0.65 million incurred on or after January 1, 2012; and

xiii

(iv) adjustment to implementation arrangements, including its financial management and procurement arrangements.

09/12/2014 MS MS 13.05

The second restructuring related to the extension of the closing date for a total of 12 months, extending the closing date from February 28, 2015 to February 28, 2016.

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below:

Outcome Ratings

Against Original PDO/Targets Moderately Unsatisfactory

Against Formally Revised PDO/Targets Satisfactory

Overall (weighted) rating Satisfactory

I. Disbursement Profile

xiv

Introduction At the time of preparation, poverty and unemployment was a prominent challenge in

Kenya (particularly among youth) and the Government had renewed its commitment to addressing youth unemployment. The incidence of poverty for households with at least one unemployed youth was 55 percent, compared to 46 percent among all households. The Government developed the “Marshall Plan for Youth Employment and Development” in 2007, aiming to address youth unemployment and idleness. In April 2009, the Government launched the Kazi Kwa Vijana (KKV)1 program, consisting of labor-intensive public works projects targeted to youth in rural and urban areas. The Kenya Youth Empowerment Project (KYEP) intended to strengthen the Government’s efforts to address youth unemployment. The KYEP reflected the Government’s demand at the time and consisted of three components: Component 1, aimed to expand and improve the Government’s KKV program, led by the Office of the Prime Minister (OPM); Component 2, a pilot initiative to provide training and internship opportunities to youth led by Kenya Private Sector Alliance (KEPSA); and Component 3 aimed to build capacity and support youth-related policy development in the Ministry of Youth Affairs and Sports (MoYAS). The overall risk of the Project was however rated Substantial and some risks materialized during the first year of implementation. In 2011, there were emerging concerns about accountability of funds in the KKV program identified by the World Bank’s Financial Management review, noting significant weaknesses in the fiduciary controls of the sub-projects and co-mingling of KYEP and government-financed activities. This was compounded by the lack of experience of the coordinating unit to implement World Bank supported projects and the Government also recognized the difficulty of strengthening systems for Component 1 to ensure effective control over all sub-project activities (due to the decentralized nature of the component, working through six line ministries).

Subsequently the World Bank and the Government jointly took a decisive and proactive decision to cancel Component 1.2 This decision was not because the original design was inherently wrong, but reflected what the World Bank and the Government are encouraged to do jointly: to learn from fast-paced developments and react promptly. The restructuring is therefore not considered to be a failure, but rather a responsible reaction to realities on the ground. The Project remained with Components 2 and 3, which were coherent and capable of generating valuable results. The Project Development Objective (PDO) was revised to “support the Government of Kenya’s efforts to improve youth employability”.3

1 “Kazi kwa Vijana” means “work for youth” in Kiswahili. 2 This was the first restructuring of the Project. A second restructuring was done in 2014, only to extend the closing date of the Project with one year to February 28, 2016. 3 The original PDO was to “support the Government of Kenya efforts to increase access to youth-targeted

temporary employment programs and to improve youth employability”.

xv

The implementation of the restructured KYEP was successful and lessons learned have informed a new operation targeting unemployed youth in Kenya. The training and internship pilot was implemented successfully and the objective of the restructured KYEP was met. Results from the impact evaluation of the second cycle show that eighty (80) percent of men, and fifty (50) of women, who were placed in internships were in paid work 14 months after internship completion, compared with an average of 69 percent of men and 43 percent of women in the control group, equivalent to 11 and 7 percentage points increase in the probability of being employed among male and female participants respectively.4

4 The findings for young women, however, are not fully reliable as those for young men because of the high attrition experienced in the control group.

1

1. Project Context, Development Objectives, and Design

1. The KYEP was approved on May 4, 2010. The Financing Agreement (Cr. 4697-KE) was signed on May 20, 2010 and it became effective on August 18, 2010. The Project was also supported by two recipient-executed Rapid Social Response (RSR) grants, one for Component 1 (US$ 1 million) and the other for Component 2 (US$ 0.5 million). 1.1 Context at Appraisal

2. Kenya had experienced a turnaround in its economy, showing strong economic growth, but still had a large population of poor people and high levels of inequality. After a long period of stagnation, Kenyan economic growth increased from 2.9 percent in 2003 to 7.1 percent in 2007. This growth, however, had begun to slow in 2008, mainly due to the post-election violence; the global financial, food, and fuel crises; and the worst drought in a decade. Growth fell to 1.7 percent in 2008, but recovered slightly to 2.5 percent in 2009 and was projected by the World Bank to grow to 3.5 percent in 2010. According to 2006 data, 46 percent of Kenya’s 35.5 million people lived below the national poverty line, including 19 percent in extreme poverty. The economic slowdown of 2008 and the related crises were expected to deepen poverty. Household consumption ratios were markedly unequal, with the ratios of the top 10 percent to the bottom 10 percent standing at 20:1 in urban areas and 12:1 in rural areas.1 3. Poverty had a predominantly young face in Kenya and unemployment among youth had become a major challenge for the county. According to 2006 data, the incidence of poverty for households with at least one unemployed youth was 55 percent, compared to 46 percent among all households. The share of young people – age 15-29 – was also growing. Youth comprised around 11 million of the population in 2006 compared to 8.5 million in 1999. Youth in Kenya faced serious challenges, including high rates of unemployment and under-employment. The overall unemployment rate for youth was double the adult average, at about 21 percent. 4. The social and economic costs of the failure to include youth in Kenya’s development were vast. These costs were borne directly by young people themselves in the form of diminished health, well-being, and income. Ensuring that youth were successfully integrated into the economy and provided with skills would open the pathway to a demographic dividend for development to improve Kenya’s competitiveness, raise household incomes, reduce poverty, and create a virtuous circle of investment and growth. It was also recognized that the failure to achieve this integration raised the possibility of further social disruption. According to the Kenya Country Assessment, 2 youth unemployment was a major contributor to frustration and tension in the country, especially in urban areas.

1 This compared to a national average of 5:1 in Tanzania and only 3.3:1 in Ethiopia. 2 Kenya Country Social Assessment (World Bank 2007).

2

5. The financial and economic crises prompted the Government of Kenya to renew

its commitment to addressing youth issues and youth unemployment emerged as a top priority. The Government developed the “Marshall Plan for Youth Employment and Development” in 2007, emphasizing a coordinated, multi-sectoral approach to addressing the problem of youth unemployment and youth idleness. In April 2009, it launched the Kazi Kwa Vijana (KKV)3 program, aiming to employ youth in rural and urban areas in labor-intensive public works projects, to be implemented by different line ministries. 6. The MoYAS was a relatively new ministry with limited experience or capacity. MoYAS was established in 2005 to address youth concerns in Kenya. In 2006, the National Youth Policy was developed to guide and mainstream youth-related interventions in the country and in 2009, the National Youth Council (NYC) was created. Several important youth-related programs, such as vocational training through Youth Polytechnics and the Youth Enterprise Development Fund (YEDF), were introduced. Youth and jobs were recurring themes in every plan drawn up by the government. These initiatives notwithstanding, MoYAS faced capacity constraints to ensure effective implementation and monitoring of youth-related policies and interventions, and the staff lacked the relevant experience to operate efficiently on the ground. 7. Programs directly targeting youth in Kenya were generally fragmented with low

coverage, but there was increasing interest from development partners to support youth programs. For example, the United States Agency for International Development (USAID) had undertaken an assessment of youth and embarked on a project called “Yes, Youth Can” that aimed to provide support over three years for young people to participate in promoting reforms, generate employment, and empower themselves through a new youth-managed empowerment fund. The United Kingdom’s Department for International Development (DfID) was preparing a project to support a new program to improve the performance of a market system that was important for poor people, including unemployed youth. 1.2 Original Project Development Objectives (PDO) and Key Indicators 8. The original PDO was to support the Government of Kenya efforts to increase

access to youth-targeted temporary employment programs and to improve youth

employability. 9. The wording of the PDO was the same in the main text of the Project Appraisal Document (PAD), Annex 3 of the PAD, and the Financing Agreement. The achievement of the PDO was to be measured by the following performance indicators:

• Number of additional KKV beneficiaries;

• Number of additional person days provided in KKV public works;

3 “Kazi kwa Vijana” means “work for youth” in Kiswahili.

3

• Percentage of interns who complete the internship and are immediately employed by their internship employer or who have found employment with a new employer or are starting a business (disaggregated by gender); and

• Percentage of interns employed or self-employed six months after internship completion (disaggregated by gender).

1.3 Revised PDO 10. The revised PDO after the first restructuring was to support the Government of

Kenya’s efforts to improve youth employability. The achievement of the revised PDO was to be measured by the following two indicators4:

• Percentage of interns who complete the internship and are immediately employed by their internship employer or who have found employment with a new employer or are starting a business (disaggregated by gender); and

• Percentage of interns employed or self-employed six months after internship completion (disaggregated by gender).

1.4 Main Beneficiaries 11. The main beneficiaries of the original Project would be unemployed youth. The target group of Component 1 was unemployed youth aged 18-35 (the same age bracket as the existing KKV project at the time). The compensation level for participation in Component 1 was set low to ensure that only unemployed youth were attracted and districts with high unemployment levels would be prioritized. Community members in general would benefit from improved access to social and economic infrastructure. The main beneficiaries for Component 2 on Private Sector Internship and Training were youth in the 15-29 age bracket who had at least eight years of schooling and had been out of school for at least a year and were not working. In addition, the implementing agencies of the three components—the OPM, KEPSA, and MoYAS—would benefit from technical assistance (TA), provisions of equipment and systems, and training. 1.5 Original Components 12. Component 1: Labor-intensive works and social services (US$43 million or 72 percent of total project costs). The main objective of this component was to help the Government reduce the vulnerability of unemployed male and female youth by expanding and enhancing the effectiveness of the KKV Program. The component was to finance labor-intensive projects providing income opportunities to participating youth and enhancing the communities’ access to social and economic infrastructure. This was to be achieved by: (i) creating employment opportunities for youth in labor-intensive and social

4 The key performance indicators were simplified by dropping the first two indicators (that were linked to Component 1) and retaining the third and fourth original PDO indicators.

4

service projects; (ii) testing innovative methods on selected KKV subprojects and mainstreaming the viable ones into the KKV program;5 (iii) developing and implementing the monitoring and evaluation (M&E) framework and the Management Information System (MIS); and (iv) improving the management and coordination capacity of the OPM. 13. Component 2: Private Sector Internships and Training (US$15.5 million or 26 percent of total project costs). The main objective of this component was to improve youth employability by providing youth with work experience and skills through the creation of internships and relevant training in the formal and informal sectors (with priority given to the five growth sectors defined by Vision 2030, the Government’s development strategy). This component was a pilot to address the lack of skills and work experience for unemployed young women and men. There was limited evidence from similar youth interventions, particularly from developing countries, and through the pilot approach, the Project aimed to create specific evidence from Kenya. A comprehensive impact evaluation was undertaken to create evidence and guide the future design of similar programs in Kenya. The pilot provided targeted youth, with an opportunity to acquire relevant work experience and skills through a private sector internship and training program. Implementation of the component started in Nairobi and Mombasa was added after the first six-month program cycle. It was to expand to one rural area in the second year of project implementation. Instead, the component was expanded to Kisumu due to difficulties in finding a large base of employers to offer internships in rural areas. 14. Component 2 was split into training and work experience. Training consisted of three main phases: (i) Life Skills Training aimed at strengthening non-cognitive skills; (ii) Core Business Skills Training; and (iii) Sector-Specific Skills Training to promote specific technical skills. After the training, youth were provided with 12 weeks of work experience in the formal and informal sectors.6 15. Component 3: Capacity Building and Policy Development (US$1.5 million or 2 percent of total project costs). The component supported enhancing the capacity of MoYAS to implement the national youth policy and increasing institutional capacity for youth policy planning. The following areas were supported: (i) developing and implementing a training program for MoYAS staff (particularly district youth development officers); (ii) developing and implementing social audits to improve transparency and accountability in the implementation of Components 1 and 2; (iii) implementing communication activities to increase awareness of the Project among youth; and (iv) supporting policy development for youth through provision of TA to the NYC and carrying out analytical work.

5 As presented in the Project Appraisal Document (Annex 4), possible areas of enhancement and innovation identified were: (i) contracting arrangements; (ii) introduction of new types of projects and activities; (iii) community involvement selection/identification of activities; (iv) work planning and structuring of employment; (v) payment systems; (vi) training of beneficiaries; (vii) social audits; and (viii) linkages to skills training. 6 Employers were expected to provide on-the-job training and mentorship. In the informal “Jua Kali”

sector, internships consisted of apprenticeship training by master craftsmen.

5

1.6 Revised Components

16. The overall risk of the Project was rated Substantial and some risks materialized during the first year of implementation. In 2011, there were emerging concerns about accountability of funds in the KKV program identified by the World Bank’s Financial Management (FM) review, noting significant weaknesses in the fiduciary controls of the sub-projects and co-mingling of KYEP and government-financed activities (see paragraph 45). This was compounded by the lack of experience of the coordinating unit to implement World Bank supported projects and the Government also recognized the difficulty of strengthening systems for Component 1 to ensure effective control over all sub-project activities (due to the decentralized nature of the component, working through six line ministries).

17. Subsequently the World Bank and the Government jointly took a decisive and proactive decision to cancel Component 1.7 This decision was not because the original design was inherently wrong, but reflected what the World Bank and the Government are encouraged to do jointly: to learn from fast-paced developments and react promptly. The restructuring is therefore not considered to be a failure, but rather a responsible reaction to realities on the ground. The Project remained with Components 2 and 3, which were coherent and capable of generating valuable results. The first restructuring was approved in November 2012 when the government repaid the disbursed amount to the World Bank.8 18. The first restructuring also slightly expanded the scope of Components 2 and 3 in ways outlined in the following paragraphs. A small amount of funds was reallocated from Component 3 to Component 2 (US$0.12 million). The changes to these components were intended to enhance achievement of the revised PDO. For ease of reference, the component numbers 2 and 3 are retained in this report. 19. Component 2: Private Sector Internships and Training Program (US$15.62 million or 92 percent of revised total project costs). The component was revised to support the following two areas (and all other elements of the original component remained unchanged): (i) enhanced training for master craftsmen (who provided placements for interns in the informal sector); and (ii) increased support to improve KEPSA’s implementation capacity through a Project Officer to manage the Project in Kisumu, an Office Assistant and an Internship Assistant at KEPSA. 20. Component 3: Capacity Building and Policy Development (US$1.41 million or 8 percent of revised total project costs). The following changes were made to Component 3 (and all other elements of the original component remained unchanged): (i) the budget for implementation of communication activities to be carried out by KEPSA was

7 This was the first restructuring of the Project. A second restructuring was done in 2014, only to extend the closing date of the Project with one year to February 28, 2016. 8 The disbursed amount of US$9.3 million from the IDA credit for Component 1 and US$0.4 million from the associated RSR grant were fully repaid. The last related repayment by the Government to the World Bank was processed on September 4, 2012.

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transferred from MoYAS to KEPSA (ii) MoYAS assumed responsibility for communication activities related to the overall Project; (iii) the social audits were cancelled since they were more important for the oversight of Component 1 (Component 2 already included a number of additional M&E activities); and (iii) the resources to fund policy studies was increased to strengthen the ability of MoYAS to synthesize the large body of research on youth issues, carry out other policy studies to inform Kenya’s youth policies, and integrate the lessons from the KYEP into the design of future youth programs and policies.

1.7 Other Significant Changes

21. In addition to the changes of component 2 and 3, the first restructuring introduced retroactive financing and the safeguard policies were no longer triggered. Retroactive financing included operating costs for component 2 in the amount of US$0.65 million incurred on or after January 1, 2012. Also following the cancellation of Component 1 (which funded small-scale civil works that had environmental and social effects) Operational Policies (OP) 4.10 and 4.01 were no longer triggered and the environmental category for the Project was changed from B (partial assessment) to C (not required).9 The first restructuring made no change to the closing date, which remained February 28, 2015. 22. The institutional arrangements for the Project were also modified during the first restructuring to eliminate those related directly to Component 1. Institutional arrangements for Component 2 and 3 remained unchanged. The overall responsibility for Project coordination shifted from the OPM to MoYAS and financial management and procurement arrangements were changed. There was already an existing Subsidiary Agreement between MoYAS and KEPSA that governed the flow of funds for Component 2, and the Project was fully consistent with MoYAS’s mandate to support youth skills development. 23. A second restructuring was carried out to extend the closing date for a total extension of 12 months. The amendment of the Financing Agreement, by letter of September 12, 2014, extended the closing date from February 28, 2015 to February 28, 2016. The extension: (i) accommodated implementation delays: (ii) allowed additional time for the Project to meet and exceed its PDO targets; and (iii) provided additional time to test a revised training and internship structure that removed sector-specific training and replaced it with more on-the-job and life skills training. 24. As noted in Paragraph 1, the Project was supported by two trust funds (TFs) – TF97025 and TF97301. TF97301 (US$0.5 million) was fully disbursed prior to the first restructuring. TF97025 was cancelled, and the remaining balance was transferred into two new TFs: TF 12919, Support for the Internship Program of KEPSA for US$585,000 (signed August 30, 2012) and TF12914, support for the formulation of the Kenya National Safety Net Program for US$392,000.

9 An environmental and Social Safeguards Completion Report for Component 1 was prepared in November 2011 that found the implementation of safeguards to be satisfactory up to that point.

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2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry 25. Background analysis informing project design. The World Bank was engaged in analytical work in Kenya on youth and employment issues during the period 2005-2010 and the implementation of an intervention funded by the Japanese Social Development Fund (JSDF). This analytical work helped define priority areas. The Project design also benefitted from the findings of the Kenya Poverty and Inequality Assessment (KPIA),10 the findings of which clearly identified that unemployed youth was one of Kenya’s main disadvantaged groups with unemployment rates (at about 21 percent) that were double the average of adult unemployment. The crisis in early 2008 following the disputed December 2007 elections highlighted the importance of addressing poverty and inequality and prompted the Government to renew its commitment to addressing youth issues. Decreasing the vulnerability of young people by providing some of the most disadvantaged unemployed youth with income opportunities in the short term, as well as market-oriented skills and work experience for increasing their employability in the medium and long term, became a priority for the Government (paragraph 5). 26. Project design addressed several lessons learned, both in implementing similar projects in other parts of the world, and in implementing projects in Kenya. A review of the KKV project was also undertaken to inform project design. Key lessons learned and reflected in the design of the Project included: (i) targeting in countries with high poverty rates is challenging, but it can be done; (ii) using clear and transparent criteria for the selection of social and economic infrastructure mitigates risks of possible political interventions or disputes from non-beneficiaries; (iii) engaging employers and the private sector in defining skill competencies is key to success in ensuring the relevance of the training activities; (iv) recognizing diverse training provider sources and the use of competition to promote flexible, market-driven skills are essential to ensure relevance and adequacy of the training; (v) introducing life skills alongside vocational and technical skills is key for program success; and (vi) in Kenya, experience showed the importance of incorporating solid governance elements to ensure transparent and corruption-free operations. 27. A number of design options were considered during preparation, but were rejected, including: (i) creating the Project as a part of a more comprehensive Social Protection Development Policy Loan. This was decided against to allow for a more rapid response to youth unemployment and to build on the momentum generated under the KKV program; (ii) a traditional public works project providing works, employment, and income support to the population in general. The Government and the World Bank decided to build on the existing KKV, targeted at youth and pilot Component 2 to increase the skills of youth to better prepare them for the job market; (iii) a project that focused primarily on urban slum areas. It was decided that such a project would have a smaller impact than the proposed Project (even though the Project did eventually operate only in urban areas, it did

10 World Bank Report No. 44190-KE of April 2009.

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not solely focus on urban slum areas); (iv) use of microcredit and small business development. It was decided that the Project was intended to open pathways to microcredit for self-employment through counseling, the use of mentors, and linking with the existing YEDF; (v) support to supply-side training. It was decided that such a project would consume large amounts of funding with only medium-term potential impact; (vi) training providers to develop internships with private employers. This option was rejected due to the difficulty of having large numbers of training providers contacting individual employers; and (vii) developing the internship program in the Ministry of Labor’s Department of Industrial Training. This option was rejected in favor of using private sector leadership to enhance the willingness of employers to participate in a program for a vulnerable group of youth. 28. The Government’s commitment and ownership of the Project was evident from the level of involvement during the preparation stage and the participation in its design.

Youth employment was and still is an investment priority for the Government. The Government’s commitment to enhancing and expanding the social safety net in the country was also clear from the increasing resources allocated to this area and the number of programs that had been introduced in the previous few years. 29. The Project was prepared in collaboration with a number of development partners active in Kenya, some of whom contributed to preparation activities. United Nations Development Program (UNDP) supported project preparation by financing a consultant to conduct a quick assessment of the existing training providers in Nairobi. International Labour Organization (ILO) provided technical assistance to the design of public works activities, including reviewing the experience of KKV in its first phase. USAID finalized a review of youth issues that covered policy and program issues in Kenya. The report confirmed the importance of the areas that the Project was designed to address. 30. Risk Assessment. The overall risk rating was correctly assessed as Substantial, but two risks should have been rated higher. The PAD identified 20 risks rated: 3 – Low, 9 – Modest, and 8 – Substantial. Reasonably specific mitigation measures were proposed for most risks, and the majority worked to reduce the associated risk level. However, in the view of this evaluation, the following two risks merited a higher rating: (i) the “lack of adequate implementation capacity”, referring to OPM’s lack of experience with implementing an IDA-supported project was rated Modest. In practice however, this led to problems and in retrospect one could argue that closer attention should have been paid to this risk; and (ii) “insufficient coordination between line ministries” was rated Modest, noting that the current institutional structure of KKV was working well. In practice, however, in 2011, the OPM recognized the difficulty of strengthening systems for Component 1 sufficiently to ensure effective control over all sub-project activities due to the decentralized nature of the component, working through six line ministries.11 These difficulties contributed to the decision to proceed with the cancellation of Component 1 (paragraph 17).

11 Water and Irrigation; Regional Development Authorities; Roads; Forestry and Wildlife; Environmental and Mineral Resources; and Local Government.

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2.2 Implementation 31. The first restructuring provided an opportunity to make further adjustments to improve implementation of the remaining two components. Some of these changes (reflected in section 1.6), proved to be instrumental in the success of the pilot, particularly the engagement of additional staff dedicated to project implementation in KEPSA.

32. KEPSA encountered a number of challenges during implementation of the pilot, but demonstrated the ability to successfully adapt and adjust. Given that KEPSA did not have previous experience working with World Bank-funded projects and given the pilot nature of Component 2, there were challenges during implementation. Key challenges are presented below, but the success of changes made by KEPSA throughout implementation led to improved performance. This is reflected in the Highly Satisfactory rating for this component since November 2015. 33. At the beginning of the pilot, one of the main challenges was the cumbersome procurement processes to engage training providers. With no World Bank procurement experience, KEPSA had to deal with a considerable amount of procurement for training providers. For some of the contracts, KEPSA had also underestimated the cost (or the financial proposals by the firms were inflated), which exacerbated procurement challenges. These challenges resulted in an implementation delay of about a year, which led to a second restructuring to extend the closing date (from February, 2015 to February, 2016) to enable implementation of Cycle 612. 34. A delay in the transfer of funds from the Ministry to KEPSA led to delays in the launch of Cycle 5.13 When KEPSA attempted to accelerate implementation, both the Ministry and KEPSA failed to anticipate the increase in required resources, which exceeded the amount approved in the government’s budget. Subsequently, there was a shortfall in the government’s approved budget and disconnect with KEPSA’s annual work plan, which led to a delay in the provision of counterpart funding.

35. A value-for-money audit, commissioned by the Ministry, further interrupted implementation. The Ministry commenced a value-for-money audit to establish whether the implementing arrangements of Component 2 were efficient. During the time of this audit, no payments were made to KEPSA other than for Cycle 4 of the internship and the impact evaluation (both of which were ongoing) until discussions on the draft report were finalized. The draft audit flagged some issues, however each issue was satisfactorily

12 The PAD had planned for eight different training cycles. The cycles were introduced to make the implementation manageable for KEPSA, with a certain number of youth in each cycle receiving training and internship. Initial delays in training resulted in the implementation of six rather than eight cycles. However, more youth were included in each of the cycles resulting in more beneficiaries than planned. 13 Component 2 was implemented in 6 different cycles over the life of the Project. One cycle consisted of the full project cycle from application to completion of the internship.

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addressed by KEPSA. Eventually, the Ministry decided not to finalize the audit report. The process, however, delayed implementation of Component 2. 36. The pilot under Component 2 was modified to address some of the main implementation-related challenges. These modifications were completed as part of the implementation process and did not form part of any formal restructuring. Regular beneficiary assessments and tracer surveys provided valuable information to inform modifications from one cycle to another (see Section 2.3). In addition, three years into project implementation, a review of the KYEP was undertaken, by a World Bank consultant, to document lessons learned to inform discussions on potential modifications to the pilot and to inform future designs of youth interventions.14 Several of these lessons are reflected in section 6, but the following are some of the key challenges affecting implementation efficiency and how KEPSA addressed them:

a. Challenges in verification of eligibility criteria: It proved difficult for the PMU to verify that youth were not in school and not working. As a result, some youth entered the pilot, but were later found to be enrolled in education or training programs while others were working and this brought about dropout rates higher than anticipated. To address this problem: (i) more information was provided to targeted youth about the program; (ii) youth were required to confirm that they were not in school; and (iii) application forms were adjusted to include the applicants’ specific engagement at the time of application (part time work, casual employment, or operating a business etc.). For youth who were selected, more attention was also given during orientation sessions to ensure that youth understood the program targeting, expectations, and requirements. These measures contributed to decreasing the dropout rate.

b. Cumbersome youth-employer matching process: To enhance the chances of success for the internship, KEPSA attempted to match youth’s and firms’ preferences, which was time consuming and labor intensive. The period to complete a cycle was extended from six to eight months. Attempts were also made to automate the process, but it proved difficult since the process was time bound (unlike other automated placements where an intern’s details are keyed into a system and matched to an opportunity once the opportunity arises). The PMU also provided capacity-building and awareness sessions during employers’ meetings. Although the KEPSA team became more efficient after each cycle, the matching process continued to be cumbersome throughout the Project.

c. Dropout of youth: Factors that led to youth dropping out of the Project included implementation delays, mismatches with employers, a lack of interest in the skills training, family and personal commitments, and travel distances from homes to training providers or employers. Some youth also dropped out when they found jobs. Retention was challenging particularly for the most vulnerable when processes were

14 Arvil V. Adams, The Kenya Youth Empowerment Project: Lessons from Implementation for Scaling up, World Bank Consultant, February 26, 2014.

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delayed and youth were forced to engage in other activities to make ends meet. The dropout rate decreased as KEPSA improved its processes, including increasing communication activities and awareness.

d. Low female participation: The review of Component 2 (Adams, 2014) noted that a

larger number of men were placed in internships than young women.15 After this review, KEPSA made a deliberate effort to maintain gender balance by stratifying the random selection of youth by gender (as per the planned design) and drawing equal numbers for young men and women. Also, to better understand the gender dimensions of the program and inform future programming, KEPSA commissioned a gender assessment, which explored women and men’s reasons for joining, participating in, and leaving the Project.16

e. Challenges with managing multiple contracts with training providers: KEPSA

engaged six different sector-specific training providers and the management of these contracts was labor intensive and cumbersome. The process was, however, most intense initially as KEPSA was learning by doing.

f. Sector-specific training was not considered to add much value: Based on feedback from employers and beneficiaries, a decision was made in Cycle 5 to eliminate the sector-specific training and replace it with an additional week of life skills training and an additional four weeks of workplace experience.

37. For Component 3 on Capacity Building and Policy Development, the Ministry was only successful at implementing some activities. The Component was fully successful at sensitizing youth and making them aware of the Project. It exceeded its goal for the capacity building and training of youth development officers, which resulted in the officers being more motivated and able to support the KYEP with sensitization activities in the field. A number of planned activities under this Component were, however, not implemented, and less than US$1 million of the US$1.5 million allocation was used. Some of the challenges, which affected implementation of the component were (i) the Government was restructured twice during implementation of the KYEP with resultant changes in staff and delays in decision making and procurement of consultants, and (ii) the lack of consensus under these circumstances within the Ministry as to which youth policy issues required further study. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 38. Design. The PAD included four PDO indicators and 19 intermediate outcome indicators (IOI). Annex 2 includes the original results indicators that were dropped during the first restructuring. The revised results framework included two PDO indicators and 11

15 In Cycle 1, the proportion of young men and women in wage and self-employment averaged 66 percent to 34 percent respectively. 16 Vindele, Chokera, Gender Assessment of the Kenya Youth Empowerment Project, Private Sector

Training and Internship Component, February 25, 2016.

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IOIs (see data sheet). The amended results framework was appropriate as two of the original PDO indicators, as well as several of the IOIs, related to the cancelled Component 1. The indicators were appropriate to collect information to monitor progress toward achieving the PDO. There was a strong focus on M&E in the design of the KYEP, and OPM was tasked with the overall M&E coordination role. For Component 1, it was proposed that: (i) a management information system (MIS) be developed in the OPM; (ii) a beneficiary assessment be conducted; (iii) social and technical audits be undertaken for the KKV; and (iii) an impact evaluation be undertaken. For Component 2: (i) a separate MIS was to be developed, (ii) beneficiary assessments and spot checks were to be conducted; and (iii) an impact evaluation completed for Cycle 2 using a random-experimental design. Given the output focus of Component 3, the Project coordinator was to collect monitoring data on specific outputs. The overall M&E design was comprehensive and strongly focused on generating impact results, as well as lessons to inform decision making and guide program modification as needed (1.8 percent of project funds were set aside for the two impact evaluations and the technical and social audits). It was also designed to inform future policy and programming. 39. Implementation. Due to the cancellation of Component 1, M&E activities for that Component were dropped. For Component 2, KEPSA made commendable efforts to collect the necessary data to guide project implementation and to generate lessons for the future and the M&E can be considered best practice. KEPSA was successful in developing an MIS and collected data to prepare timely and comprehensive quarterly progress reports. KEPSA also undertook tracer surveys after each cycle to collect data on the beneficiaries’ labor market status six months after program completion. The tracer studies provided data on key performance indicators. They also collected feedback from employers on program implementation and the quality of training. Regular M&E allowed the Project to produce good quality data for evaluation and decision making. Information on indicators was reported by the Project Coordination Unit (PCU) through progress reports and reflected in the World Bank’s internal Implementation Status and Results Reports (ISRs).

40. Monitoring was complemented by three beneficiary assessments, providing data on key performance indicators and feedback on project implementation and beneficiaries’ satisfaction with the program (see Section 3.6 and Annex 5). In addition, an external firm was contracted to undertake an impact evaluation in Cycle 2. This evaluation estimated the causal impact of internships and different types of training on labor market outcomes (type of employment, wage), educational attainment, and risky behaviors. The design of the impact evaluation was based on a randomized assignment of internships and training packages. Two rounds of data collection were done: (i) baseline at the time youth applied for Cycle 2 (July 2012); and (ii) 15 months after the program ended (July 2014).17 During

17 A face-to-face end-line survey was administered between November and December 2013, approximately seven months after the internships had been completed, using smart phones (LG E400) to enter data. Because of technical problems, data related to the labor force participation module of the questionnaire were not collected properly and could not be used in the analysis. Given the relevance of employment outcomes for the study, the impact evaluation firm conducted a new wave of phone call interviews in July 2014—about 14 months after the participants had completed the program—asking questions related to the employment module only.

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implementation, however, KEPSA encountered difficulties regarding the impact evaluation, mainly due to the low capacity of the firm to undertake the data analysis. As a result, the World Bank provided intense technical support, KEPSA staff were sent for specific impact evaluation training, and discussions were held with the firm to guide them through the assignment. A short-term consultant was also engaged to work as a field coordinator for four months in Nairobi and the firm was required to bring on board a more qualified principal investigator. In the end, despite the efforts to improve the firm’s capacity, there were some problems collecting the end-line data and undertaking the econometric analysis of impacts. Given the unreliability of labor force participation, information was collected seven months after program completion (and never used for analysis), and the firm was asked to conduct a second round of data collection by phone. 41. The World Bank also complemented the analysis of impacts undertaken by the firm in the final impact evaluation report by producing a technical paper that applied more sophisticated econometric techniques to deal with the complex design of the impact evaluation, multiple treatment arms, and the high attrition rates that made measurement of the “average treatment effects on the treated” more complicated.18 The overall positive results on employment outcomes are the same in both reports, but the point estimates are not exactly the same since the firm did not apply the same methodology to estimate impacts.19 In terms of M&E efforts for Component 3, while data was collected by youth officers during monitoring visits and presented in reports, this data was not processed in a systematic way to feedback the implementation. Data on outputs was generated and presented in progress reports. 42. Utilization. M&E, particularly for Component 2, has been used as a management tool to evaluate the status of implementation of activities and enabled KEPSA to make adjustments during implementation. It has also served to inform policy makers for decision-making purposes. KEPSA made several changes to operational procedures during implementation of the pilot to address some of the challenges encountered. For example, thanks to the careful recordkeeping of beneficiaries in the MIS and information on satisfaction levels of youth and employers KEPSA was able to adjust the application process (including forms and verification measures), strengthen the communication activities for youth and employers (creating better awareness of the pilot and manage expectations) and address the low rates of female participation. Another example is the decision to drop the sector specific training which was as a result of feedback collected through the beneficiary assessments. Thanks to the solid M&E KEPSA was also able to document lessons learned, which informed the design of the new youth operation (see Section 2.5). Lastly, the positive results from the impact evaluation were valuable for making the case that it is worth investing and scaling-up the pilot operation nationwide in the new World Bank-supported youth operation (see also discussion on project efficiency

18 M. Honorati, The Impact of Private Sector Internship and Training on Urban Youth in Kenya, Policy Research Paper 7404, Social Protection and Labor Global Practice Group, World Bank Group, August, 2015. 19 Ipsos Ltd., Kenya Youth Empowerment Project: Training & Internship Programme Impact Evaluation

Report, July 2015.

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in Section 3.3). The rich data and analysis will also benefit other countries embarking on similar initiatives, since there is little evidence worldwide on these types of interventions. 2.4 Safeguard and Fiduciary Compliance 43. The Environmental Assessment rated the original project as Category B, but this rating was changed to C after restructuring. The original rating of B, partial assessment, was derived from the fact that Component 1 was expected to fund small-scale civil works with limited and reversible adverse environmental and social effects on human populations or environmentally important areas that were to be site-specific and in most cases could be relatively easily mitigated. The original Project triggered two safeguards policies—OP 4.01 (Environmental Assessment) and OP 4.10 (Indigenous Peoples)—and the framework for each was prepared and put into operation for Component 1 only. The first restructuring of the project, however, eliminated any civil works that may have had adverse environmental and social effects. As a result, the Environmental Assessment rating of the Project was modified to Category C, not required, and OPs 4.10 and 4.01 were no longer triggered. 44. At the time of restructuring, the rating of the environmental and social safeguards was Satisfactory. An Environmental and Social Safeguards Completion Brief was prepared for Component 1 detailing the actions and safeguards instruments that were prepared and disclosed by the Government, as well as the related activities that had been undertaken up until the closing of Component 1. A review of a sample of environmental assessment screening sheets prepared for the subprojects demonstrated that environmental due diligence appropriate to the small scale of these sub-projects was undertaken (by local district officials and line ministries under the supervision of the OPM PIU). A field visit was also undertaken to Rongai District20 by a World Bank Safeguards Specialist, who met with the District Commissioner in Rongai, officials from the Ministry of Regional Development Authorities, and the Ministry of Forestry and Wildlife. Meetings were also held with some of the local community members who had completed the screening sheets. The findings and the final report confirmed that the application of environmental and social safeguards under Component 1 was Satisfactory until the cancellation of the component. 45. The Financial Management (FM) arrangements for the Project, including accounting, reporting, budgeting and planning, internal controls, and funds flow were considered to be effective. The FM rating for the Project was downgraded to Moderately Satisfactory in two ISRs prior to the restructuring of the Project. This downgrade was based on an FM review that concluded that the FM risk for Component 1 was high due to the following reasons: (i) OPM, as project coordinator, issued FM-related policy and expanded on FM implementation systems without seeking “No Objection” from the World Bank, as required; and (ii) significant weaknesses were observed in the fiduciary controls of the subprojects reviewed, including the co-mingling of KYEP and government-financed activities, poor quality works, and the inability to verify outputs. In response, the World

20 To Losibil (Sunguka) Water Pan and Catchment, Rongai District; and Plantation Establishments at Dundori Forest Station, Nakuru-Mau Conservancy.

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Bank (i) initiated an in-depth review of all sub-projects that had been implemented under Component 1, including sub-projects that had been started, but not yet completed, and (ii) requested that OPM instruct all implementing line ministries not to start any new subproject activities until the issues identified in the FM Review report had been addressed. The initial in-depth review found ineligible expenditures in OPM amounting to KSh 20,623,600 (around US$202,000). The FM rating was upgraded to Satisfactory after the first restructuring and remained so until the close of the Project. 46. After the restructuring, the implementing agencies maintained adequate

accounting capacity with qualified and experience accountants deployed in both the Ministry PCU and KEPSA. The Project consistently submitted quarterly interim unaudited financial reports (IFRs), which were in form and content acceptable to the World Bank and presented within the stipulated timelines. External audits were prepared and issued in a timely manner and were consistently unqualified. Using funds from the escrow account, the final audit for KEPSA was undertaken and submitted to the Bank prior to the end of the grace period. As all other audits, the final external audit was unqualified. KENAO will prepare the final audit of Component 3 and its costs will be met by the Government. The credit and grants were fully disbursed. However, disbursed but unspent funds amounting to about US$0.4 million are being returned to the World Bank. Withdrawal applications were prepared regularly and supporting documentation was complete.

47. Procurement was hampered by lack of experience in World Bank procurement processes. Issues with procurement related to slippages in the implementation of procurement plans initially under Component 1 as the OPM had little or no experience and working knowledge of World Bank procurement procedures, resulting in long delays in the implementation of the procurement plan. Procurement reviews conducted as part of implementation support missions identified some weaknesses in procurement under Component 2. Procurement processes necessitated changes to the first internship cycle. There were also issues related to contract management, which resulted in KEPSA needing to hire an experienced procurement consultant to improve its capacity to manage the large training contracts. By July 2014, the complex procurement process for the training providers had been completed and the contracts were being managed well. Therefore, the rating was upgraded to Satisfactory, a rating that was maintained up to the end of the implementation period. Procurement under the Project included (i) vehicles, (ii) office equipment, (iii) furniture, (iv) training materials, and (v) consulting services, including training providers and specific technical assistance. 2.5 Post-Completion Operation/Next Phase 48. Following the success of the KYEP, the Government has prepared a new youth operation with support from the World Bank (the Youth Employment and Opportunities Project, which credit of US$150 million was approved on May 20, 2016). The new project retains the successful elements from the KYEP, while introducing new innovations based on lessons from the pilot (see lessons in Section 6). The project will: (i) address the skills mismatch of youth by engaging training providers to work with private sector employers; (ii) support job creation at the level of new businesses, existing micro enterprises, self-

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employed youth, including hard-to-serve youth; (iii) finance access to and the quality of labor market information to help public and private actors make decisions and formulate policies; and (iv) support youth policy development, M&E, and project management. 49. Despite KEPSA’s good performance under the Project, for sustainability reasons, the Government will implement the new project (albeit in partnership with training providers and the private sector). As a result, some key staff left KEPSA for new positions elsewhere, some have remained in KEPSA with other functions, and some are still exploring other opportunities. To enable the Government and the new project to benefit from the wealth of experience that has been built in KEPSA, the World Bank has encouraged the Government to explore ways to engage some KEPSA staff who were involved in KYEP implementation in the new operation. No concrete offers have been made at the time of this writing. In the event that no staff are retained, it would be a huge missed opportunity for the new operation. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 50. The overall relevance of objectives, design and implementation is rated Substantial.

51. Relevance of Objectives. The objective of the Project (both the original and the revised PDO) was relevant and consistent with development priorities of both the Government and the World Bank and it remains high at the time of this writing. The Project directly contributed to two of the key focus areas of the Government’s overall strategy and themes in the Country Assistance Strategy (CAS): reducing vulnerability and investing in people.21 The Project directly targeted one of the most vulnerable groups in the population: unemployed youth. As noted in the KPIA (paragraph 25), unemployed youth was one of Kenya’s main disadvantaged groups. Investing in this group ensured building one of Kenya’s main elements of sustained economic growth, its young population. The Project supported the Government’s medium- and long-term priority of decreasing the vulnerability of young people by providing some of the most disadvantaged of the unemployed youth with income opportunities in the short-term, as well as market-oriented skills and work experience to improve their employability in the medium and long-term. The objective of the Project also remains relevant at the time of preparing the ICR report and is consistent with the Country Partnership Strategy (CPS) FY2014-201822, which articulates the opportunities and challenges the growing youth population faces and commits the World Bank Group to help the government in its efforts to reduce unemployment.

21 The social pillar of the government’s Vision 2030, focuses on investing in people, including in the areas of education, health, and housing, with a focus on youth, women, and vulnerable communities. 22 World Bank Group, Kenya Partnership Strategy (FY2014-2018, Partnership for Shared Growth and Prosperity, June 2014.

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52. Relevance of Design. The original and restructured project designs were consistent with their PDO. As originally designed, the Project was intended to support the Government’s efforts to (i) expand temporary youth employment and increase their income, (ii) pilot approaches to increase youth employability and earning potential, and (iii) strengthen the institutional and policy-making capacity of MoYAS. The main objective of Component 1 was to support the Government in its efforts to reduce the vulnerability of unemployed youth by expanding and enhancing the effectiveness of the existing, government-owned KKV program. This initiative was well intended, but proved too difficult to implement for reasons discussed elsewhere in this document. Component 2 was a pilot that addressed the issues of a lack of skills and work experience for disadvantaged youth. The rigorous impact evaluation documents the successful impact on youth employability. The Project has successfully tested new approaches to promote youth employability, increasing the chances of employment and higher earnings for youths. The pilot also generated a wealth of information that was used to strengthen implementation, and it has also guided policy development and scale-up of this program nationwide through the new Bank-supported project (Section 2.5). Component 3 built the capacity of MoYAS and the youth development officers to enable them to reach out more effectively to both young men and women. This capacity development is expected to benefit implementation of the new operation given that these officers will play an important role in registration, enrolment, referral, and monitoring of youth. 53. Relevance of implementation. Implementation was relevant and responsive to changing needs as demonstrated through: (i) the restructuring in 2012 when the non-performing Component 1 (Labor-Intensive Works and Social Services) was cancelled; (ii) specific modifications to certain elements of Component 2 (an additional week added to the original design of the Life Skills Training course where 19,532 youth completed this training (10,297 male, 9,235 female) and four weeks added to workplace experience); and (iii) one additional year of implementation to allow for the successful completion of Cycle 6 and a total of 13,305 youth participants (only four years had been originally planned for project implementation). 3.2 Achievement of Project Development Objectives 54. Theory of Change. The theory of change behind Component 1 is that providing youth with temporary employment opportunities will provide income opportunities and enhance communities’ access to social and economic infrastructure, thereby decreasing the vulnerability of the targeted youth. Also, as stated in the impact evaluation of the pilot program (Honorati, 2015), the theory of change behind Component 2 is that providing job‐relevant technical and life skills combined with hands‐on experience in private sector firms increases the likelihood that unemployed youth will be retained by their internship employers, will find a job in an established firm, or will start their own new business. Component 2 helped to make youth more employable in the following ways: (i) the core business training, sector‐specific training, and internships taught youth new technical and job‐relevant skills; (ii) the entrepreneurship training and actual work experience with master craftsmen equipped youth with the financial education and core business knowledge to start up a new business; (iii) the life skills training taught them better job search strategies

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and also appropriate behavioral attitudes in the workplace; and (iv) the certification that participants received for completing the KYEP training and internship program may act as a signal for employers that these youth possess certain sector‐specific and core business skills. 55. This evaluation rates achievement of the PDO as Substantial. Since the Project objectives were formally revised with the restructuring of November 2012, the project outcome was assessed against both the original and revised project objectives. The Implementation Completion and Results (ICR) evaluation was based on analyses of outcome indicators and data linked to the development objectives of the Project, as well as an evaluation of how project activities were linked to achievement of the PDO. Achievement of the PDO is reviewed in table 3.1, which shows that the majority of targets were achieved and only three IOIs were partially achieved. Achievement of the PDOs is further addressed in the paragraphs below.

Table 3.1 – Progress against Project Indicators at Closing Status Cancelled

Original PDO

% of total PDO

Revised PDO

% of total PDO

Cancelled Original

IOIs

% of total IOIs

Revised IOIs

% of total IOIs

Overachieved 2 100% 6 55%

Achieved 2 27%

Partially Achieved

3 18%

Not Achieved 2 100% 7 100%

Total 2 100% 7 100% 11 100%

56. Based on the overwhelming achievement of targets against the PDO and IOIs, as demonstrated in table 3.1 and detailed in the analysis of the results framework in the data sheet, overall Efficacy is rated Substantial. 57. When the PDO was formally revised with the first restructuring, two PDO indicators, which related to Component 1, were dropped. At the time of the restructuring, the two original PDO indicators had not been achieved (see Annex 2). The revised PDO did not alter the targets of the two remaining indicators as the closing date remained the same as originally planned and more funding and time would have been required to allow the project to increase its targets. Since its restructuring, the Project was upgraded from a Moderately Unsatisfactory rating for the original PDO to Satisfactory status, which was confirmed in the last implementation mission of February 2016. Six cycles of the training and internship program were completed in Nairobi, Mombasa, and Kisumu. The IDA credit was fully disbursed, and targets for the PDO indicators were exceeded, as were several of the targets for IOIs (table 3.1).

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58. The PDO to support the government’s efforts to improve youth employability has

been met, as evidenced by the average overall employment rate of 75 percent23 against the target of 50 percent. According to results from Cycle 5, 84 percent of young men and 73 percent of young women were employed six months after completion of their internships. The average of 76 percent exceeds the PDO target of 50 percent. The employment rate has increased in each cycle, beginning with 24 percent in Cycle 1. The Cycle 5 employment rate increased sharply from a 53 percent average in Cycle 4. As discussed in other parts of this document, based on the implementation experience after each cycle, important adjustments were made to the length, type of training, and duration of internships, which proved effective and resulted in improved targets. 59. The impact evaluation carried out on participants and a control group in Cycle 2 demonstrated an important positive impact. Results from the impact evaluation of the Cycle 2 show that 80 percent of men, and 50 percent of women, who were placed in internships were in paid work 14 months after internship completion, compared with an average of 69 percent of men and 43 percent of women in the control group, equivalent to 10.8 and 6.7 percentage points increase in the probability of being employed among male and female participants respectively.24 The difference increased to 14.2 percentage points for men completing the full training program and 8.7 percent increase for women completing the full training program. Furthermore, the beneficiary assessments conducted in Cycles 1, 2, and 4 revealed that the majority of youth participating in the training and internships expressed satisfaction with the program. The percentage of employers satisfied with the program rose steadily from a low of 64 percent in Cycle 1 and 78 percent in Cycle 2 to 84 percent in Cycle 4. Overall satisfaction rates among youth and employers participating in the training and internship program (86 percent) fell slightly below the 95 percent target. 3.3 Efficiency 60. The overall efficiency of the Project is rated High based on the efficiency analysis done for Component 2. 61. There was no economic analysis at appraisal to estimate expected impacts from Component 2. The ICR applies a cost-benefit analysis to assess the efficiency of Component 2 by comparing monetary monthly salaries of program participants with total unit costs (delivery and administrative costs).25 The overall costs of Component 2 were aligned with the planned costs at appraisal. Tracer interviews reported on monthly salaries of beneficiaries who were employed six months after program completion.

23 Tracer Surveys: 71 percent in Cycle 1, 75 percent in Cycle 3, 77 percent in Cycle 4, and 76 percent in Cycle 5 according to the impact evaluation. 24 The findings for young women, however, are not fully reliable as those for young men because of the high attrition experienced in the control group. 25 This includes program graduates who said they were working at the time of the tracer study. The question was not asked of graduates who said they were not working.

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62. Efficiency is rated High for two reasons. First, for participants of Cycles 5 and 6, the cost-benefit ratios were close to one or less than one, meaning that the discounted benefits (labor income) were equal to or larger than the cost per beneficiary (details of the analysis are presented in annex 3).26 To be more conservative and rigorous, benefits offset costs 15 months after program completion based on the impact evaluation results of Cycle 2 beneficiaries. Second, the program showed signs of efficiency over time as the cost-benefit ratio improved over time, reaching its lowest in the last cycle (6), meaning that better outputs (number of beneficiaries reached) and outcomes (employment and earnings) are achieved for a similar level of resources. Decreasing cost-benefit ratios suggest that design and implementation of the program were adapted to results, performance was well managed, and inputs (costs) were utilized more efficiently. Lastly, it is important to note that the cost-benefit analysis was completed thanks to the strong M&E system KEPSA developed, the monitoring data, and the tracer studies that were diligently conducted after each cycle. It is also worth noting that the extension of the project closing date (through the second restructuring) is not considered to have negatively affected project efficiency. The main reason for the delay originally was the delays experienced with bringing training providers on board due to cumbersome procurement processes, but it should be noted that KEPSA managed to stay on track during overlapping cycles, and the amount assigned to Component 2 remained US$15 million even after the second restructuring. In sum, KEPSA delivered the same outputs (and outcomes) within six cycles instead of eight as anticipated, hence saving on administration costs related to the application process, screening, employer mobilization, and other factors. 3.4 Justification of Overall Outcome Rating 63. Table 3.2 illustrates the ratings of relevance, efficacy, and efficiency during the two periods of implementation, under the original project design and under the restructured Project.

Table 3.2 – Outcome Ratings based on original PDO and Revised PDO

Original PDO (May 2009-May 2011) Revised PDO (April 2011-June 2015)

Relevance

Objective Substantial Substantial

Design Substantial Substantial

Implementation Modest Substantial

Efficacy Modest Substantial

Efficiency Modest High

Overall (outcome)

Moderately Unsatisfactory Satisfactory

26 Overall, the cost per participant in Cycle 6 is KSh 72,400 and average monthly earnings six months after the program is KSh 14,000. Assuming that beneficiary graduates have been earning the same average monthly income for the six months between graduation from the program and when they were interviewed, and assuming a 10 percent discount per year, the overall benefits accrued to beneficiaries is KSh 84,000.

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64. To arrive at an overall outcome rating, table 3.3 presents the split evaluation approach, weighing project achievements during the original and revised PDO periods against disbursements made during the corresponding period. The overall value achieved is 4.61, which corresponds to a Satisfactory outcome rating. This rating is consistent with the rating in the last ISR of February 26, 2016.

Table 3.3 – Overall Outcome Ratings against Original and Revised PDOs

Original PDO 2010-

2012

Revised PDO 2012-2016

(restructuring) Overall

1 Rating MU S

2 Rating value 3 5

3 Total disbursed US$ millions 3.2727 13.62 16.89

4 Weight (total disbursed/final disbursed amount of US$14 million)

19% 81% 100%

5 Weighted value (2 X 4) 0.58 4.03 4.61

6 Final rating S

Note: HU (1); U (2); MU (3); MS (4); S (5); HS (6)

65. The Satisfactory rating reflects the successful implementation of the Project, its strategic relevance, and innovative nature as described in sections 3.1 and 3.2. As noted earlier, the project objectives were in line with the government’s strategic direction and the World Bank CAS.. Some aspects of the pilot are being expanded nation-wide, with financial support from the World Bank (albeit with a different design and implementing arrangements, as detailed in Section 2.5).

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

66. Poverty Impact. The original project design had a strong focus on the poor. As noted in paragraph 2, the incidence of poverty was 46 percent among all households compared to 55 percent for households with at least one unemployed youth. Youth comprised around 11 million of the population in 2006 compared to 8.5 million in 1999. The large number of youth in Kenya’s population represented both a risk and an opportunity for economic and social development. Youth aged 15 to 29 represented one-third of the population. Half of that youth population lived in households whose family income was below the poverty line and about 38 percent were out of school and working. It should be noted that by cancelling Component 1, the poverty focus became less

27 At the time of the Restructuring $12.57 million had been disbursed, but Government refunded $9.3 million to the Bank as a result of the Restructuring and cancellation of Component 1.

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prominent due to the fact that rural youth were no longer targeted through labor-intensive works. The restructured Project did still target at-risk youth who had been out of school for at least one year with a minimum of eight years of public schooling and who were not currently working. The Project is likely to have had a positive impact on poverty in the participating areas—Nairobi, Mombasa, and Kisumu—since a large share of the youth were placed in the informal sector and many of the participating youth came from slum areas in these cities. 67. Gender and Social Development. To better understand the various gender dimensions that affected the program, KEPSA commissioned a gender assessment28 with the overall objective of assessing the gender responsiveness of Component 2. The assessment explored the experience of young men and women in the program, including reasons for joining, participating in, and leaving the program across the three implementation locations. Both primary and secondary data was gathered to inform the findings and conclusions. Qualitative data was collected from beneficiaries, employers, trainers, and key stakeholders using key informant interviews and focus group discussions. 68. The report noted that the Project was gender responsive from its inception and made several improvements and modifications during its implementation. Specifically, steps were taken in response to findings that fewer young women than men were initially admitted into the training and internship program, while at the same time women were more likely to drop out of the pilot project. The report concluded that the Project strived to be gender responsive from design through implementation. It included gender-based provisions during design, which ensured that the program outcome plans were informed by studies that identified gender-based unemployment issues within the country. The Project benefited both males and females in access to employment, encouraged savings, increased employment, and enhanced social skills among youth. During implementation, especially at the recruitment stage, the Project was responsive to ensure inclusion of both male and female youth. It further ensured more female recruitment with a provision of 50:50 ratio for both genders after the realization that there were fewer females being admitted into the program. According to the report, the channels utilized for awareness were gender sensitive. Moreover, the Project introduced deferral for pregnant women and allowed mothers with small children to attend training with their children to respond to the need for nursing mothers. However, the report concluded that male-related issues, such as the need to cater for family needs for married and self-supporting youth, which were some of the reasons for males dropping out, were not proactively addressed.

(b) Institutional Change/Strengthening

69. The Project brought about significant institutional strengthening through institutional and process changes as discussed in Section 2. Owing to work done under Component 2, several employers are now willing to offer youth internships. One thousand employers have been added over the past year to those offering internships, bringing the total number to about 3,000. Paperwork requirements for employers have been simplified.

28 Gender Assessment Report of February 25, 2006 by Vindele Chokera.

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The positive response of employers to the Project, reflected in satisfaction ratings, indicates the value being placed on the training offered by the Project and the benefits of work experience. The last aide memoire for the Project (February 2016) noted that without assigning causation, there was a sharp increase in the percentage of youth finding wage or self-employment six months after completion of the internship when an additional month was added to the internship. The response of employers is also reflected in the rising percentage of youth being retained by their internship employers. 70. In terms of Component 3, 382 youth development officers received training under the Project, against a target of 313. The Component successfully sensitized youth and made them aware of the Project, as demonstrated by the high number of applicants for Component 2. Youth officers also played an important role in helping applicants apply for the Project (filling out forms and submitting them to KEPSA). During ICR discussions, youth development officers indicated the effective role the Project played in improving their overall knowledge of issues affecting youth. The officers commended the quality and content of the training and indicated that the training provided expanded their knowledge and enthusiasm to carry out their work. These officers played a critical role in sensitization, outreach, and mobilization of youth to enroll in training and internships under the Project. This investment is also paving the way for the implementation of the new project on a national scale, which will rely on the officers as the entry point to access the interventions and monitor youth participation in the new project. It will be important to ensure proper transfer of knowledge, including operational manuals, monitoring and tracing tools, MIS, terms of reference to the Directorate of Youth (in the Ministry of Public Service Youth and Gender Affairs), and other related institutions that will participate in the implementation of the new operation. Delays would risk the loss of substantial public investment in building capacity for project management and administration as well as the delivery of training and internship services. (c) Other Unintended Outcomes and Impacts (positive or negative) 3.6 Findings of Beneficiary Survey and/or Stakeholder Workshops

71. Over the course of six cycles, a total of three Beneficiary Assessments (BAs) were conducted to understand how the pilot was implemented and received by the various stakeholders. The BAs were undertaken through a series of quantitative and qualitative surveys targeting interns and employers. One of the key objectives of the BAs was to track the satisfaction level of interns and employers respectively. The overall satisfaction of the pilot was high, both from interns and from employers. Three BAs were undertaken of Cycle 1, 2 and 4. The satisfaction level of interns rose significantly from 79% in Cycle 1 to 85% in Cycle 2 and similarly for employers from 65% in Cycle 1 to 78% in Cycle 2. For the last BA the satisfaction level was rated differently and 80% of interns rated the pilot good or excellent and 73% of employers. More details are presented in Annex 5.

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4. Assessment of Risk to Development Outcome 72. The risk that development outcomes (or expected outcomes) will not be maintained is rated Moderate. The Government has continued to demonstrate its commitment to increasing the coverage and budget allocations for key initiatives and interventions that specifically affect youth employment, and it is likely that youth employment will remain a key priority for the Government regardless of the outcome of the upcoming 2017 elections. However, as highlighted in the PAD for the Kenya Youth Employment and Opportunities Project — more effort is needed to improve the implementation of youth employment initiatives, evaluate their impact, and increase the successful ones to a scale sufficient to address the full extent of the need. Alongside improvements in implementation and expansion of the reach of youth initiatives, more attention needs to be given to evaluating the impact of these initiatives and adopting an evidence-based approach to youth employment policies. In addition, while the design of the new project builds on the experience of the KYEP, political, institutional, and fiduciary risks stand out as risks to achieving the development objectives of the new operation. The KYEP Project, which aimed to support the government’s efforts to improve youth employability and increase employment rates six months after completion of the internship, indicates that employability of youth was indeed improved. This seems to suggest that the risk of not maintaining the outcome is low. Even if exogenous factors, such as an economic downturn, may still pose a risk to sustained outcomes (although it can be argued that their employability is still improved) the internships were generally in service sectors of the economy that are likely to continue to be needed regardless of an economic downturn. The overall risk is therefore considered to be Moderate.

5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry 73. This evaluation rates the quality at entry as Satisfactory. As discussed in Section 2.1, the Project design was relevant to the Government’s strategy and the objectives of the CAS. The design benefitted from the findings of the KPIA. The World Bank team applied the lessons drawn from implementation of World Bank-financed projects in Kenya, as well as lessons from relevant projects in other parts of the world. The team considered a number of options during preparation, which were well justified in the PAD (paragraph 27). The team ensured a participatory approach during project preparation at different levels of government, as well as with DPs involved in the area of youth training and employment. The team contributed a wealth of international experience in informing public works schemes and training of youth. Not only did the Project design drew on lessons from the existing KKV, but also sought to build on and strengthen that existing program. However, the team did not adequately recognize the risk of expanding such a complex program, leading to difficulties. It is also worth noting that there was a lack of ownership from the Government throughout project implementation for Component 2, implemented by KEPSA, and it is possible that more could have been done, at the design stage, to establish

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mitigation measures against the risk of a lack of government ownership. Moreover, as discussed earlier, the risks related to a lack of capacity within OPM to coordinate and implement Component 1 should have been rated higher, and the mitigation measures should have been stronger. (b) Quality of Supervision 74. The ICR team rates the quality of supervision as Satisfactory. A field-based World Bank team supported by headquarters-based staff and consultants provided regular monitoring of implementation, which was able to identify issues and help put solutions in place in a timely fashion. This regular monitoring was complemented by regular implementation support missions, which took place twice a year and included a review of implementation (Adams, 2013) to inform necessary adjustments to the pilot and to inform future programming. At the beginning of the Project the task team leader (TTL) was based in Washington D.C, but this was changed as soon as the option of a TTL based in Kenya became feasible. This also meant that the World Bank team was able to engage more regularly with the Government when issues arose regarding complexities and challenges affecting implementation. The team reacted timely and appropriately to issues raised on the implementation of Component 1 and cancelled all the funds allocated to that component, for reasons discussed elsewhere in this document. The team engaged with KEPSA to identify bottlenecks related to the engagement of training providers and the need to accelerate implementation of the cycles. The team also attempted to increase government engagement and ownership by ensuring involvement of the Government in key decision making and encouraging increased participation of youth officers in the implementation of the pilot. The team also showed flexibility in agreeing to make changes to the training program for youth based on implementation experience. The TTL who was responsible for processing the Project for approval continued as TTL for nearly two years after credit effectiveness. Thereafter, three other TTLs, who had been active members of the project’s teams took over the role of TTL, ensuring continuity and a smooth transition. The quality of the aide memoires was good, and the skill mix was appropriate. 75. Procurement and financial management were well managed throughout the life of the Project. Both financial management and procurement issues were identified in a timely manner, and the World Bank team provided assistance to the counterparts on ways to resolved them or by taking more drastic measures, such as the cancellation of Component 1. Management of safeguards policies was a particular focus of the Project team during the first years of implementation of Component 1. c) Justification of Rating for Overall Bank Performance 76. Overall Bank performance is rated Satisfactory taking into account the ratings of Satisfactory on both ensuring quality at entry and supervision.

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5.2 Borrower Performance (a) Government Performance 77. The government’s performance during preparation was Satisfactory. As noted in paragraph 36, the government’s commitment and ownership of the Project was evident from the level of involvement, primarily by the OPM, during the preparation stage and the participation in all aspects of its design. It should be noted, however, that the Government could have done more during project preparation to ensure that adequate arrangements were in place to enable strong government ownership of Component 2, which was implemented by KEPSA. Prior to project design and preparation, MoYAS had been established (2005) to address youth concerns in Kenya. Several important youth-related programs such as vocational training through youth polytechnics and the YEDF had been introduced, which demonstrated the government’s commitment to addressing youth issues. Youth and jobs were recurring themes in every plan drawn up by the Government. In March 2008, MoYAS prepared a “Marshall Plan for Youth Employment and Development,” aimed at the creation of immediate and medium-term employment opportunities for youth through socioeconomic programs. The plan proposed six immediate measures, of which four aimed to engage youth in labor-intensive work programs.

78. The Government’s performance during implementation is rated Moderately Satisfactory. There were challenges with the implementation of Component 1 (paragraph 36) and government performance prior to the first restructuring was not satisfactory. However, after the first restructuring, MoYAS took over leadership and oversight of the Project and managed to coordinate input for preparation of IFRs, withdrawal applications, and transfer of funds to KEPSA (although with occasional delays). During implementation, several government reorganizations caused responsibility for youth affairs to be shifted from one ministry to another, resulting in slower progress than expected in the implementation of Component 3. As a result of the ministerial restructuring, following the March 2013 elections, there was a further reduction in the number of ministries to comply with the 2010 Constitution, a process that affected MoYAS. The Department of Youth Development and the National Youth Service were moved to the new Ministry of Planning and Devolution, and the uncertainty that surrounded this process affected implementation of a number of activities under Component 3. However, the Government was successful at sensitizing youth participating in the training and internship pilot (Component 2), and youth officers played an important role in supporting youth during the internship application process. In addition, as mentioned earlier, the Government exceeded its goal for capacity building of youth development officers, but was not successful at utilizing resources to conduct policy studies.

(b) Implementing Agency or Agencies Performance 79. Performance of the implementing agency is rated Highly Satisfactory. Overall, KEPSA managed to implement the project in a highly successful manner, despite the fact that the organization had never implemented a similar program before and faced many

27

challenges during implementation. Staff involved in the implementation of the pilot was not only skilled, but very dedicated to its success. KEPSA also clearly demonstrated its ability to learn and adapt throughout implementation and to respond to changing needs, including adjustments to increase KEPSA’s implementing capacity. (c) Justification of Rating for Overall Borrower Performance 80. On balance, considering the history of the Government’s commitment and support prior to Project approval, its Moderately Satisfactory performance during implementation, and KEPSA’s Highly Satisfactory performance, the overall rating for the Government’s performance is Satisfactory.

6. Lessons Learned

81. The following are the key lessons learned:

• Encourage and promote public-private partnership, while ensuring government ownership. The Government plays a key role in setting the policy agenda and providing oversight and leadership. The private sector places a strong emphasis on getting results to deliver youth employment services and is responsive and able to adapt quickly to changing market needs. The private sector can also add credibility to incentivize employers to join an internship program. It is however very important to ensure that there is adequate government leadership and ownership to ensure sustainability.

• Emphasize the importance of life skills training. The life skills training built the confidence and self-awareness of youth and was highly valued by youth and employers. This is consistent with findings from international literature and studies of non-cognitive behavioral skills and their importance in the work place. The impact evaluation highlighted the importance of combining life skills training with on-the job training to effectively improve the employability of youth. To further strengthen life skills, counseling services should be offered throughout the training and internship program. This will go a long way in helping the youth stay on course as they develop increased understanding of themselves and increased ability to cope with various challenges in different contexts.

• Establish transparent and clear targeting. Effectively targeting the most vulnerable youth justifies investment in these types of programs. Clear and transparent targeting is also key to avoid elite capture in youth access to the training and internships. The KYEP used a transparent selection process through a lottery approach, which was seen as transparent and fair and which lent credibility to the KYEP among youth.

• Ensure solid analysis of gender-barriers for skills development. An action plan to design gender-smart approaches to address gender-barriers for skills development is important. To ensure gender parity, the gender assessment suggested a stronger focus on the use of promotional material to encourage more female participation and inclusion of gender-sensitive career guidance, counseling,

28

and the conducting of gender-friendly due diligence on companies proving internships.

• Ensure adequate implementation capacity. It is evident from the pilot that a project of this nature is labor intensive and requires dedicated and skilled staff to ensure success. Despite a specific PMU set up in KEPSA with skilled staff, there were capacity constraints, particularly with respect to the internship program, due to the intensity of the process of identifying youth and thereafter matching them with the right employer. This was addressed in the first restructuring by including more dedicated staff for project implementation. It is important not only to have fully dedicated staff for implementation, but to ensure the right skills sets for the different positions. Equally, there were issues of implementation capacity for implementation of Component 3, partially related to the numerous ministerial reorganizations during the life of the Project.

• Engage employers in defining the competencies taught by training institutions. The recurring complaint of employers was that the skills of the youth did not match the requirements of available jobs. It is important to provide incentives for employers to work with training providers to more efficiently address the employment challenges of at-risk youth.

• Create linkages to business development services for increased impact. The impact of the training and internship could be increased by connecting those who want to start their own business with financing and business development services. At the design stage the assumption was made that KYEP would develop partnerships with existing programs providing such services in Kenya, but this did not materialize. The new youth operation includes this linkage and provides start-up financing for youth.

7. Comments on Issues Raised by Borrower and Implementing Agency 82. Comments provided by the Government and the Implementing Agency were incorporated into the final report. In addition, Government’s and the Implementing Agency’s contributions are included in Annex 7.

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Annex 1 - Project Costs and Financing

(a) Project Cost by Component (in US$ million equivalent)

Components Appraisal Estimate

(US$ millions)

Actual/Latest Estimate

(US$ millions)

Percentage of Appraisal

1. Labor Intensive Works and Social Services

42.10 0.0029 0%

2. Private Sector Internship and Training

15.00 14.70 98%

3. Capacity Building and Policy Development

1.50 1.00 67%

Total Baseline Cost 58.60 15.7030 100%

Contingencies 1.40

Total Project Costs 60.0031 15.7032 92%

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal Estimate

(US$ millions)

Actual/Latest Estimate

(US$ millions)

Percentage of Appraisal

Borrower 85.00 0 0%

International Development Association (IDA)

60.0033 15.70 92%

29 This figure does not include the actual amount disbursed under this component as the disbursed amount was repaid by the Government (US$9.3 million) to the Bank when the component was cancelled. US$42.97 million equivalent was cancelled. 30 The actual estimate is compared with total initial project costs minus the repaid amount. 31 This is the total original IDA commitment, but component 1 was cancelled. 32 The revised Credit amount was US$17.03 after the cancellation of US$42.97 million. 33 See footnote 32.

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Annex 2 – Outputs by Component and Dropped Results Indicators 1. The KYEP was launched in 2010 and implemented in partnership with KEPSA. The KYEP was initially coordinated by the OPM, in which a PCU was established to oversee and coordinate project implementation, including the involvement of government ministries. 2. In November 2011, the Project was restructured and Component 1 was cancelled. As a result of this cancellation, overall coordination of the Project was transferred to MoYAS. 3. Component 1: Labor-Intensive Works and Social Services (cancelled November 2011). Component 1 was overseen by the OPM and implemented by six line ministries, namely, the Ministry of Water and Irrigation; Ministry of Regional Development Authorities; Ministry of Roads; Ministry of Forestry and Wildlife; Ministry of Environment and Mineral Resources; and the Ministry of Local Government. The objective of this component was to employ rural and urban youth in labor-intensive public works projects and in so doing, support the Government’s efforts to reduce the vulnerability of unemployed male and female youth. Expected outputs:

• Increased access to job opportunities and income support to unemployed male and female youth;

• Improved access to basic infrastructure that is correctly built or maintained, and services that are well delivered; and

• Enhanced capacity of the selected unemployed male and female youth who participated in the program.

4. There were challenges experienced during implementation of Component 1, mainly due to the complexity of dealing with six different ministries and the fact that the OPM was newly created and largely staffed by people recruited from outside of government. Therefore, staff were not fully informed of policies, procedures, regulations, and systems in government. As a result the component was cancelled, and the overall project coordination role was transferred from the OPM to MOYAS. 5. Component 2: Private Sector Training and Internships. This component addressed the lack of skills and work experience among unemployed male and female youth. The objective of this component was to improve youth employability by providing unemployed youth with relevant skills and internships in the private sector (formal and informal sectors). The program was implemented by KEPSA in Nairobi, Mombasa, and Kisumu through private sector trainers and employers. It was implemented in cycles of six months split into two parts: three months of training followed by three months of workplace experience. During the internship period, youth received a stipend of KSh 6,000, while employers received KSh 3,000 as compensation for productivity lost.

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6. At project restructuring, and based on the experience of implementation of Cycle 1, an additional US$40,000 was added to the training budget of this component to support a second round of training for master craftsmen. The need for enhanced capacity within the PCU, lead to the employment of a Project Officer to manage the project in Kisumu. An Office Assistant and Internship Assistant were also employed to work at the PCU in Nairobi. The estimated cost of these three positions was US$180,000. Additionally, KEPSA received an increased management and administrative fee estimated at US$202,000 over the life of the Project. Expected outputs: 7. The youth, who successfully complete the program would:

• get employment by their internship employer,

• get employed elsewhere, and/or

• start their own business or go for further studies. Achieved outputs: 8. According to the project tracer surveys, the project was successful at improving the average overall employment rate of its participants: 75 percent of participants secured employment within six months of completing the internship. The Project exceeded the set target of 50 percent employment. 9. Additionally, with each subsequent cycle, there was an increase observed in the proportion of the interns completing the program and being employed immediately after their internship completion. This happened at an average of 52 percent employment between Cycles 1 and 6, against the set target of 30 percent for years 1 and 2 and 35 percent in years 3 and 4 of the Project. 10. The impact evaluation that was carried out on participants 14 months after completion of the internship revealed that 80 percent of young men reported that they were in paid work compared to 69 percent in the control group, which reflected a 10.8 percentage point gain. This gain increased to 14.2 percent for those completing the full training program. Among young women, there was a 6.7 percent increase in employment and an 8.7 percent increase for those who completed the full program. 11. According to beneficiary assessments conducted for Cycles 1, 2, and 4, the majority of the youth participating in the training and internships expressed satisfaction with the program, with the percentage in Cycle 4 reaching 86 percent satisfaction compared to 79 percent in Cycle 1 and 85 percent in Cycle 2. The beneficiary assessments also revealed that employers’ satisfaction with the program rose steadily, from 64 percent in Cycle 1 to78 percent in Cycle 2 and 84 percent in Cycle 4. However, the overall satisfaction rate among youth and employers participating in Component 2 fell slightly below the 95 percent target.

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12. With regard to the project outputs set, the Project succeeded at exceeding its targets for training and internships. The initial target of 10,000 youth participating was exceeded with 13,305 (6,542 female) completing the training and internships. The targeted number of weeks of training and internships was also exceeded. In addition, the total of 19,532 (9,235 female) youth who successfully completed the life skills training exceeded the set target of 15,000 youth. However, with regard to internship completion, the rate of 85 percent fell slightly below the target of 95 percent. 13. Component 3: Capacity Building and Policy Development. This component provided institutional capacity building and policy development support to MoYAS to be achieved through the following: Expected outputs:

• Training of youth development officers (YDO),

• Social audits focused on implementation of the Project,

• Support to the National Youth Council to (i) register all youth groups and youth-focused, community-based organizations; (ii) promote and popularize the national youth policy and other policies that affect youth; (iii) facilitate the periodic review of the national youth policy in line with other government policy statements; (iv) mobilize resources to support and fund youth programs and activities; and (v) lobby for legislation on issues affecting youth, and

• Conduct of studies on youth issues. 14. At the first restructuring of the Project, it was recognized that the enhanced role of MoYAS would require additional monitoring and coordination activities. Therefore, the budget of the component was increased by US$50,000 to cover the cost of field visits to monitor program activities. Furthermore, it was decided that the budget of US$58,400 for the development of the KYEP Communication Strategy would be shifted from MoYAS to KEPSA, while the remaining communication budget of US$87,100 would stay with MoYAS. With the cancellation of Component 1, the communication activities for Component 1, at a cost of US$39,000, were no longer needed and the portion of the budget allocated to this was reallocated to other activities. MoYAS assumed the responsibility of working with KEPSA to report the program’s progress and accomplishments. It, therefore, retained 37.5 percent of the Component 1 budget and US$58,700 was added to MoYAS’s communication budget of US$87,100. Since KEPSA would share MoYAS’s responsibility for keeping the public informed about implementation progress and outcomes, some of the activities planned for Component 1 were reallocated to KEPSA. Similarly KEPSA received 37.5 percent of the Component 1 budget and US$58,700 was added to its existing communications budget of US$58,400. Achieved outputs: 15. Component 3 was successful at preparing a communication strategy with clear definition and separation of communication roles and activities for each of the implementing agencies.

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16. A training needs assessment was conducted in the early stages of implementation, resulting in the development of a training curriculum. A critical mass of officers was trained to provide support on the ground in terms of monitoring and building awareness among youth about the Project. There was also successful sensitization and capacity building of the officers on KYEP activities. As a result, the officers had a better understanding of KYEP activities, the target group, and eligibility criteria. The officers monitored and prepared reports for MoYAS, which ultimately helped KEPSA to improve implementation processes. 17. Component 3 was also able to mobilize youth to participate in the program with wider publicity of the KYEP. Stakeholders developed a better understanding of the KYEP activities and target group. More applications were received as the cycles progressed, and among them fewer ineligible applications were submitted. 18. A value-for-money audit was conducted, which helped MoYAS and the National Treasury gain further understanding of the project. KEPSA used the audit’s feedback to strengthen the KYEP’s internal controls, and some of the recommendations of the audit were used to inform the design of the new project. 19. Support to the National Youth Council was provided through government funds. No financial resources were used from the Project. 20. Unfortunately, no analytical work was conducted related to youth issues. One reason was that MoYAS underwent several reorganization processes, which are discussed in more detail in the main text.

21. The following tables include the two original PDO indicators that were dropped during the first restructuring. Since activities under Component 1 had not properly commenced at the time of the first restructuring, no progress had been made on achieving concrete results.

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a) Original PDO Indicators that were dropped

Indicator Baseline Value Original Target Values

Revised Targets

Actual Value Achieved

Indicator 1 : (Original) Number of additional KKV beneficiaries

Value quantitative or Qualitative)

0 at least 190,000 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 2 : (Original) Number of additional person days provided in KKV public works

Value quantitative or Qualitative)

0 at least 10,000,000

0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

b) Original Intermediate Indicators that were dropped

Indicator Baseline Value Original Targets

Revised Targets

Actual Value Achieved

Indicator 1 : (Original) Share of female participation (as a share of total KKV participants)

Value (quantitative or Qualitative)

25% 40% 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 2 : (Original) Percentage of total costs going to wage bills (in all KKV projects)


50% 70% 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 3 : (Original) Percentage of participants receiving skill training (as a share of additional participants only)


N/A 10% N/A N/A

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 4 : (Original) Number of assets to be created/rehabilitated or maintained


0 At least 1,000 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

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Indicator 5 : (Original) Percentage of beneficiaries reporting satisfaction with newly created or rehabilitated infrastructure.


N/A 80% N/A N/A

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 6 : (Original) Percentage of participants reporting satisfaction with, or benefiting from, employment experience and training.


N/A 80% N/A N/A

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 7 : (Original) Number of quarterly reports produced by the KKV MIS according to the agreed reporting standards.


0 16 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

Indicator 8: (Original) Number of pilot on social audits finalized


0 20 0 0

Date achieved 05/05/2010 05/05/2010 11/01/2012 02/28/2016

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Annex 3 - Economic and Financial Analysis

1. There was no economic analysis done at project appraisal to estimate expected impacts from Component 2. The analysis was done during project preparation to design the monitoring and evaluation (M&E) system and select key performance indicators for the results framework built on international evidence on the effectiveness of similar training and internship programs around the developing world, mostly from Latin America. Target values were set with the expectation that at least half of the trainees would be employed and that the benefits would be sustained for at least six months after internship completion. 2. To quantify the benefits of Component 2, the analysis relied on average (or median) monthly salaries (from wage work or self-employment activities) reported by beneficiaries six months after program completion through tracer interviews.34 In the absence of a proper counterfactual for all cycles, the analysis looked at the average monthly income among those beneficiaries who were not working before starting the program, who had zero income from labor from the beginning, and assumed that what they had earned by program completion provided a monetary measure of program benefits. To minimize attribution problems, the analysis was restricted to beneficiaries who completed the full program, across all its components. Self-employment earnings could confidently be attributed to the program as all respondents who started their own businesses (35 percent on average) reported that the skills imparted during the program and the savings from KYEP stipends were critical factors in building the businesses’ starting capital. Conversely, not all wage workers were retained by their internship employers; nonetheless, there are good reasons to assume that the monthly salaries wage workers were earning were attributable to the program and were the result of the skills acquired and the increased probability of being employed gained through the program. 3. On the cost side, the analysis took into account cycle-specific service delivery costs (training providers fees, intern stipends, and employer compensation); the overall recurrent administrative costs (including consultancies 35 and staff and operating costs 36 ); and noncurrent assets. 37 To estimate unit cost per beneficiary, the analysis also relied on administrative data on beneficiaries’ attendance of each program component monitored through the program management information system developed in KEPSA through the program. Overall, project costs were in line with what was estimated at appraisal and all targets, in terms of percentage of beneficiaries employed, were met.

34 With the exception of Cycles 2 and 6, beneficiaries who were interviewed one year and one month after program completion respectively. Tracer interviews were conducted on the phone by KEPSA. 35 Impact evaluation, beneficiary assessment, and other short-term consultancies (procurement, M&E, finance consultants). 36 Operating costs include staff costs, KEPSA management fees, employer/intern event costs, transport, monitoring costs, communications, printing and stationery, capacity building, bank charges, external audit, etc. 37 Fixed assets such as furniture, computers, office equipment, and machines, and costs associated with the management information system.

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4. Indirect benefits and costs were not factored into the analysis. However, it has to be noted that the time spent in classroom-based training provided by the program had an opportunity cost for beneficiaries, and that the program may have generated displacement effects (although likely very small) in the Nairobi and Mombasa labor markets on non-participants. Similarly, the benefits do not take into account the non-monetary benefits of having a job in a private firm through the internship and the employer’s benefits stemming from receiving free labor for three months. 5. Table 1 below shows the unit costs of the different program components and the overall administrative costs per participant (not per applicant). The unit costs already factor in output results in terms of beneficiaries reached and services delivered. Unit costs are calculated based on the number of beneficiaries attending at least one day of training and internship, and administrative unit costs are calculated conservatively based on the number of beneficiaries attending at least one day of life skills training.38 Overall, recurrent and non-recurrent administrative costs have been equally split across the six cycles, although most of those expenditures occurred during the first two cycles of the program. The table shows the unit costs with and without administrative costs by cycle. The decreasing unit cost over cycles is a signal of efficiency, given the equal amount of administrative costs as more beneficiaries were reached, completed the program, were employed and earned income after program completion for similar service delivery costs (without administrative costs). The trend in costs also reflects program adaptation over time, for example, the removal of sector-specific training. Overall, the cost per participant in Cycle 6 is KSh 72,400 and average monthly earnings six months after the program is KSh 14,000. Assuming that beneficiary graduates have been earning the same average monthly income for the six months between graduation from the program and being interviewed, and assuming a 10 percent discount per year, the overall benefits accrued to beneficiaries is KSh 84,000. 6. The cost-benefit ratios, measuring the cost effectiveness of the program, have been decreasing over time, meaning that resources were invested more efficiently as the program developed and lessons were learned from previous cycles. Cost-benefit ratios were larger than 1 for the first four cycles, equaled 1 in Cycle 5, and stood at 0.9 in Cycle 6, indicating that the benefits already offset costs six months after beneficiaries graduated for the last two cycles, when the program reached its maturity. Under the assumption that earnings persisted for one year after the program, the program costs were fully recovered and benefits were in fact almost twice as much as the costs. 7. Results are consistent and very similar when measuring benefits using the impacts estimated through the impact evaluation of Cycle 2. The experimental impact evaluation allowed for more rigorous quantification of program benefits, defined as the difference in earnings between beneficiaries and a randomly selected counterfactual (youth with identical observable and non-observable characteristics, except from participation in the program). Experimental impact evaluations provide a much more precise estimate of

38 Not the number of applicants (which required screening and monitoring), which would lower down-unit costs.

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benefits without making too many assumptions, but were only conducted for Cycle 2 beneficiaries. Impact estimates on monthly earnings for men showed earnings that are KSh 6,700 higher than for program non-participants (for a total of about KSh 25,000 per month), which implies that it took about 15 months to offset the unit cost of Cycle 2 (a cost-benefit ratio equal to one). We can conclude that the benefits of the program exceeded the costs after 15 months from program completion for Cycle 2 beneficiaries, should earnings persist longer. The tracer study collecting data for Cycle 2 beneficiaries confirmed that average monthly earnings 24 months after training is KSh 20,200 among participants.39

39 However, we do not know how much earnings were in the control group to confirm whether the program’s impact persists.

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Table 1. Cost-Benefit Ratios (Component 2)

COST PER BENEFICIARY

Training Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Cycle 6

Life skills training 8,029 7,208 7,551 6,787 9,276 7,837

Core business training 13,240 12,616 12,290 10,039 9,404 9,435

Entrepreneurship 5,658 5,872 6,125 5,614 5,672 5,348

Sector-specific skills training 18,945 14,933 13,223

Internships 42,828 35,900 38,320 48,578 48,325 43,733

Total unit costs per participant (without admin costs) 69,755 80,541 79,219 84,242 72,677 66,353

Admin costs (consultancies, operating costs, and noncurrent assets)

37,772 20,705 18,273 14,064 8,138 6,048

Total unit costs per participant (including admin costs) 107,527 101,246 97,493 98,306 80,815 72,401

BENEFIT PER BENEFICIARY

Median monthly income* (all) 10,000 11,900 10,000 10,000 12,000 10,500

Average monthly income* (all) 14,130 17,196 12,617 13,336 14,112 14,013

Average income six months after 80,742 98,262 72,095 76,205 80,639 80,077

Average income one year after (assumption) 154,145 187,592 137,635 145,482 153,948 152,874

Cost benefit ratios six months after program completion 1.33 1.03 1.35 1.29 1.00 0.90

Cost benefit ratios one year after program completion (assumption) 0.77 0.54 0.71 0.68 0.52 0.47

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Annex 4 - Bank Lending and Implementation Support/Supervision Processes

(a) Task Team Members

Names Title Unit

Lending

Arvil Van Adams Consultant GSP01

Henry Amena Amuguni Senior Financial Management Specialist GGO31

Noreen Beg Senior Environmental Specialist GEN04

Yasser Aabdel-Aleem Awny El-Gammal

Practice Manager GSP05

Randa G. El-Rashidi Social Protection Specialist GSP07

Nyambura Githagui Lead Social Development Specialist GSURR

Michael Mills Lead Economist AFTHE - HIS

Maddalena Honorati Senior Economist GSPGL

Emma S. Mistiaen Social Protection Specialist GSP01

Joel Buku Munyori Senior Procurement Specialist GGO01

Lucy Anyango Musira Program Assistant AFCE2

Nightingale Rukuba-Ngaiza

Senior Counsel LEGLE

Shobhana Sosale Senior Operations Officer GED07

Kalanidhi Subbarao Consultant GSP05

Asa Britta Torkelsson Senior Gender Specialist PRMGE - HIS

Marc Van Imschoot Consultant AFTSE - HIS

Supervision/ICR

Arvil Van Adams Consultant GSP01

Sarah Coll-Black Senior Social Protection Specialist GSP01

Maddalena Honorati Senior Economist GSPGL

Henry Amena Amuguni Senior Financial Management Specialist GGO31

Noreen Beg Senior Environmental Specialist GEN04

Emma S. Mistiaen Social Protection Specialist GSP01

Joel Buku Munyori Senior Procurement Specialist GGO01

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Lucy Anyango Musira Program Assistant AFCE2

William David Wiseman Program Leader LCC1C

Betty Hanan ICR Consultant GSP01

Joyce Cheruto Bett Program Assistant AFCE2

Kendi Martina Mbijjewe Temporary AFCE2

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks US$ thousands (including travel and consultant costs)

Lending 140.7 761,159

Supervision/ICR 348.62 1,603,011

Total: 489.32 2,559,392

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Annex 5 - Beneficiary Survey Results 1. Over the course of six cycles, three Beneficiary Assessments (BA) were conducted to understand how the program was implemented and received by the various stakeholders. The BAs were undertaken through a series of quantitative and qualitative surveys targeting the interns and employers involved in the program. The quantitative approach involved the administration of questionnaires, while the qualitative approach involved focus group discussions (FDC) and in-depth interviews of a sample group. The sample groups were picked using stratified random sampling to ensure a proportionate representation of each sector among interns and internship providers alike. This method of assessment was consistent for all three reports. The initial two reports, produced for Cycles 1 and 2, were conducted by the independent firm VAS Consultants Ltd., while the third report, produced for the participants of Cycle 4, was conducted by the African Institute for Health and Development (AIHD). 2. Specifically, the BAs sought to answer questions about (i) the expected impact of the program; (ii) how the program would contribute to the attainment of wage or self-employment; (iii) the quality of learning content; (iv) the reasons for dropouts; and (v) if the interventions occurred as planned. They also sought to identify what aspects of the program had the biggest and least impact. 3. The first four cycles lasted six months, of which three were spent on training: Life Skills Training (LST), Core Business Training (CBT), Entrepreneurship Skills Training (EST), and Sector-Specific Training (SST). The final three months were allocated to gaining practical experience in the workplace. The fifth and sixth cycles lasted nearly eight months as one week was added to LST and one month to work experience. 4. Cycle 1 was based solely in Nairobi and ended on February 10, 2012. The BA conducted following this cycle used a sample size of 234 respondents, including participants who completed the program, those who dropped out, and the internship providers. For this cycle, the interns indicated 79 percent overall satisfaction with the program (interns who completed the program recording 80 percent; dropouts recording 76 percent). Internship providers registered a satisfaction level of 64 percent. The BA for Cycle 1 identified specific problems with the CBT element of the program, citing a lack of qualified supervisors and problems in the delivery mechanism. Additionally, there was a shared complaint among interns and employers over the delays by KEPSA with resolving issues raised. In particular, some interns complained that they were placed in sectors in which they had no interest, which led them to drop out of the program prematurely. 5. Cycle 2 was expanded to include Mombasa and ended in April 2013. The BA conducted for this cycle refined the methodology for data collection based on observations from Cycle 1 and, accordingly, expanded the sample size to 388. It registered an overall satisfaction of 85 percent by the interns (interns who completed the program recording 87 percent; dropouts recording 83 percent). This showed an increase in general satisfaction by the interns from Cycle 1. Similarly, internship providers showed increased satisfaction from Cycle 1, with a 78 percent approval rating; 33 percent went so far as to say that the

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KEPSA interns were superior to independent interns demonstrating a stronger work ethic and obedience. The BA for Cycle 2 identified SST as having the least benefit due to the inadequate time allocated to it. 6. Cycle 4 was expanded further to include Kisumu along with Nairobi and Mombasa. It was initiated in March 2013 and ended in December 2013. The sample size for the BA of this cycle was proportionally expanded to 460. Rather than take a general satisfaction rating as with the previous BAs, the BA for Cycle 4 noted that among the participants, including those who completed the program and those who dropped out, 80 percent rated the program as good or excellent. Among internship providers, 75 percent of first time employers and 71 percent of repeat employers also rated the program as good or excellent. As the only BA conducted by AIHD it had a unique outlook and paid special attention to how the project experience varied by gender and the education level of the participants. The report identified a difference in the reasons between the genders for dropping out, most important of which was a lack of funds, contributing to 72 percent of female dropouts, but only 28 percent of male dropouts. 7. The BA for Cycle 4 also identified differences in the way that the program was experienced in the three cities. For example, it was noted that 48 percent of the participants who dropped out in Mombasa did so after the LST, while in Nairobi 67 percent of those who dropped out did so during the work placement experience. Interestingly, Kisumu recorded the lowest dropout rates and also the highest projected employment prospects. On the other hand, Mombasa recorded the highest dropouts and lowest projected employment prospects. Kisumu also recorded the highest overall satisfaction of 91 percent for internship providers, followed by Nairobi with 85 percent, and lastly, Mombasa with 79 percent. 8. Another unique insight that emerged from the BA of Cycle 4 was that those participants with a higher education level prior to the program dropped out at a higher rate to seek immediate employment, while those with a lower level of previous education dropped out when the course became more technical, typically after the LST component. 9. Despite the differences among the BAs, there were many shared observations across the three cycles. For instance, there was a general acknowledgement by the interns who completed the program that they had benefited from the acquisition of skills and work experience. They also indicated that the program had opened new avenues into the job market for them, and many felt they had been provided with the skills to start their own businesses. Across all cycles, the interns credited the LST as being the most beneficial aspect of the program and felt the acquisition of soft skills, including interviewing techniques and how to professionally interact with people, could immediately improve their employment prospects. It is also worth noting that each subsequent BA recorded a higher level of satisfaction by the employers over the quality of the interns they received, indicating that the quality of the training improved with each cycle. 10. A shared complaint across all cycles was the inadequacy of the stipend and delays in payment. Some interns actually dropped out of the program because they did not receive

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their stipends on time and therefore could not afford the cost of transportation. Internship providers also complained about the amount they were paid and delays with receiving payment by KEPSA. 11. Ultimately, the most important insights that came from the three BAs is a collection of recommendations for the improvement of the KYEP program. It was recommended that KEPSA evaluate the capacity of internship and training providers to ensure that participants receive a quality experience. Furthermore, KEPSA should review the adequacy of the stipend and fees paid to interns and internship providers and resolve all issues regarding timely payment. It was suggested that KEPSA provide certificates and recommendation letters to the interns after completion of the program to be used by participants as references when applying for future employment. There should also be a way to keep track of the participants once they have completed the program as a form of post-program support for the youth. Moreover, KEPSA should create a database and link the graduates to potential employers. Similarly, it was recommended that KEPSA link graduates to loan providing institutions to facilitate access to capital for graduates of the program who intend to start their own businesses.

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Annex 6 - Stakeholder Workshop Report and Results

N/A

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Annex 7 - Summary of Borrower's ICR and/or Comments on Draft ICR BACKGROUND 1. In 2010, the Government of Kenya and the World Bank launched the four-year Kenya Youth Empowerment Project, which was funded with a credit of US$60 million. The aim was to address the issue of youth unemployment in Kenya by supporting the government’s efforts to increase access to youth-targeted temporary employment programs and to improve youth employability. The project started in August 2010, but was restructured in November 2012 canceling one component, revising the development objective, and extending the implementation period to February 28, 2016. 2. The project was launched in response to a downturn in the country’s economy, a growing youth population, increasing poverty levels, challenges of high unemployment and underemployment rates, a crisis created in 2008 due to post-election violence, as well as the global financial, food, and fuel crisis being experienced at the time. 3. The original Project Development Objective (PDO) was to support the government’s efforts to increase access to youth targeted temporary employment programs and to improve youth employability. 4. The PDO would be achieved through three components:

• Labor intensive works and social services (US$43 million);

• Private Sector Internships and Training (US$15.5 million); and

• Capacity Building and Policy Development (US$1.5 million). 5. The revised PDO was to support the Government of Kenya’s efforts to improve youth employability. The revised PDO would be achieved through two components:

• Component 1: A private sector-driven Training and Internship Program (US$15.617 million)

• Component 2: Capacity Building and Policy Development (US$1.41 million) 6. While activities in Component 1 remained as initially planned, those in Component 2 changed, with some being dropped and others added and the role expanded to include coordination. IMPLEMENTATION AND RESULTS 7. The Training and Internship Component was a pilot program projected to provide about 10,000 youth with internship and training in the formal and informal sectors. The program was designed in response to the issue raised by employers that many youth transitioning from school or training to work lack the relevant experience and competencies employers seek.

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8. This component aimed to address the key constraints faced by unemployed youth in both demand and supply in the labor market. On the demand side, the program mobilized the private sector to participate in designing the training curriculum, provide on-the-job training and mentorship, and provide relevant work experience. On the supply side, the program aimed to reduce skills constraints by providing youth with job-relevant skills (technical and life skills) and select labor market information services, as well by linking youth to employers for workplace experience. 9. During project implementation, a number of key modifications were made to the initial project:

(i) Implementation locations: The Project would initially be implemented in Nairobi and Mombasa, and a third rural location, Kisumu, was included as the third implementation location.

(ii) Implementation sectors: Each training and internship program cycle was meant

to offer a combination of training and work experience in private sector firms in the six growth sectors identified in Vision 2030, consisting of five formal sectors (energy, finance, ICT, manufacturing, and tourism) and one informal sector (micro and small enterprise). The project also placed interns in other sectors based on demand.

(iii) Implementation Cycles: The Project would be implemented in eight cycles.

However, given the delay with the start of the program, the project was implemented in six cycles.

(iv) Training and Internship delivery: The initial Project design included three

months of training and three months of workplace experience. Given the needs that arose, mentorship sessions and interview skills clinics were introduced. In addition, following a technical assessment conducted in 2014, sector-specific training was dropped and replaced with an extra four weeks of workplace experience and one week of life skills training.

10. Overall, the Project has been able to achieve its PDO of supporting the Government of Kenya’s efforts to improve youth employability as evidenced by an overall average employment rate of 75 percent44 against a planned target of 50 percent of participants securing employment six months after the internship. In addition, there has been an increase observed in the proportion of interns completing the program who were retained or employed immediately after internship completion, with an average of 52 percent against a target of 30 percent to 35 percent.

44 Tracer Surveys: 71 percent in Cycle 1; 75 percent in Cycle 3; 77 percent in Cycle 4; and 76 percent in Cycle 5

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11. An impact evaluation revealed that 14 months after internship completion, 80 percent of young men reported that they had found paid work, compared with 69 percent in the control group, a 10.8 percentage point gain. The gain increased to 14.2 percent for those who completed the full training program. Among young women, there was a 6.7 percent increase in employment for those who were offered internships and an 8.7 percent increase for those who completed the program. 12. Beneficiary assessments revealed that the majority of youth participants were satisfied with the program. The percentage of employers satisfied with the program rose steadily, from a low of 64 percent in Cycle 1 and 78 percent in Cycle 2 to 84 percent by Cycle 4. The overall satisfaction rate among youth and employers participating in the training and internship program fell slightly below the 95 percent target. 13. Overall, the Project has been able to exceed the targets set. The initial target of 10,000 youth has been exceeded with 13,305 youth (6,542 female) completing the training and internship program. The targeted number of weeks of training and internships has also been exceeded as has the number of weeks of life skills training. Additionally, a total of 19,532 youth (9,235 female) successfully completed the life skills training against a target of 15,000. However with regard to completion rates, the actual internship completion rate of 86 percent was slightly below the target of 95 percent.

CHALLENGES 14. The key challenges faced during project implementation were the following: Targeting: It was difficult to ensure that those who participated in the project were truly “vulnerable.” To address this challenge, the following measures were taken:

• The call for youth was modified to ensure clarity with the target group, for example, “Youth not in school (part-time or full-time),” and specifying the duration to which selected youth would need to commit to participate full time in the program.

• Enhancement of the application form to include applicants’ specific engagement at the time of application. This information was then used in further screening for eligibility.

• For selected youth, a detailed orientation was conducted to ensure clear understanding of the project, including what the program would demand of them.

Cultural and religious influence: In Mombasa, it was observed that there were cultural and religious influences that affected youth participation in the program. Clear cases were those where young women’s parents or husbands denied them opportunities to participate in the program. As a result, community representatives including chiefs, elders, football coaches, representatives from the “Nyumba Kumi” initiative, and religious leaders from both the Muslim and Christian fraternity were engaged to create awareness about the project.

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Training delivery: The key challenge encountered was with the management of the multiple contracts to ensure high quality in the six different sector-specific trainings. This was especially challenging in Mombasa and Kisumu where only representatives of the training providers were on site, thus delaying decision making and the implementation of corrective measures slow as the representatives first had to communicate with their head offices in Nairobi. A possible solution would be to engage a single institution or provider with a regional base that could provide the various sector trainings in the specific regions. Internship placement: This was the most labor-intensive exercise during project implementation. Although efforts were made to automate it to some extent, this was not successful owing to the fast-paced nature of the project. The satisfaction of interns and employers also presented a challenge, especially in light of the fact that it was not always possible to perfectly meet the needs of both. To mitigate this challenge, the project offered capacity building during employers’ meetings, with a focus on quality internship delivery.

LESSONS LEARNED 15. The key lessons learned from the project are outlined below: 16. Recruitment and Enrolment: Correct targeting is key for the success of youth employability programs. There is thus a need to have a clearer definition of the eligibility criteria with respect to “unemployed youth.” 17. Delivery of Training: Life skills training has proven to be successful at building confidence and improving communication skills and behavior in the workplace, and hence is key for any youth employability program. On the other hand, training is more relevant when industry players, that is, employers, are engaged in defining the competencies taught by training institutions. Mentorship forums are also important. In addition, there is a need to consider provisions for family-friendly facilities, such as child care facilities for mothers with young children or accommodations for people with disabilities. 18. Delivery of Internships: Like most labor-intensive activities, youth employability projects need to consider capacity issues. In regions with significant cultural and religious influences, there may be a need to involve the community during sensitization exercises since young people tend to have stronger ties with their families and guardians, which influences their decisions. 19. Employer Engagement: It is key for youth employment initiatives to invest in visibility as it gives credibility to the initiative in the eyes of employers. In addition, social, cultural and religious biases affect the willingness of some employers to participate. It is important to come up with strategies to address this issue. Furthermore, the government needs to reconsider the pros and cons of any incentives given to employers and, in particular, their sustainability. 20. Participation of Master Craftsmen: Detailed orientation sessions are important for informal sector employers prior to engaging them so as to ensure that they understand what

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the project is about, what is expected of them, and what they should expect from the project. In addition, capacity building of informal sector employers is useful considering the demands of their operations in terms of time and the desired end goal when placing an intern with them. 21. Monitoring and Evaluation: Adequate capacity and having dedicated staff with the right skills set are key if the project is to ensure timely feedback or lessons learned. To enhance the impact of the program, post-project support should be provided to youth after their successful completion of the program.

EVALUATION OF BORROWER’S OWN PERFORMANCE 22. Commitment to achieving development objectives: The main objective of the KYEP training and internship component was to improve youth employability by providing youth with work experience and skills through the creation of internships and relevant training in the formal and informal sectors. Many youth transitioning from school or training to work lack the relevant work experience and competencies employers seek. The KYEP thus responded to demand and supply issues associated with youth employment. The project exceeded attainment of its initially set development objectives by over 25 percent. 23. Adequacy of beneficiary/stakeholder consultations and involvement: The project ensured regular consultations and involvement with the key project beneficiaries and different stakeholders through:

• Conducting orientation sessions with both the employers and youth/interns during the different phases of the project, creating a forum for communicating with youth as well as gathering feedback from them;

• Online interaction with interns through email and social media; and

• Involvement of former interns in the training curriculum’s review meetings. 24. Employer involvement: Other than providing internship opportunities, employers were involved through (i) quarterly meetings that provided feedback on areas requiring further improvement; (ii) technical review meetings of the training curriculum to ensure that training was responsive to labor market needs; and (iii) provision of mentorship to project interns. 25. Public engagement: The general public through institutions, NGOs, and the media helped create awareness among the general public in an attempt to reach youth in need of the program. 26. Timely resolution of implementation issues: Centralized coordination of project operations and weekly staff meetings ensured timely identification and resolution of implementation issues.

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27. Adequacy of monitoring and evaluation arrangements: Regular monitoring and evaluation allowed the project to produce good quality data for management and evaluation. Tracer studies provided data on key performance indicators. Three Beneficiary Assessments were carried out with samples of youth, employers, and trainers to provide feedback on project implementation, constraints, and interns’ and employers’ satisfaction with the program. In addition, an employer tracer survey was conducted to collect feedback from employers on program implementation, quality of training, and interns’ retention rates. The evaluation of the project merits recognition for being based on a rigorous random experimental design. 28. Relationships and coordination with partners/stakeholders: The project maintained good working relationships with all its key stakeholders and partners. 29. Adequacy of transition arrangements for regular operation of project-supported activities after loan/credit closing: Lessons learned have been shared with relevant government institutions ready for KYEP scale up. Plans have been put in place to utilize private sector employers and the staff who were involved in implementation of the KYEP in the scale up of the program.

CAPACITY BUILDING AND POLICY DEVELOPMENT COMPONENT 30. The following table summarizes the activities planned, tasks carried out, and results achieved. Table of Activities

Activities Tasks carried out Achievements/Results

1. Facilitating release of funds to KEPSA

Requisitioning for funds from the World Bank through the National Treasury to KEPSA and back-flow reporting.

The flow of funds to KEPSA was consistent throughout the project life, except for one quarter when there was a transitional challenge and there was a delay of several months.

Effective implementation of the training and internships program under KEPSA.

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2. Coordinating government stakeholders to participate in the implementation of the KYEP

Coordinated the formation of a KYEP National Steering Committee with membership drawn from line ministries, the National Treasury, KEPSA, and the Nairobi County government. The launch meeting was held on February 27, 2014.

Coordinated government stakeholders to participate in events jointly organized by the project teams at KEPSA, the World Bank, and MoYAS to mark key milestones in implementation of the training and internships program.

Organized government officer’s sensitization forums (meetings and workshops) in Nairobi, Mombasa, and Kisumu counties and attended by youth development officers, social development officers, and representatives from government-owned training institutions.

Public sensitization forums through the media –

Ministry of Devolution and Planning - KYEP staff

participated in radio talk organized by KEPSA

Random selection of youth at the beginning of every cycle - Government witnesses would include the National Treasury, Kenya National Audit Office, Betting Control and Licensing Board, line Ministries, and the ministry responsible for youth affairs. Other witnesses would include selected youth, representatives from the KEPSA board, all members of the KYEP team at the ministry and KEPSA, and several media houses.

Roll out ceremonies at the beginning of each cycle. For example, the Cycle 5 roll out ceremony was held on April 4, 2014 at the Kabete Technical Training Institute. Government witnesses included the National Treasury, Kenya National Audit Office, line ministries, the National Youth Council, the National Youth Service, representatives from the county government, youth development officers, and representatives from the ministry responsible for youth affairs. The Principal Secretary responsible for youth affairs was the chief guest. Similar ceremonies were held in Mombasa and Kisumu counties on April 9 and April 14, 2014 respectively.

Orientation ceremonies in Nairobi, Mombasa, and Kisumu counties at the beginning of every cycle, at the end of the core trainings (LST and CBST), and before the start of the workplace experience in each cycle.

KYEP publicity enhanced and ownership created

Effectiveness in implementation of the project enhanced

Ownership of KYEP by the government enhanced

Team work among project teams enhanced

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Graduation ceremonies at the end of training activities in each cycle. For example, the Cycle 5 life skills graduation ceremony for participants within Nairobi county was held on May 23, 2014 at the Kasarani Gymnasium. This was combined with the issuance of certificates to graduates of Cycles 3 and 4 within the county. Over 6,500 youth participated. The Cabinet Secretary responsible for youth affairs was the chief guest and was escorted by senior government officers.

Several formal and informal employers meetings at the beginning and end of each cycle in Nairobi and Kisumu counties and were attended by youth development officers and both KYEP teams in each location. During these forums, employers would be informed of progress in the implementation of KYEP, as well as the results being achieved, including the findings of the impact evaluation.

World Bank-sponsored workshop on April 21, 2015 at the Sarova Panafric Hotel to disseminate results on the impact evaluation of the training and internships program. Government participants included YDOs from Nairobi County and headquarters; representatives from the Internal Auditor General’s Office, line ministries (Labour, Education and Industrialization).

Coordinated government stakeholders to participate in World Bank-organized KYEP support missions. The Principal Secretary in charge of youth affairs or their representatives always chaired the kick-off and wrap-up meetings.

3. Development of a KYEP communication strategy

Individual consultant procured through a competitive and consultative process bringing together youth, youth development officers, KEPSA, OPM, and the ministry responsible for youth affairs.

Communication strategy developed

Clear definition and separation of communication roles and activities for each of the implementing agencies

4. Social audit of Component 1

Consultant procured through a competitive and consultative process bringing together youth, youth development officers, KEPSA, OPM, and the ministry responsible for youth affairs.

Social audit tools developed

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Contract was

cancelled following

the cancellation of

Component 1.

5. Sensitization of district YDOs on KYEP activities

Coordinated YDOs to attend regional sensitization workshops that were organized by the Office of the Prime Minister. A total of eight workshops were held.

Coordinated government officers, including YDOs and social development officers, to attend sensitization meetings held at least two weeks before the start of each cycle in the three project sites. Other participants would include local faith-based and community-based organizations.

A wider population of stakeholders informed about KYEP

YDOs had a better understanding of KYEP activities, the target group, and eligibility criteria

YDOs had a better understanding and effectively played their roles in the implementation of Components 1 and 2.

6. Mobilize youth to participate in Components 1 and 2

YDOs at the sub-county level sensitized communities at their areas of jurisdiction and mobilized youth to apply.

The KYEP teams at KEPSA and MoYAS also jointly held radio talk shows with local stations.

This was done at least two weeks before the start of each cycle.

Upon placing the call for youth in the media, YDOs issued and received application forms from youth and submitted them to KEPSA.

Wider publicity of the KYEP

Stakeholders developed a better understanding of KYEP activities and the target group

More applications received as the cycles progressed

Fewer ineligible applications received as the cycles progressed

7. Build the capacities of YDOs to monitor and report on participation of youth in Components 1 and 2

Workshops held in Nairobi, Mombasa and Kisumu counties with participants as follows:

YDOs, social development officers, officers in charge of youth affairs in the county governments, and representatives from the National Youth Council in the three project sites at least two weeks before the start of each cycle.

Wider publicity of the KYEP

YDOs monitored and reported on the implementation of activities under the training and internships program in each cycle

Feedback from the reports was relayed

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to KEPSA and used to improve implementation of the KYEP

8. YDOs monitoring and reporting on participation of youth in Components 1 and 2

YDOs helped youth and communities in their areas of jurisdiction identify and write proposals on suitable subprojects to be funded under Component 1. The YDOs later participated in carrying out due diligence on approved subprojects.

YDOs did spot checks of training and internship activities and produced reports.

The KYEP supported the officers by meeting the costs of transport and lunch while monitoring activities and airtime during the mobilization of youth.

Viable subprojects were identified. (Component was later cancelled)

Feedback from the reports was passed on to KEPSA and used to improve on the implementation of follow-up activities.

9. Training needs assessment (TNA) for YDOs

Individual consultant procured through a competitive and consultative process

A report on the TNA of officers was produced and a training curriculum developed and training provider recommended

10. Training for YDOs and other headquarters staff

A total of 392 officers from across the country were trained in ether senior management or strategic leadership or both courses. Twenty-three were trained in either project design and management or monitoring and evaluation.

Visibility of KYEP increased

A critical mass of officers was developed, some of whom have effectively participated in the preparation of the proposed Kenya Youth Employment and Opportunities Project and many others who are expected to effectively coordinate /monitor the implementation of project activities in their areas of jurisdiction across the country.

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11. Implementation of communication activities

Publicity during forums to mark key milestones

in KYEP implementation

Publicity before start of a cycle

Youth development officers wrote to and visited local NGOs, CBOs, FBOs, Chiefs’ barazas and youth groups to inform them about the KYEP and te forthcoming cycle.

Coordinated government stakeholders to participate in events jointly organized by the project teams at KEPSA, the World Bank, and MoYAS to mark key milestones in implementation of the training and internships program:

• Government officers sensitization forums (meetings and workshops)

• Random selection of youth at the beginning of every cycle

• Roll out ceremonies at the beginning of each cycle

• Graduation ceremonies at the end of training activities in each cycle

• Several formal and informal employers meetings

(See item 2 above for details).

Publicity during forums to mark national and

international events

Coordinated KYEP beneficiaries and staff to participate in forums to mark national and international events. Specifically, the KYEP had beneficiaries exhibiting under branded stands during events as follows:

The Extra Ordinary Youth Employment Summit organized by the International Conference on Great Lakes Region and held on July 19–24, 2014. The summit brought together youth representatives as well as officials from partner states. The forums, chaired by Kenya’s President, were attended by 600 delegates drawn from 12 member countries.

International Youth Week (August 11-12, 2014). The Cabinet Secretary (CS) responsible for youth affairs, who was the chief guest, visited the KYEP stand accompanied by several senior government officers.

National Youth Council conference held on June 4, 2014 which brought together over 4,000 youth representatives from all over the country. KYEP

Visibility and ownership of KYEP enhanced

Those who visited the stands were impressed and keen to learn more about the KYEP

Ownership of KYEP by government enhanced

Team work between project teams enhanced.

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had one large stand. The Deputy President (DP) who was the chief guest visited the stand accompanied by several senior government officials.

Launch of ministry’s strategic plan. The Cabinet Secretary responsible for youth affairs visited the KYEP stand.

The First National Social Protection Week, which was organized by the Ministry of Labour, Social Security and Services, in partnership with: ministries responsible for youth; education; and industrialization, UNICEF, the World Bank, and other development partners was held on January 20-31, 2015. This culminated in a National Social Protection Conference on January 27-31, 2015. The conference was opened by the country’s President.

In all the events/forums, KYEP-branded publicity pamphlets were issued to all visitors to the stands.

Publicity during other forums

Coordinated the formation of a national steering committee with membership drawn from line ministries, the National Treasury, KEPSA, and the Nairobi county government. The launch meeting was held on February 27, 2014.

Coordinated government participants to attend a World Bank-sponsored workshop to disseminate results on the impact evaluation of the training and internships program.

Publicity through the ministry’s weekly e-

Newsletter

The Ministry of Devolution and Planning ran a weekly newsletter to report on activities taking place during the week and the results achieved.

Publicity during the ministry’s annual performance evaluation

The KYEP was one of the activities documented in the ministry’s performance contract with the President. Consequently, the ministry used the results of and evidence from the KYEP to report on annual performance every year. The ministry took the opportunity to tell the evaluators and other government officers present about the KYEP. The results were also discussed at higher levels of government, further enhancing the visibility of the KYEP.

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12. Analytical work on youth employment issues

Supported validation forums for a draft National Youth Empowerment Strategy being developed by the ministry. Specifically, the project will pay for full board accommodation and conference facilities for five two-day regional forums and a one-day national forum bringing together different stakeholders to discuss the strategy.

As part of publicity, KYEP-branded publicity pamphlets and document holders were issued to all the participants.

Report on the validation forums developed

A final strategy has been developed and is awaiting launch

Visibility of KYEP increased

13. Ensuring prudence in project fund utilization

KYEP Component 2 value-for-money audit

As part of the ministry’s mandate to perform an oversight role in the implementation of the training and internships component coordinated by KEPSA, the project supported a value-for-money audit conducted by the office of the Internal Auditor General, from December 2013 to February 2014.

The ministry and the National Treasury gained further understanding of the component.

KEPSA used feedback from the audit to strengthen the KYEP’s internal controls.

Some recommendations from the audit were used to inform the design of the new project

EVALUATION OF BANK’S PERFORMANCE 31. The Government is very grateful to the World Bank for the support provided from the design stage to completion of the project. At the design stage, World Bank team helped the government identify a viable project, which has since proven to be successful and to be popular within the country and the region. At the start of the implementation, World Bank project teams patiently took the project teams through their first steps. Thereafter, the project teams were confident enough to move forward with implementation. 32. All World Bank teams provided valuable and honest support in many ways including one-on-one meetings with teams in each of the implementing agencies; actively participating in KYEP management meetings; providing advice by e-mail or telephone; giving timely responses where advice or a no objection was sought; raising red flags when there was a delay in performance from the government’s side; organizing support missions; providing moral support through participation in forums to mark key milestones in implementation; ensuring the participation of project teams and other staff from support

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functions in capacity-building activities; and, where possible, involving some members of the teams in regional or international knowledge-sharing forums. All the support provided is greatly appreciated.

WAY FORWAD 33. The Government and the World Bank are preparing a proposed Kenya Youth Employment and Opportunities Project (KYEOP), in which the main component will be to scale up the KYEP to reach more counties, including rural settings across the country. As opposed to the KYEP, where the training and internships component was implemented with support of the private sector, the KYEOP will be wholly implemented by the government; using its line ministries, departments, and agencies to implement the scale up. Specifically, the National Industrial Training Authority, jointly with the ministry responsible for youth affairs, will scale up the KYEP. Lessons learned from the KYEP have mostly informed the design of the KYEOP.

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Annex 8 - Comments of Cofinanciers and Other Partners/Stakeholders

N/A

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Annex 9 - List of Supporting Documents

1. Arvil V. Adams, The Kenya Youth Empowerment Project: Lessons from

Implementation for Scaling up, World Bank Consultant, February 26, 2014. 2. Government of Kenya, 2010. Subsidiary Agreement between GoK and KEPSA,

August 13, 2010. 3. Project Progress Reports, 2011–2016. 4. Tracer Surveys Reports for Cycle 1-62012, 2016. 5. Important letters, 2010–2016. 6. Value for Money Audit, 2015. 7. KEPSA response to questions raised by Audit, 2015. 8. Gender Assessment of KYEP, Private Sector Training and Internship Component,

February 2016. 9. Impact Evaluations, 2012–2015. 10. Borrower’s Contribution to ICR, March 2016. 11. International Labor Organization, 2001. Training for Work in the Informal Sector:

Evidence from Kenya, Tanzania and Uganda. 12. Ipsos Ltd., Kenya Youth Empowerment Project: Training & Internship

Programme Impact Evaluation Report, July 2015. 13. M. Honorati, The Impact of Private Sector Internship and Training on Urban

Youth in Kenya, Policy Research Paper 7404, Social Protection and Labor Global Practice Group, World Bank Group, August, 2015.

14. Vindele, Chokera, Gender Assessment of the Kenya Youth Empowerment Project,

Private Sector Training and Internship Component, February 25, 2016.World Bank, 2007. Kenya Country Social Assessment.

15. World Bank, 2009. Kenya Poverty and Inequality Assessment (KPIA), April 2009.

16. Project Concept Note (PCN) July 27,.2009. 17. Minutes of PCN Review Meeting, August 24, 2009. 18. Peer Review Comments on PCN, August 4, 2009. 19. Project Information Document, July 27, 2009. 20. Minutes of Quality Enhancement Review, November 12, 2009. 21. Minutes of Regional Operations Committee Meeting, January 15, 2010, 22. Minutes of Negotiations, February 19, 2010. 23. Project Appraisal Document, March 3, 2010. 24. Integrated Safeguards Datasheet, March 3,2010 25. Financing Agreement, May 20, 2010. 26. Project Agreement, May 20, 2010. 27. Environmental and Social Safeguards Completion Report 2011 28. Trust Fund Agreements, August 30, 2012. 29. Africa Social Protection Strategy 2012-2022: Managing Risks and Promoting

Growth, Developing System for Social Protection in Africa, 2012 30. Project Restructuring Paper, October 19,, 2012 31. Aide Memoires 2008–2016 32. Management and other important letters, 2008–2016 33. Implementation Status and Results Reports (ISRs), 2010–2016

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34. Amendments to Financing Agreement, 2012–2016 35. KYEP, Lessons from Implementation for Scaling up, 2014. 36. Kenya Partnership Strategy (FY2014-18), 2014. 37. The Impact of Private Sector Internship and Training on Urban Youth in Kenya,

Policy Research Paper 7404, August, 2015. 38. From Evidence to Policy, Can the Private Sector Help Train youth for jobs?

February 2016.

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