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AWF Working Papers October 2007 Daudi Sumba, Fiesta Warinwa, Philip Lenaiyasa and Philip Muruthi The Koija Starbeds® Ecolodge: A Case Study of a Conservation Enterprise in Kenya

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AWF Working Papers

October 2007

Daudi Sumba, Fiesta Warinwa, Philip Lenaiyasa and Philip Muruthi

The Koija Starbeds® Ecolodge: A Case Study of aConservation Enterprise in Kenya

The African Wildlife Foundation,

together with the people of Africa,

works to ensure the wildlife and

wild lands of Africa will

endure forever.

www.awf.org

Arusha Center (Tanzania)African Wildlife FoundationPlot 27, Old Moshi RoadP.O. Box 2658ARUSHA, TANZANIATel: +255 27 2509616Fax: +255 27 2544453email: [email protected]

Nairobi Center (Kenya)African Wildlife FoundationBritak CentreMara Ragati RoadP.O. Box 48177, 00100NAIROBI, KENYATel: +254 20 2710367Fax: +254 20 2710372email: [email protected]

Kampala Center (Uganda)African Wildlife FoundationRuth Towers15A Clement Hill RoadP.O. Box 28217KAMPALA, UGANDATel: +256 41 344 510Fax: +256 41 235 824email: [email protected]

Washington D.C. Center (U.S.A.)African Wildlife Foundation1400 Sixteenth Street, N.W.Suite 120WASHINGTON, D.C. 20036, U.S.A.Tel: +1 202 939 3333Fax: +1 202 939 3332email: [email protected]

White River Center (South Africa)African Wildlife FoundationP.O. Box 2977WHITE RIVER 1240,SOUTH AFRICATel: +27 13 751 2483Fax: +27 13 751 3258email: [email protected]

Zambezi Center (Zambia)African Wildlife Foundation50 Independence AvenueP.O. Box 50844RidgewayLUSAKA, ZAMBIATel: + 260 1 257074Fax: + 260 1 257098email: [email protected]

About this paper series

The AWF Working Paper Series has been designed to disseminate to partners and the conservation community,aspects of AWF current work from its flagship African Heartlands Program. This series aims to share currentwork in order not only to share work experiences but also to provoke discussions on whats working or not andhow best conservation action can be undertaken to ensure that Africas wildlife and wildlands are conservedforever.

This paper was edited by the editorial team comprising of Dr. Helen Gichohi; Dr. Philip Muruthi, Dr. PatrickBergin, Joanna Elliott and Daudi Sumba.

Copyright: This publication is copyrighted to AWF. It may be produced in whole or part and in any form foreducation and non-profit purposes without any special permission from the copyright holder provided that thesource is appropriately acknowledged. This publication should not be used for resale or commecial purposeswithout prior written permission of AWF. The views expressed in this publication are the authors and they donot necessarily reflect those of AWF or the sponsor of this publication.

This working paper series is coordinated by Daudi Sumba. He can be reached for more information at - [email protected].

AWF Working PapersOctober 2007

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Table of Contents

Summary

Landscape Conservation and Enterprise Strategy

Overview of Koija Group Ranch

Context for Wildlife Tourism in the Area

The Koija Starbeds Ecolodge

Reasons for Establishing Enterprise

Evolution and Structure of Partnership

Roles and Responsibilities of Partners

Commercial Performance of the Enterprise

Conservation Impact of the Enterprise

Benefits, their Distribution and Impact on Livelihoods

Challenges, Lessons Learnt and Recommendations

Conclusion

References

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

Summary

AWF Landscape Conservation and EnterpriseStrategyOne of the greatest challenges facing conservationists in Africa ishow to balance nature conservation and the needs of the ever-increasing human population in wildlife areas (Adams (2004),Igoe (2006)). Most people who live in these areas are generallypoor and depend on natural resources for their livelihoods(Ndeng’e et al., 2003). Wildlife imposes significant costs on thesepeople through crop damage, livestock predation, human deaths,and restriction of access to natural resources with little or nocorresponding benefits (Muruthi, 2005; Hulme and Murphree,2001; Western et al, 1994). This compromises the people’slivelihoods and reduces their willingness to support conservation.The need to demonstrate that conservation can contribute tolivelihoods and local economic development (by offsetting thesecosts) in order to enlist the support of the rural poor is thereforehigh and urgent. To address this need, conservationists areincreasingly using the conservation enterprise strategy with themain premise being that if people with sufficient capacity canreceive benefits that improve their livelihoods from a viableenterprise linked to biodiversity in their area, the people will actto conserve and sustainably use these resources (Salafsky et al,2001). The African Wildlife Foundation (AWF) has since 1998used conservation enterprises as one among several strategicinterventions for conserving wildlife at the landscape level in itsAfrican Heartlands Program (Muruthi 2004). Conservationinitiatives often take place in a dynamic environment with diversehabitats and species, a wide range of threats to conservation withvarying severity, institutions with different capacities, and wherethere are many actors implementing different strategies. InHeartlands, we use conservation enterprises alongside otherstrategies that address land and habitat conservation; speciesconservation and applied research; capacity building andleadership development; and policy; to ensure that positiveconservation and livelihood outcomes result at the landscapelevel.

In AWF, we define conservation enterprises as commercial activitiesdesigned to create benefit flows that support a conservationobjective. These enterprises provide a way of addressing key threatsto wildlife, conserving biodiversity while at the same time

Conservation enterprises are commercial activities designed to create benefit flows that support a conservation objective.The Koija ‘Starbeds’ Ecolodge was created jointly by a community group, a private sector partner and the AfricanWildlife Foundation (AWF) to help protect a critical wildlife corridor and habitat along the Ewaso Nyiro River in theSamburu Heartland (www.awf.org). Many conservation enterprises claim success mainly based on their noble intentions,but in fact are heavily subsidized commercial projects. Six years after the Koija enterprise opened for business, thispaper looks at its performance based on the triple bottom line of commercial success, conservation impact andimprovement of livelihoods. The paper concludes that the Koija Starbeds have shown very good commercial success,with good but less clear-cut results on conservation impact and livelihoods. The paper also makes recommendationsfor future conservation enterprises in similar areas in Kenya.

contributing to rural poverty reduction through benefits thatimprove livelihoods. In other words, conservation enterprisesenable AWF to combine conservation and developmentobjectives. Key enterprises supported include tourism based oneslike ecolodges, campsites, cultural villages, fishing villages and othernon-tourism based ones such as harvesting and processing ofnatural resource products. Enterprise teams with skills in businessplanning, community development, natural resource planningand law establish these enterprises. AWF is currently supportingover thirty communities in eastern, central and southern Africato establish a wide range of enterprises.

Although conservation enterprises are now widely used as astrategy for conservation and local economic development inpoor rural areas with rich wildlife, there is widespread debate inthe conservation community concerning their success in meetingtheir goals. Some such as Mearns (2003), Watkin (2002) suggestthat these are the best option for rural communities in wildliferich areas to achieve conservation-led development. Others suchas Kiss (2004) question the continual use of conservationenterprises because they have demonstrated little or no evidenceof success in achieving the dual goals of conservation anddevelopment. In our view, the problem may not be one of absolutefailure of the strategy but of poor documentation of case studies.In fact, Kiss (2004) has criticized most enterprise success stories as“weakly documented claims” that provide neither supporting datanor figures in the proper context. This case study will seek toaddress some of these criticisms. It will present an enterprise -Koija Starbeds Ecolodge - that AWF has established jointly witha community group and a private sector partner in SamburuHeartland in Kenya. It will discuss the performance of theenterprise based on the triple bottom line of commercial success,conservation impact and improvement of livelihoods. It will thenshare lessons that we have learnt and make recommendationsfor future enterprises in similar areas of sub-Saharan Africa.This report will cover the period between 2001 and 2006.

Overview of Koija Group RanchKoija group ranch1 (KGR) is located in Laikipia district innorthern Kenya (figure 1) within AWF’s Samburu Heartland. Itcovers an area of 7,554 hectares (18,700 acres). It borders

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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Loisaba and Mpala private ranches to the west and Maasai groupranches to the east and south. Together with these group ranches,it forms the larger Mukogodo pastoral system. The climate in thearea is arid and semi-arid with low mean annual rainfall thataverages 400mm per year and occurs in a bio-modal pattern.Consequently, the area experiences cyclic droughts with the mostrecent one recorded in year 2000. The altitude is generally highand ranges from 1,300m to 1,500m. The main vegetation isacacia bush land that is mainly composed of acacia species(mellifera, reficiens and tortillas) and scattered open grasslands(Oguge 2005). The soils in the area are generally deep, fertile andwell-drained but agricultural production is limited by poorrainfall. The Ewaso NyiroRiver, which forms thewestern border between thegroup ranch and Loisabaprivate ranch, is the maindrainage system and lifelineof the area.

The area is rich in wildlifewith about 250 species ofbirds and 50 species ofmammals. This is notsurprising given that it liesin Laikipia, widely regardedas one of Kenya’s richestwildlife ecosystems outsideprotected areas. It is animportant dispersal areafor wildlife from theneighbouring privateranches during the wetseason. Some of the key wildlife species in the area includeelephants, buffalo, Grevy’s zebra, common zebra, wild dogs, hyena,gazelles, impala, lion etc. Human wildlife conflicts are widespreadin the area due to livestock predation, and competition for waterand grazing between wildlife, people and livestock.

Koija Group Ranch (KGR) is inhabited by the Laikipia Maasaiwho are sparsely settled across the ranch. KGR was establishedand registered with the Ministry of Lands in 1976 with an initialmembership of 148 people. For many years, the total membershipwas unknown due to poor record keeping. Today the groupranch has 448 households consisting of 1200 people. Unlikeneighbouring group ranches, very few members migrate and liveoutside the group ranch even during the dry season when mostpastoralists would migrate in search of water and pasture (Wells,2002). The community organizes itself along the traditionalneighbourhood system. This is a form of decentralization ofpower where a leader, with assistance from a committee, managesa number of households in each neighbourhood. These leaders

are in turn accountable to an elected group ranch committeethat manages all the affairs of the group ranch.

The area has high levels of poverty that can be attributed to anumber of factors including loss of livestock due to droughts;diseases, lack of social facilities, inadequate pastures, poormanagement of group ranches, high illiteracy levels, lack ofemployment opportunities, insecurity arising from banditry andcattle rustling and, generally the inability to exploit availablenatural resources (Kenya, 2002). Consequently, basic socialindicators are also poor. A high number of people are dependenton relief food, illiteracy rates are high (less than half of school

going children are in school)and infant mortality ratesare high. Some section ofthe community especiallywomen are excluded fromresource allocation anddecision-making due toculture and tradition.

Because of the aridconditions, livelihoodoptions in Koija are limited.The main sources oflivelihoods are bee keeping,livestock production, andlately, wildlife tourism. Beekeeping is the most prevalenttraditional livelihoodstrategy in the community.This may be because thecommunity evolved from

the Ndorobo who were hunter-gatherers to become Laikipia Maasai(Wells, 2002). Households use traditional hives and each ownhives ranging from 30-200. Unfortunately, the community hasbeen unable to exploit bee keeping because they lack the capacityto manage community projects. In the past, a honey projectstarted by donors collapsed because of mismanagement andinternal conflicts among the clans.

Livestock production is also widespread in the communityalthough its importance as a livelihood strategy has decreased inrecent times (Wells, 2002). This may be due to prolongeddroughts and environmental degradation, caused largely by thepoor management of communal land tenure system, the collapseof the traditional pastoral management system, livestockoverstocking, overpopulation and lack of a clear vision for thepastoral production system (Kenya, 2002). For example, between1997 and 2000, the community suffered severe drought and lostabout 10,000 animals, which accounted for 70% of all thelivestock. Livestock production is now recovering though the lownumbers and negative net income to the community suggests thatit is no longer viable in such a highly fragile environment (Wells,2002).

1 A group ranch is a legal institution formed underthe Group Representative Land Act, CAP 287 of theLaws of Kenya…

Ew

aso

Nyi

ro

Ilmitiok

LoisabaWilderness

Tiamamut

Koija

MpalaRanch

EwasoPrimarySchool

MunishoiNursery Sch

Anna’sTentedCamp

StarbedLodge

CampSite

NaipepereNurserySchool

NaipeperePrimarySchool

HoneyRefinery

LoshakiNurserySchool

Koija Starbeds Lodge

Sources:AWF, ESRI/USGS, FAO-Africover, KTK

Communities, Mpala Ranch

AWF Spatial Analysis Laboratory, Feb-06

K E N Y AK E N Y A

Private Conservation-Supportive Land

RoadStream

ConservationGrazingSettlement

Group Ranch Boundary

Centrenp Campsite

nx Lodge

l Apiculture

� School

0 21 Mi

0 21 Km

Figure 1: Map of Koija Group Ranch

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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The picture painted here is one of a community facing severe andadverse conditions. However, communities in arid areas are veryresilient, innovative in adverse conditions and extremely responsiveto economic signals and opportunities (Oguge, 2005). They areexcellent at coping with natural shocks using a wide range ofstrategies. In Koija, various coping strategies such paidemployment, off-farm income and relief food distributed byhumanitarian relief agencies during droughts as are used to hedgethe community against shocks that negatively affect the mainlivelihood sources. The rich wildlife resources now provide anadditional opportunity to diversify livelihoods in the area.

Context for wildlife tourism in the area

The tourism industry in Kenya is one of the most developed insub-Saharan Africa. It is the second highest source of foreignexchange after agriculture and contributes about 12.6 % of GrossDomestic Product (Ogutu, 2006). Most of the tourists comefrom Western Europe and North America and visit mostlyprotected areas. Tourist numbers tremendously increased in the1980s but then cyclically fluctuated between the 1990s and early2000s as a result of various factors among them breakdown ininfrastructure, mass tourism, narrow tourism product andsource tourists, uneven distribution of benefits, environmentaldegradation in tourism areas especially protected areas (Sindiga,1999) as well as the rise in global terrorism (Kenya, 2003). Thetourism industry is now recovering because of aggressive marketingby government and private sector, improved security due tostrengthening of the Tourism Police Unit, reversal of traveladvisories by western governments and the support of theEuropean Union in improving the tourism sector (Kenya, 2005).Between 2000 and 2005, tourism revenues increased by morethan 100% from US$288 million to US$653 million. Touristarrivals also increased from 990,000 in 2000 to 1.67 million in2005. This performance is surprising because there is no coherentand coordinated tourism policy and strategy to regulate andspur tourism in Kenya. Most of the tourism development policiesand objectives are scattered in various government plans andstrategies making it difficult to regulate the industry in acoordinated way. However, the government is currentlydeveloping a comprehensive and coordinated tourism policy andstrategy in order to correct past policy failures. It is widely believedthat the mass tourism strategy adopted by Kenya sinceindependence is responsible for the negative impacts e.g.environmental degradation, overcrowding that the country isnow facing. The new policy will not only correct past failures butwill also streamline and regulate alternative forms of tourismand destinations that emerged in response to these failures.

As mentioned earlier, Laikipia district is one of the richest wildlifeareas in Kenya outside protected areas. Most of the wildlife liveson communal and private ranches. The area has rich wildlife-based tourism potential and is now emerging as an importanttourist destination in Kenya specializing on exclusivity and diversetourism experiences in high-class resorts in remote locations. Asurvey by the Laikipia Wildlife Forum (LWF, 2003) on the tourist

dynamics in the area shows that there is a vibrant tourism industryin the area with 28 tourism facilities with a capacity of 852 bedsand 284,455 in-season annual bed nights. There is also a relativelyadvanced infrastructure network including airstrips that facilitateeasy movement of tourists. These factors were important inproviding the enabling environment for the establishment of theStarbeds Ecolodge.

The Koija Starbeds Ecolodge

The Starbeds Ecolodge is a rustic and exclusive eight-bedcommunity-based ecotourism enterprise located on the banks ofthe Ewaso Nyiro River at the northern tip of Koija group ranch(see figure 1). It has its origins in the USAID funded Conservationof Resources through Enterprise (CORE) project whose goalwas to improve conservation and management of naturalresources through increased benefits to communities andlandowners in areas critical to parks and reserves. Established in2001 through a partnership between AWF, Loisaba Ranchrepresented by Oryx Ltd and the community, it opened forbusiness later that year.

Reasons for establishing ecolodge

The Starbeds Ecolodge was established to meet three mainobjectives:

To contribute to the conservation of key conservation targets bymitigating critical threats (see table1). Several conservationtargets in the area including the Ewaso Nyiro River, elephantmovement routes, endangered species (wild dogs, Grevy’szebra) and the woodland grassland mosaic are severelythreatened. Some of the critical threats include habitatdestruction and fragmentation, competition from livestock,excessive water abstraction. AWF has instituted a naturalresource management program in the area to mitigate thethreats, and this enterprise is one among many other strategies.

To provide alternative income to diversify rural livelihoods forcommunity: The Koija area has limited livelihood options.The community is highly vulnerable to natural shocks and asa result, poverty is widespread in the area. The ecolodge wascreated to exploit the potential for wildlife tourism potentialin the area and expand the livelihood options for the peoplein order to improve their lives.

To promote investment in conservation sector through wildlifeenterprise: In this area, most of the conservation investmentsand associated benefits are on private ranches. There is verylittle investment and benefits on communal ranches tocompensate communities for the high costs of wildlife damagethey incur. This has created disincentives for communities toprovide land for conservation. Therefore, the ecolodge wascreated to demonstrate to the communities that beyondpastoralism, wildlife tourism is also a viable, compatible andbeneficial land use option.

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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Evolution and Structure of the Partnership

The process of developing a community enterprise at Koija beganin 1999 when Loisaba Ranch approached AWF to facilitate apartnership agreement with the Koija group ranch that wouldallow the parties to develop a mutually beneficial relationship,provide economic incentives and enhance livelihoods in thecommunity. A group of young Kenyans operating through aprivate company, Wilderness Guardian Company, had justleased the 61,000-acre ranch for 15 years starting in 1998 andaimed to make it a model in private lands conservation as well asan exciting and exclusive travel destination in Africa. They investedconsiderable amounts of resources in the leased ranch torehabilitate infrastructure and diversify income streams. Theseinclude cattle ranching, crafts and woodwork and wildlife tourismwith tourism contributing 70% of the total revenue. Because ofthe location of the ranch in an arid area beside two poorcommunities, various critical issues threatened the future of thebusiness.

First, during this time, severe drought had decimated livestockpopulations on the ranch and in the communities. These lossesreduced the revenue from cattle ranching and affected the abilityof the ranch to repay debt borrowed to finance operations. Thesight of dead carcasses on the ranch reduced the value of wildlifeviewing experience on the ranch and affected the tourism business.At the same time, pastoralists escaping severe drought incommunity areas drove their cattle into the ranch in search ofgrazing. This increased competition for grazing resources forwildlife and cattle threatening the viability of the business. Second,a new political consciousness had arisen among the Maasai andthey began to challenge private land title held by the ranchers ofsettler origin as part of wider agitation for land reform in Laikipiaaimed at correcting colonial injustices. This was fuelled byinformation circulating among the Maasai that a pre-coloniallease agreement that they signed with the British in 1900 for the

use of the land was due to expire in 2000.Because similar invasions in Zimbabweappeared to spur the Maasai, the danger ofland invasions and loss of investments wastherefore very real for the ranch. Third, theviability of Loisaba Ranch as an unfencedwilderness area depends on the neighbouringcommunity areas that provide wet seasondispersal for wildlife. Securing the communityareas for continual movement of wildlife wascritical for the conservation integrity of thewilderness area and dependent tourismbusiness. For the business to survive in theface of these threats, it had to develop andmaintain good relationships with theneighbouring community.

The ranch then formed the LoisabaConservation Trust (LCT) as the vehicle toengage and develop beneficial relationshipswith the adjacent communities. The goal of

the trust is to spearhead community development projects as away of sharing benefits and making the ranch valuable to thepeople. Several projects including education, water and mobilehealth clinic and employment for 120 community members werecompleted. In addition to these, Loisaba wanted to demonstrateto the community that wildlife has value and that conservationpays. In order to do this sustainably, Loisaba proposed to replicateits conservation initiatives in community lands in partnershipwith the community. These partnerships would enable thecommunity to tap into the tourism-based economies of scalethat already exist on Loisaba to establish a lodge that wouldotherwise be impossible in such a remote area. They agreed toreplicate the community lodge from Loisaba’s Kiboko StarbedsEcolodge and have it fully managed as a part of the ranch’stourism business.

During this time, AWF and partners were implementing theUSAID funded Conservation of Resources through Enterprise(CORE) project in Laikipia that had strong focus on enterprisedevelopment. Loisaba and the community approached AWF toact as an honest broker for a joint venture partnership for thedevelopment of the ecolodge and help to offset some of thetransaction costs that so often hinder the development ofsuccessful partnerships and investments in conservation in remoterural areas. The first step was to develop a corporate institutionalstructure (see figure 2) in order to legalize the partnership toundertake profitable business and philanthropic activities. AWFfacilitated the formation of the Koija Conservation Trust (KCT)in which there are three partners – AWF, Loisaba and thecommunity. KCT is now the beneficial owner of the business. Afive-person board of trustees representing the three partnersgoverns the trust. There are two trustees each from Koija groupranch and Loisaba, and one from AWF. The main responsibilitiesof KCT is to provide management oversight over the private sectorpartner; distribute income from the enterprise among thepartners and procure services required to maintain or improve

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,noitcurtsedtatibaHrofnoititepmoc

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sahmargorPMRNnAehtnidetaitinineeb

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Table 1: Key conservation targets, threats and mitigation strategies in Koija

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

6

the ecolodge. This partnership structure has helped to articulatethe roles and responsibilities of the partners and to formalizethese where necessary through legal contracts. This has helpedstreamline expectations and reduce conflicts in the managementof the enterprise.

Roles and responsibilities of partners in KCT

African Wildlife FoundationAWF provided a suite of the legal and technical support servicessuch as business planning, community mobilization and capacitybuilding to support the establishment of the project. It alsoprovided a grant of US$48,000 from the CORE project to covercommunity equity in the partnership and facilitate theconstruction of the ecolodge. The technical support servicesamounted to approximately US$20,000. Because of theseservices, the following enabling conditions for the lodgepartnership were developed. We assisted the community to secureproperty rights for the community land through the acquisitionof a title deed. We created new institutions to facilitate thepartnership and improved the capacity of the community toparticipate in the partnership through training. We later facilitateda management agreement for the lodge between the communityand Oryx Limited representing Loisaba. We also assisted thecommunity to set aside 500 ha of land to support conservationand lodge operations. AWF continues to provide governancesupport to the partnership to ensure it meets its goals.

Loisaba RanchLoisaba Ranch is represented in the partnership through itsmanagement vehicle – Oryx Limited. Oryx Limited manages theStarbeds ecolodge on a daily basis through a managementagreement with the community through KCT. Oryx providesmarketing, accounting, logistical and communications supportas well as the operating capital. It is paid 10% of gross revenueand 5% of net profit respectively for managing the lodge.

Koija Group RanchElected leaders of the group ranch committee represent thecommunity in the partnership. During the development process,these community leaders mobilized community members andsecured buy-in for the partnership. They also mobilized thecommunity to contribute US$2000 towards the partnership.Because the community participated in the processes that led tothe development of the lodge, there is strong sense of ownershipof the ecolodge. Currently, the community leaders are responsiblefor working with the community to determine how income fromthe lodge is distributed. They are also responsible for addressingcommunity concerns in the partnerships.

Commercial Performance of the Enterprise

The Koija Starbeds ecolodge has been operational sinceSeptember 2001 when it opened for business. Six years later, theperformance of the lodge business has been very good (Table 2).The table shows that both the occupancy and the net profit havebeen increasing since the lodge started operations. Occupancyhas steadily risen because the lodge utilises an active and successfulmarketing network at Loisaba. Consequently, the ecolodge wasable to make a profit over a three-month period in 2001 after itopened for business. Experience with other lodges has shownthat most of them make losses during the initial years as theydevelop marketing networks in the industry.

During the first two years of operation, the terrorist attacks ofSeptember 11, 2001and the subsequent travel advisories issuedby western governments (who are the main markets for tourists)against travel to Kenya negatively affected the occupancy andprofits. This illustrates the volatility of tourism in response toadverse international events.

The costs of managing business have also been rising to cater forincreased growth. These costs include the operational costs,management and incentive fees of the private sector partner.Most importantly, the figures show that the business is very viablebecause it is paying for all its direct costs. The business currentlyabsorbs 70% of its revenue in costs that are necessary to maintainthe high standards required of an exclusive ecolodge. This scenariois different from many conservation enterprises that are highlysubsidized concerns by either private or public sector partners(Kiss, 2004).

Koija Group Ranch Representatives (on behalf of the KoijaCommunity - landowner)

Koija Community Trust( Koija Group Ranch, Loisaba Ranch and AWF)

Oryx Limited(Management and operating Company)

Starbeds Ecolodge

Lease land

Manages EcolodgeManagementfees

•Provides capital and otherservices to develop/maintain lodge

•Provide management oversight

Figure 2: Structure of partnership for the Koija Starbeds Ecolodge

Benefit distribution

Net Revenue/profits from lodge

AWF Working PapersOctober 2007

The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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To date, the ecolodge has generated US$108,271.20 indistributable profit to the community. Given that the initialinvestment was US$48,000, the return to direct investment forthe community is 225%. The total return on investment for theproject is 24% (distributable profit / (direct costs + AWFengagement costs = US$70,000). This is ten times more than thehighest estimates made by Elliot and Mwangi (1998) for largeranches in the area. The return on land set aside for conservationnow stands at US$216 per ha which is about forty times morethan the value Elliot and Mwangi (1998) estimated for wildlifetourism on large ranches in Laikipia.

Reasons for good performance

• As mentioned earlier, the ecolodge is managed as part of theadvanced and thriving Loisaba tourism business and thereforehas been hedged from various start-up working capital costs(e.g. marketing costs) that are traditionally high in this industry(Davis, pers comm.). Its breakeven point is zero becauseLoisaba assumes all the operating risk but generates incomefor the community from bed-nights and conservation charges.This explains why the ecolodge has been able to pay communitybenefits since it started operations.

• The ecolodge received grant money for the initial capitalinvestment that it does not have to repay. Without any debtobligations, the ecolodge has been able to generate incomeand cover its costs from the start. This illustrates why it isimportant to provide start-up capital to such enterprises if weare serious about using enterprises as a strategy to generateincentives for conservation. This is particularly relevant in acountry like Kenya where communities living in marginal landsmay have property rights to land but because of the low marketvalue of land, they are unable to use it as collateral to securefunds from financial markets for development projects.

Conservation impact of theenterprise

Our initial strategy for achievingconservation impact was to work with thecommunity to establish a conservation areato leverage land for conservation inreplication of the model set by earlierenterprises such as Ilng’wesi Ecolodge(Sikoyo et al, 1999). The community set asidea 500-hectare conservation area to supportconservation and provide opportunities forwildlife viewing for tourists staying at theecolodge. This helped the community to

understand clearly the linkage between the enterprise andconservation (Gadd, 2005). The conservation area located inthe northern part of the group ranch serves as a wildlife dispersalarea for wildlife from the northwestern private ranches. We thenworked with the community to set regulations to ensureconservation management in the area e.g. a prohibition of grazingexcept during emergencies like severe droughts. We also establisheda community scout system to improve security for wildlife andensure that no grazing takes place in the conservation area.

Ecological Assessment and Natural ResourceManagement Program

In 2002, Fumi Wells conducted an initial assessment of the groupranch and found that the conservation area that had previouslybeen extremely degraded was showing signs of recovery comparedto the other parts of the group ranch (Wells 2002). However, itwas too small to support viable wildlife populations and ecologicalprocesses required for long-term conservation success in such afragile and drought prone area. She recommended that moreland be acquired in the adjacent community areas to expand therange for wildlife to the wider ecosystem. She also found thatovergrazing was rampant in the conservation area because therights and responsibilities of group ranch members for theconservation program were not clear and there existed nomechanism to reinforce regulations in place. Because of theinadequacy in methodology and time, this study did not constitutea baseline for future comparison. However it assisted AWF tobegin an Natural Resource Management (NRM) program inKoija and the adjacent Tiamamut and Kijabe group ranches(Kiyiapi, 2003).

Under this program, we conducted a systematic natural resourcemanagement planning and zoning process where we divided landinto three zones for settlement, grazing and conservation. Foreach of the zones, the community agreed on land use activities ina participatory manner. The conservation area was set asidestrictly for wildlife conservation and enterprise development whilethe grazing areas were set for livestock grazing. In the grazing area,the communities are now trying to revive the traditional grazingsystems whose collapse has led to wide scale degradation of the

Table 2: Commercial performance of Starbeds Ecolodge (US$)1002 2002 3002 4002 5002 6002 latoT

ycnapuccO )%5(801 )%9(612 )%41(423 )%71(504 )%91(744 )%81(144 )%01(0051

euneveRssorG 687,23 157,56 753,89 649,221 696,531 478,331 635,554

stsoCdexiFlatoT 204,3 408,6 602,01 857,21 677,21 05.676,21 649,54

stsoCelbairaVlatoT 264,42 425,34 685,26 288,67 692,48 05.632,38 057,192

tiforPteN 630,4 994,21 369,02 972,72 736,13 169,73 414,69

elbatubirtsiDtiforP 3 08.822,3 02.999,9 04.077,61 02.328,12 06.903,52 041,13 02.172,801

3 Distributable profit (to Koija community) = Net profit – CapitalReplacement Reserve calculated at 20% of the net profit. The capitalreserve is for financing major capital development and on-goingmaintenance of the property.

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The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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rangeland. They have agreed on grazing times for smaller zones ofthe grazing area together with sanctions for penalizing violatorsbased on Maasai traditions. Extensive rangeland rehabilitationis also underway in pilot sites in the grazing areas in order toimprove the condition of the range. This program is now beginningto show success. The Koija conservation area has beencontiguously linked Kijabe and Tiamamut conservation areas inadjacent group ranches bringing 8500 acres of land underconservation (see figure 3).

The conservation areas are marked in green on the map andallow for continual wildlife movement from the private ranchesin the south and west to the group ranches in Samburu andeventually to Samburu National Reserve. Kijabe group ranchhave now replicated the Koija model and they have an ecolodgewithin their conservation area. We have formed and developedthe capacity of natural resource management committess withinthe communities and they now manage these areas. Eachcommunity has also replicated the community scout system andenterprise development as strategies for managing the area. Whenthe Koija conservation area is viewed in the context of the widerNRM program and the critical wildlife habitat that has beenbrought under conservation management, the chances that itwill contribute to future sustained conservation impact are high.

Systematic Ecological Monitoring

The Koija conservation area has been existent for five years now.Oguge (2005) assessed the conservation and group ranch areato determine its conservation status and set a baseline for futuresystematic community-based monitoring. He used GeographicInformation System (GIS) analysis of satellite imagery togetherwith systematic ecological vegetation surveys and communityinterviews. He found that although there was severe degradation

in the Koija ecosystem after years of overuse, range conditionshad slightly improved in the conservation area compared to theother areas of the group ranch following the NRM program. Hefound that the biggest threat to land conservation was livestockovergrazing by locals and outsiders. He recommended that thegroup ranch develop a proper mechanism to enforceconservation regulations and safeguard conservation in the longterm. He also recommended that other land managementstrategies e.g. range rehabilitation be incorporated into the NRM

program to ensure long-term conservationsuccesses. He also recommended that acommunity based monitoring system beestablished using the assessment as a baseline forfuture monitoring.

We are now working with the community tostrengthen sanctions against illegal grazingthrough Maasai traditional institutions. We havealso begun range rehabilitation activities in thearea as a way of improving the rangemanagement. A community monitoring systemsis also in place. The assessment also found 13species of wildlife and a high biomass of241individuals that confirmed the abundanceof wildlife in the area. Community interviewsrevealed that attitudes towards conservation hadpositively changed because of the enterprisemainly because the link between conservationand the enterprise is clear. In recognition of theimportance of wildlife to tourism in the area,the community reported that they now movetheir livestock away from wildlife areas when faced

with conflicts (Oguge, 2005).Although some changes have occurred in the area, it is difficultto attribute them to the enterprise because no ecological baselinewas developed at the inception of the conservation area. What isclear is that the NRM program has made good progress especiallyin expanding the land dedicated to conservation and linking it tothe wider landscape context. That area was highly degraded, it isspatially and temporally variable, therefore a long period will berequired for it to recover substantially.

Benefits, their distribution and impact onlivelihoods

It has generally been argued that although tourism is now thesecond most important source of foreign exchange in Kenya(Kenya, 2004), very little benefits reach the communities that livewith and bear the costs of wildlife. It is also widely accepted thatcommunities do not enjoy substantial and sustainable benefitsbecause of lack of equitable benefit distribution mechanisms.With these in mind, we developed a clear benefit distributionmechanism for the Koija Community through the KoijaCommunity Trust (KCT) to maximize the share of benefits fromthe enterprise. The managing partner, Oryx Limited, pays allagreed revenues from the ecolodge directly into the KCT bankaccount and distributed as follows:

Figure 3: Koija Group Ranch in the context of the wider NRM program

np

nx

np

np

�l

np

lnx

np

Camel Safaris

Ew

aso

Nyi

ro

Tura

Aloe Project

Ewaso

Kijabe Lodge

Starbed Lodge

Honey Refinery

Munishoi

Kijabe

Anna’s

KimanjoiLariak Lengai

Naiperere

Koija

Kijabe

Morpusi

Mpala Ranch

Tiamamut

IlmitiokMusul

Loisaba Wilderness

Ilkiloriti

Land Use Planning in Koija, Kijabe, and Tiamamut Group RanchesSources:AWF, ESRI/USGS,FAO-Africover, KTKCommunities,Mpala Ranch

AWF Spatial Analysis Laboratory, Jul-05

K E N Y AK E N Y A

0 21 Mi

0 21 Km

Private Conservation-Supportive Land

RoadStream Conservation

GrazingSettlement

Group Ranch Boundary

Centrenp Campsite

nx Lodge

l Apiculture

� School

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The Koija Starbeds Ecolodge, Kenya: A Case Study of a Conservation Enterprise

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• Twenty-five percent is allocated to the capital fund to financecapital development and maintenance of the ecolodge. Forexample, in between 2001 and 2006, US$19,282.20 hasbeen set aside and used to obtain insurance for the property,construct and equip a kitchen, and to construct a footbridgeacross the Ewaso Nyiro in order to enhance visitorexperience.

• Twenty percent is allocated to the group ranch to cater forthe management expenses of the group ranch managementcommittee to improve service delivery to members.

• Eighty percent of the balance is spent by the trust oncommunity development projects. The equitable use of thesefunds is determined with the participation of the groupranch members through the annual general meeting. Thebalance of the money is deposited in the KCT bank account.

Financial benefits

Since it opened in 2001, the lodge has generated US$77,131.20for the community. The group ranch committee has spentUS$15,426.24 of the community income for management costsand invested US$49,364 in community development projectsthat include water provision, education bursaries, and healthclinic. The community has banked about US$12,341 in thecommunity bank account. The community also earns othertourism related incomes from warrior dancing for tourists at thecultural manyattas and sale of handicrafts in the area.

Non financial benefits

EmploymentTwenty-five community members are employed at the ecolodgeas a supervisor, guides, security men and stewards and have earneda total of US$19,200 (about US$3840 per year). An additional30 youths and 45 women also derive their livelihood fromcultural activities and sale of handicrafts at the cultural village,which is a spin-off enterprise visited by tourists from the ecolodge.The ecolodge is small scale and provides few the employmentbenefits to the community. The trickle down effect on livelihoodsfrom these employment opportunities is therefore unclear.

EducationThe literacy levels in the community are very low and thereforethe community has prioritized investment in education as a keywelfare project. A project called “Conservation for Education”started in the area is financed through the Koija Bursary Fund.This fund has spent US$7,500 to sponsor 15 students inboarding primary schools and 23 in provincial secondary schools.The community is also sponsoring for the first time a femalestudent at a local university in Kenya. They hope that educationwill lead to conservation in the long-term as more communitymembers are educated and adopt conservation issues. They alsohope that education will equip the community members withskills that will allow them to pursue other sources of livelihoodlike employment and reduce the pressure on local resource use.

HealthThe local health clinic has been equipped with a vaccine fridgeand power supply. In a area with high infant mortality rates andother deadly diseases, this has improved primary and generalhealth care to the community that is cut off from such facilitiesby geographical remoteness.

SecurityThe community has employed two community security scoutswho work together with the community and other scouts fromthe Naibunga Conservancy and private ranches to guard theconservation area. This has reduced the incidences of insecurityand cattle rustling that were so rampant in the area by otherpastoralists before the NRM program began. Cattle rustling andbanditry in the area constituted a major economic cost as mostof the people either lost large numbers of livestock on which theirlivelihoods depended or had to organize extra security for theirlivestock. Today the community acknowledges improved securityas a major benefit of the NRM program (Nareda, 2004). Thisconfirms that for most rural people, it’s the impact on assetsrather than cash payments that matter most (Ashley, 2000).

Impact on livelihoods

The community has 1200 registered members who are entitledto benefit from the lodge. The return so far to the communityhas been US$64 per person or US$12.8 per person per year. Incomparison to the poverty line of KES 1,239 per month inKenya (US$16.50) (Ndeng’e, 2003), the benefits to livelihoodare not substantial. This may explain why the community decidedto invest instead in community development projects that benefiteveryone and matter most to the community because of theirability to improve other community assets. It will take time beforesustained benefits improve community assets and later livelihoods.This appears possible given that wildlife based tourism is nowemerging as a realistic and important livelihood option in Koijacontributing 19% of the total net income (Wells, 2002).

Conversely, there is a perception among the community membersthat NRM has had a negatively impact on livestock keeping andlivelihoods through the loss of grazing area to conservation (Wells,2002). This finding is supported by what Rutten (2001) foundout with a similar ecotourism project in the Eselenkei pastoralarea near Amboseli National Park where communities alsoconsidered a conservation area as lost grazing land that hadnegatively affected livestock keeping. In Koija, the conservationarea comprises 9% of the total group ranch area which appearssignificant, but when seasonal grazing areas owned by absenteelandlords are included, it comprises only 1% of the total grazingarea (Wells, 2002). However as earlier mentioned, only 3% ofthe community migrate with livestock and live outside the ranchon a seasonal basis. Therefore, the loss of grazing area in thecontext of the total group ranch area appears significant. Thisperception brings to question the commitment of the Koijacommunity to conservation. It appears that though they havedeveloped positive attitudes towards wildlife because of benefits

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from tourism, they have not fully embraced conservationpractices, which normally take time. It may also be that since thebenefits have not been significant, they still value livestock keepingbecause of its ability to contribute directly to household wealthand livelihoods.

This enterprise has generated substantial non-financial benefitsand therefore has potential for conservation success becauseexperience has shown that the poor tend to value these benefitsmore because of their ability to increase community assets.However, the extent to which these benefits have significantimproved livelihoods is not ye clear. This is because measuringand estimating the impact of the enterprise on livelihoods iscomplex given the wide range of stakeholders and interests involved(Holland, 2002). Most projects claim success because they havedistributed substantial income to a homogenous group calledbeneficiaries. This is not true because in most communities, thereare different stakeholders who benefit from, and are impacteddifferently by projects based on among other things, their power.Future socioeconomic monitoring and analysis will be requiredto establish the extent to which these benefits, if they shouldcontinue, have impacted on the different groups of thecommunity.

Challenges, lessons learnt and recommendations

One of the main challenges the enterprise faces is that it relies toomuch on private sector partner (Loisaba) for its survival. Thismay because the community lacks key entrepreneurial andmanagement skills due to widespread illiteracy. Though therelationship is currently working well for the enterprise, there isneed for the capacity development of the community to so thatsometime in future, they can manage the enterprise themselves.This is possible given that there are examples of other communitiesthat are managing similar enterprises in Ilng’wesi and Tassia insimilar community areas. The Conservation for Educationinitiative is therefore a step in the right direction.

The definition of who is a community member is very unclear inthe community. Currently only men and widows are registeredand considered group ranch members (Wells, 2002). Themajority of women are not registered as group ranch membersand therefore are marginalized especially from decision-makingand benefit distribution. This reflects the patrilineal nature ofthe Maasai society but has the potential to negatively affect theenterprise if a huge proportion of the community is not involvedin decision-making and benefit distribution. The group ranchwill need to revise the criteria for membership to include theimportant but marginalized members of the community.

This community has a history of serious internal conflicts betweensub-clans that has in the past led to the failure of communityhoney enterprises. Partners have made deliberate efforts to involveall the different clans in the conception, development andmanagement of the lodge. Partners need to ensure that themechanisms that has been developed in the community continually

functions to stem potential internal conflicts among communitysub-groups that can kill the enterprise. These mechanisms shouldalso enable the community to enforce its own regulations criticalto the survival of the lodge e.g. control of grazing in theconservation area and equitable benefit sharing.

The enterprise has benefited from a wide range of technicalsupport services provided by partners. Though the enterprise isnow making profits and can pay for all its direct costs, it stillrequires considerable partner support for indirect costs e.g. ingovernance issues in the community and costs of NRM on groupranch land. The greatest challenge facing partners is how theycan continue to provide these services cost effectively to thisenterprise until it has matured and can pay for all indirect costsand services.

This enterprise has demonstrated that the conservation logic orlink between enterprise and conservation must be clearlyarticulated and understood to all involved if it is to be successful.For the Starbeds, the link to the conservation area and the largerNRM program and conservation landscape is clearly articulatedand understood. This has laid the foundation for long-termsuccess for the enterprise. Because the environment is very fragile,the NRM program needs to be strengthened in order to improvethe degraded rangelands in the wider group ranch and tosafeguard the conservation areas.

This enterprise has also demonstrated that it is important toconsider the scale of operations. The Starbeds is small in scaleand does not require a lot of external expertise to run it. All theemployees except the Manager are from the community. This hasbeen important capacity building for the community in the area.Therefore, similar enterprises in other areas should be on a viablescale that can be easily managed using available local skills.

Most enterprises generally allocated all revenues to meet growingcommunity needs and satisfy community expectations. Very littlemoney is set aside for expansion, reinvestments or evenmaintenance. This affects the performance and viability of theenterprise in the long run. The Starbeds has safeguarded againstthese by creating a Capital Reserve Fund to fund future capitaldevelopments and ongoing maintenance. Such a fund should beincluded in benefit distribution schemes of all enterprises to ensuresuccess in the long term.

Community enterprises should utilize low scale investments thatdo not strain community or the donor. While such externalfunding is welcome, communities and their partners shouldpreferably raise the money themselves through debt financing.This is because debt repayment can act as a motivation forenterprise success. Very modest donor grant funding was investedto develop the Starbeds ecolodge but in hindsight and given itsoutstanding commercial performance, the development couldhave been financed through debt.

For any community private sector partnership to deliver enterprisesuccess, it is important to have correct legal corporate structures

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to govern the relationship and the business. In the case of theStarbeds, the Koija Conservation Trust was created as the vehiclefor the partnership. This has clearly articulated roles,responsibilities and benefits and where necessary sealed thisthrough legal contracts. This has reduced conflicts and increasedthe probability of enterprise success.

Clear benefit distribution mechanisms are also a requirementfor enterprise success. In most communities, the amount, natureand distribution of benefits determines their continual supportfor the enterprise. This is because most communities hold highexpectations that enterprises will improve their livelihoods. If nomechanism exists, the resultant conflict could lead to enterprisefailure. In Koija, a benefit sharing mechanism exists although itstill needs to be more inclusive at the community level e.g. includewomen. In addition, benefits from enterprises must be seen asone of the livelihood streams complementing other livelihoods inany society but not the panacea for all the livelihood problems.

Conservation enterprises need to be implemented in the contextof other NRM measures if they are to deliver conservation impact.It is highly unlikely that an enterprise alone can deliverconservation in most of the complex areas of Africa. Theenterprise need to be used to generate incentives that complementother direct NRM measures such as habitat protection orrestoration, required to ensure conservation impact.

Careful planning is required for the use of profits fromenterprises that accrue to the host community so that withincreasing success, they do not harm conservation. For examplein an area like Koija, caution must be taken to ensure that thecommunity do not invest profits into expanding livestock stockinglevels in such a fragile environment because resultant pressuremay negate the long-term gains from conservation.

The policy environment covering ecotourism may beunclear or un-conducive but successful enterprises maystill emerge. This may be due to a number of factorsthat include strong collective will and cohesions of thecommunity, presence of a committed private sectorpartner, high tourism potential and existence of othersupport organizations, which help to mitigate thetransaction costs imposed by lack of or unclear policy.This is what happened with the Starbeds and elsewherewith the Mahenye ecotourism project in Zimbabwe(Murphree, 2001).

Conclusion

This case study has shown that Koija Starbeds ecolodge as anenterprise strategy for conservation has demonstrated goodcommercial success, with good but unclear results on livelihoodsand conservation. However, the analysis has also shown theenterprise possesses certain conditions that have been articulatedby among others Salafsky (2001) and Kiss (2004) as being crucial

for long-term success in three areas of commercial success,livelihoods and conservation. The ecolodge has clear linkage toconservation; strong local ownership and participation indecision-making; high non-financial benefits; low population ofbeneficiaries which allows for greater impact of revenues accruedin the community. There is secure tenure for the ecolodge;committed private sector partner with clear partnershipmechanism and it’s a simple and small enterprise that can bepartly managed using local skills and expertise in future. Eventhough the Starbeds is currently not successful in all aspects ofthe criteria, it is too early to either dismiss it or abandon enterprisestrategy for conservation in pastoral areas of Kenya. The enterprisestrategy has only been in use for almost a decade in these areas,which is rather a short time to harshly judge enterprises in avolatile tourism industry as a failure. More time is required beforeconcrete examples of success can emerge. For the future successof enterprises, conservation organizations and other playerssupporting enterprises will need to learn from existing enterprisessuch as the Starbeds and adapt lessons into development andmanagement of enterprises to ensure they provide all roundedsuccess.

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This Publication is funded by the NetherlandsMinistry of Foreign Affairs/Directorate Generalfor International Cooperation (DGIS).

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© 2007 African Wildlife Foundation

This document was produced by AWF’s Program teamFor more information, please contact [email protected]