Figure 1.4 UEP Process

1.5 Climate Change, Social Exclusion and Poverty

At the time of preparing this UEP, the COVID-19 pandemic continues to disrupt societies and economies around the globe. The negative impacts, both health and economic, have been felt across different geographies and locally in LM. While governments are trying to address current challenges, this pandemic has brought to the fore the need to understand better the connection between vulnerable groups, livelihoods, and shocks from critical events such as climate change. Climate change poses a serious risk to livelihoods and poverty reduction efforts. Climate hazards and the depletion of natural resources disproportionally affect women, PWD, elderly people, and people with chronic illnesses. Low-income households that rely on weather-sensitive subsistence livelihoods such as agriculture are especially vulnerable. Harmful social norms pose additional challenges, by limiting the participation of these groups in formal risk reduction and climate adaptation programmes. In LM, youths, elderly people, women and PWD are often excluded from socio-economic activities; they lack access to information, assets, and finance; and they do not participate in decision-making processes. This makes them more vulnerable to the impacts of climate change and other shocks such as the COVID-19 pandemic.

Figure 1.4 UEP Process

Disruption of livelihoods and economic activities

Economic poverty, weak social protection, powerlessness

Climate Change

Vulnerability to disease outbreaks

Food insecurity Social exclusion, discrimination

Increased inequality

Poverty

Source: Atkins Vulnerability to urban disasters Spatial segregation, informality

Statistically, PWD are more likely to have lower levels of education, be illiterate or unemployed. Due to discrimination, they usually have less access to support networks and social capital than their able-bodied counterparts. These social networks are recognised as a key factor that enables groups to prepare for, respond to, and recover from, climate variability and shocks, and this lack of access increases the vulnerability of PWD to climate change. In Lamu, PWD often operate small businesses, yet they lack access to finance to develop their economic activities and to invest in measures that would better-prepare their businesses for extreme events and climate hazards. Due to the complex landscape, restricted mobility and lack of accessible transportation and infrastructure make PWD particularly vulnerable to climate events such as flooding, severely affecting their livelihoods and daily routines. Elderly people face similar situations, which have an impact on their access to social infrastructure such as healthcare services.

Women and young people in LM often lack access to capital or assets to manage the impacts of climate change and other similar shocks. While these groups are heavily engaged in agricultural livelihoods, their work is often considered as family work and unpaid. Lack of land ownership limits their access to credit and financial resources. This situation, paired with reduced social safety nets, critically affects their ability to recover from disasters such as floods or droughts. Young people who engage in transportation services or own businesses also see their access to markets and their sales or income disrupted when there are extreme weather events. Similarly, the COVID-19 pandemic has critically affected women and youth-owned businesses.

People who live in informal settlements are also identified as a vulnerable group within this context in LM and especially on Lamu Island. Rapid, unplanned urbanisation increases the vulnerability to climate hazards for the urban poor. Informal settlements are often located in hazard-prone areas and are excluded from formal risk reduction and climate adaptation programmes. They are often settled on marginal land and have limited drainage and sanitation infrastructure. Flooding is a significant issue, in particular, regarding contamination of water sources, and associated health impacts. Their livelihoods, most often in the informal sector, are reliant on being able to trade every day and are more vulnerable to disruption, be it a pandemic, or an environmental disaster. In addition, they face similar problems with access to credit and financial resources as youth, women, and PWD, which limits their ability to proactively adapt to climate variability and change.

Consequently, it is imperative to understand exposure, and vulnerabilities, to build resilience into future projects through appropriate adaptation measures. In particular, it is important to ensure that adaptation measures do not act to reinforce or deepen existing inequalities, but need to be accessible to groups that are already marginalised. For example, climate-resilient technologies need to be affordable, accessible to all, and culturally appropriate. Their implementation needs to be accompanied by capacity building and technical support. As well as considering inclusion and poverty elements of all adaptation and climate risk management measures, excluded groups may require targeted interventions that are designed to help build their resilience to climate change.

When implementing this UEP, it is important to consult and understand the needs and expectations of local communities, and particularly SIGs, who have wealth of knowledge for local environmental conservation and are already powerful agents for climate action. In Lamu, for example, there are several organisations that should be actively included in the UEP project cycle, such as Flipflopi, Taka Taka, Lamu Youth Alliance, and Mtangawanda Mangrove Restoration Women’s Group, among others.

Increasing the resilience of current and future livelihoods and infrastructure is key to poverty reduction and has been addressed systematically throughout the UEP to avoid creating polarisation and further exclusion. Similarly, ensuring that infrastructure projects, VC opportunities and development policies are climate-resilient will not only help the built environment to better respond to future climate risk but also communities and excluded groups to be less affected by climate change events.

1.6 COVID-19 Impacts in Kenya

In Kenya, the impact of COVID-19 has been real and devastating. The pandemic has significantly had an impact on all aspects of life such as health, institutional revenues and livelihoods. COVID-19 has hit the most vulnerable the hardest, particularly the densely-populated informal settlements, as well as other people who lack access to adequate housing and basic services.

The informal economy, employing about 70% of Kenyans has been drastically affected as lockdowns and curfews were introduced to curb the transmission of the virus. Low wage earners have been hit the hardest because they rely on the informal sector and daily wages. Mostly they lack the option to work from home as they are mostly in the service industries and more exposed to the virus. Despite the low wages, some have also received pay cuts, and some have lost their jobs all together. There has also been loss of revenue due to reduced activities in other sectors like industry, commerce and hospitality with the effects felt throughout their supply chains. Travel restrictions have led to a sharp and substantial fall in demand for movement and subsequent impacts on supply chains:

> Road freight and logistics have been interrupted as long-distance truck drivers are suspected to be a major source of imported infections and transmission.

This has had implications for trade and cross-border activities. Goods take longer to reach destinations.

For perishable agricultural commodities, post-harvest loses become rampant; > Disruptions in global supply chains have also led to shortages or delays for critical inputs for agriculture ultimately disrupting production and food supply and manufacturing, leading to price increases; and > Increased awareness of hygiene signifies increased demand for limited resources like water, as well as increased demand for disinfectant used for hand cleaning and sanitization, with additional costs to society, particularly where access is not straightforward.

The COVID-19 pandemic has affected people differently based on their age, gender, ability or disability, sexual orientation, health status, migrant status, and ethnicity, among other aspects. Crises exacerbate existing gender inequalities, exclusion, and discriminative practices, and vulnerable groups are likely to be more adversely affected by the outbreak and the consequences of the response.

Emerging evidence on the impact of COVID-19 suggests that women’s economic and productive lives have been affected disproportionately by comparison with men. This is because women earn less, save less, and are more likely to be employed in the informal sector. Their capacity to absorb economic shocks is therefore less than that of men. Women are also the majority of the frontline healthcare workforce and caregivers, putting them at higher risk. Cultural factors may restrict women’s access to information and services, and some women may be particularly affected, e.g. older women living alone, and isolation may lead to an increased risk of violence in the home.

Young people are already among the most affected by the socio-economic impacts of COVID-19. In addition to losing employment, the closure of businesses, and the need to keep away from schools and universities, youth are also at high risk of increased anxiety and mental health problems. Additionally, youth make up more than 30% of the migrant and refugee population who are likely disproportionately affected due to limited movement and fewer employment opportunities caused by the pandemic. Young women and girls are also at high risk of many forms of domestic and gender-based violence during the pandemic.

Persons with disability have been left without vital support and advocacy due to social distancing. The majority of PWD in SUED municipalities operate small businesses in market centres, which have been adversely affected therefore they have experienced loss of livelihood. For PWD that rely on their hands for walking and are sole breadwinners, the question of not touching surfaces is not applicable and they therefore are at high risk of being infected with COVID-19.

Street families are also highly exposed to the danger of the virus because they lack shelter. Many of them rely on market centres where they ferry goods for a wage, and with the closure of markets they have lost livelihoods.

1.6.1 COVID-19 Impacts in Lamu Municipality

Business surveys and engagement with local stakeholders revealed that COVID-19 has had an impact on the local economy. During the worst months, mainly from March to August 2020, there was a drop in sales and commercial activity with some businesses forced to close down. The local economy largely depends on tourism and the lack of international tourists impacted the sector on a large scale. Regional tourists from the rest of Kenya, e.g. Nairobi, still travel to Lamu for the tourist offering. However, they tend to have lower budgets and therefore spend less on artisan goods such as Lamu hats and craft-ware. The hotel industry has continued to operate due to increased numbers of local tourists to Lamu.

The education sector was also significantly hit by COVID-19, with schools having to shut and students not being able to complete their study programmes. Once schools re-opened, there was lower demand due to parents being hit by hardship caused by COVID-19, and so not being able to afford to send their children away for education.

An overarching theme of the pandemic has been low income for the businesses of Lamu, this caused many businesses to cut staff numbers and limit trading hours in order to stay in business. However, most have a positive outlook for the future, especially with borders now being reopened and the vaccination programme underway.

1.6.2 Lessons from COVID-19

Drawing upon the lessons learned from the current COVID-19 crisis, these have informed the proposed development framework (section 3) and Sector Action Plans (section 4) to ensure long-term planning, green recovery and resilience is embedded in the UEP. This is an opportunity to get insights into a future fully-fledged climate change crisis and LM has a critical role to play in addressing these challenges. Some initial key lessons include:

> Emphasising the need for adaptive, urban integrated plans to ensure sustainable urban development and infrastructure provision, including appropriate housing for all that can help minimise impact from high risks; > Redefining green spaces and the way town centres are designed for business; > Strengthening preparedness and emergency response capacity is critical. This means better preparedness in terms of financing, service delivery and business continuity, including budgeting for future crises, emergency operations centres, capacity building, drills, and human resources redeployment plans; > Prioritising policies to confront spatial, social and economic exclusion with the aim of cushioning the vulnerable in the face of another shock; > Continuing to mobilise and empower women, youth, and other vulnerable groups by creating new employment opportunities and engaging them in economic activities through technical support and financing; > Ensuring resilient supply chains for agricultural, fisheries and manufacturing sectors focusing on local inputs to ensure food security, and safeguard export-oriented products; > Improving marketing efficiency through the adoption of innovative processes that connect buyers and sellers.

This may include the adoption of technology to promote marketing and information sharing, formalizing product delivery services etc; > Leveraging information technology (IT) systems to better-match the required transport demand with excess supply in real time and provide travel pattern visibility, helping passenger and logistics operations become nimbler in considering a quickly-evolving context; and > Making sure public awareness campaigns are consistently available to all in a format and language understandable to all.

1.7 Structure of this Report

Following this introduction, the report is structured as follows:

> Section 2 provides a summary of key findings from the

Diagnostics Report, which forms the baseline for the development of the UEP. Summaries of the planning context, the demographic and economic profiles and the infrastructure and environmental assessments are presented. The section details the key challenges and drivers for growth, identifying LMs’ key sectors. > Section 3 introduces the LM development framework and how it aligns to existing planning documents and the development priorities of Blue Economy potential,

LAPSSET potential and the overall UEP spatial strategy.

It is supported by the economic vision considered and developed by the local stakeholders. > Section 4 set outs the Economic Development Plan.

Each of the key economic sectors is presented with a summary of the SWOT analysis and a Sector Action Plan alongside the proposed climate resilient infrastructure projects. The priority Value Chain (VC) projects are also set out in detail. > Section 5 presents a range of implementation considerations to support the next stages of the SUED programme and the Blue Economy roadmap. The report is supported by a series of appendices and an annex, in which:

UEP list of references

Appendix A - Lamu Municipality Diagnostic Report

The purpose of the report is to assess the current position of the economy and state of infrastructure, alongside the regional, national and international context, before the consideration of emerging economic growth opportunities and infrastructure needs.

Appendix B - Lamu Municipality Technical Briefing Paper

This captures the process followed from identification to assessment of growth opportunities for LM and provides recommendations on those with the greatest potential to maximise benefits and be developed further. The contents of this report form the backbone of the final UEP.

Appendix C - Lamu Municipality Gender and Social Inclusion Study

This study was a key part of the diagnostic process and engaged with special interest groups through interviews and focus group discussions. The study identified the groups that are excluded in socio-economic activities in LM and explored how and why they are excluded. The Study then made a series of recommendations for the SUED programme to ensure future inclusion and to address the multiple barriers (communication, physical, attitudinal and organisational) that these groups face..

Appendix D - Lamu Municipality Climate Vulnerability Assessment

This has been undertaken to outline the climate vulnerability context for the selected economic sector plans and infrastructure projects to be developed in LM.

Appendix E - Swahili Heritage Guide

2. Lamu Urban Diagnostics

Before any proposed interventions are developed it is important to understand the local development context and potential opportunities and barriers to growth. The Municipality’s assessment has been undertaken in the UEP diagnostic process, as presented in Appendix A.

The diagnostics phase was a critical process to establish a foundation for identifying solutions that can deliver economic, social and environmental benefits. This section provides a summary of the diagnostic report’s assessment of:

> LMs’ planning and regional context, its socio-economic profile, with urban and economic conditions and trends; > The state of existing infrastructure; > Environmental and climate risks; and > Barriers and drivers for growth.