| dc.description.abstract | Simply documenting the effects of climate variability and providing better climate forecasts to
potential users are not sufficient. This study determined the economic benefits of seasonal
rainfall forecasts over Kenya for the periods 2001 to 2013. Only the two main rainfall seasons
namely March-Apri1-May (MAM) and October-November-December (ON D) were considered
The observed seasonal rainfall totals for MAM and OND for 12 stations over Kenya covering a
span of 44 years (1970 to 2013) obtained from Kenya Meteorology Services was used. The
forecast consensus map for the MAM and OND seasons for 14 years (2001 to 2013) obtained
from IGAD Climate Prediction and Applications Centre website was also used.
Bias analysis was used to determine the skills of the seasonal forecasts. The profit/loss analysis
and the effective interest rates analyses were used to determine the economic benefit of the
seasonal rainfall forecasts over Kenya. For the profit/loss analysis, the underlying assumption
was that users of the forecasts invested an initial sum of money on the first forecast apportioning
the investment across the three climatologically equip-probably. Profit/loss in the first forecast is
reinvested for the second forecast and so on to all subsequent forecasts. The effective interest
rate was calculated from the compound interest rate formulae.
In Bias analysis, for the MAM season, the below normal category was under forecasted by 1%,
the Near Normal category was over forecasted by 7% and the Above Normal category was under
forecasted by 5%. For the OND season, the Below Normal category was over forecasted by 6%,
the Near Normal category was over forecasted by 9% and the Above Normal category was under
forecasted by 15%. In the profit/Loss analysis, for the MAM season, the maximum closing
amount was recorded in Mandera with Kshs 1004.61 and the minimum closing amount was in
Nakuru with Kshs 29.31. For the OND season, the Maximum closing amount was in Nakuru
with Kshs 1312.15 and the minimum closing balance was Kshs 182.24 in Narok.
For the effective interest rate analysis, For the MAM analysis, the maximum effective interest
rate was in Narok with 15% and the lowest effective interest rate was in Mombasa with -14%.
For the OND analysis, the maximum effective interest rate was in Nakuru and Nyeri with 22%
and the minimum effective interest rate was in Narok with 5% | en_US |
