KENYA: Country Profile

Kenya is easily the most diversified commercial agricultural sector in East Africa, with 87 different types of agricultural products. It’s location on the equator, along the Indian ocean coastline and at the heart of Africa, has resulted in its diverse agroecological zones and its natural positioning as a trade and financial hub in the East African region.


Over the last decade, Kenya has maintained impressive economic growth of 5.85 per cent. The country’s nominal gross domestic product (GDP) is estimated to have touched Ksh10.3 trillion ($95.2 billion).

A stable macro economy, a well-educated population and diversified revenue options have ensured that Kenya continues to enjoy steady growth. Despite a significant pick-up in the services sector, agriculture is still the mainstay of Kenya’s economy, contributing over 30 per cent of GDP. Additionally, 85 per cent of households rely on this sector for at least one-third of their income. Census data shows that as at the end of 2019, more than half of Kenya’s households grew crops or kept livestock for a living.


Over the last decade, Kenya has maintained impressive economic growth of 5.85 per cent.

The country imports relatively little of its staple crops, as the sector is able to meet much of both consumer and commercial demand for agricultural produce. Total agricultural land operated by households stood at 10.3 million hectares, equivalent to 17.5 per cent of the total land area in the country. Coffee, tea and pyrethrum are some of Kenya’s main foreign exchange earners, besides tourism and, increasingly, diaspora remittances. Sugarcane and maize collectively contribute almost 43 per cent to the country’s crop production by volume. A big chunk of Kenya’s agriculture is subsistence. However, the coffee sector is easily the single most diversified commercial agricultural industry, and not just in Kenya but in other East African countries as well. Just under 20 per cent of Kenyan land is able to generate high yields.



Lower yielding (and lower altitude) semi-arid and arid lands dominate the north, east and southern parts of the country, where pastoralism is more prevalent, with the exception of the coastal region. Health campaigns have led to a decrease in undernutrition to 4.2 per cent from 35 per cent a decade ago. Improvements in irrigation techniques and services have helped both increase arable land and make a wider variety of products available across the country. Faster internet connection and cutting-edge e-payment services, like M-Pesa, are transforming Kenya’s rural agribusiness sector.



The recently launched National Agriculture Investment Plan (NAIP), which is working across eight ministries as well as the private and civic sectors, has culminated in the establishment of an Agricultural Transformation Office (ATO), which will coordinate transformation efforts. Part of the Big Four Agenda, the NAIP 2019-2024 details the actions that will ensure the achievement of the goals of the first five years of the 10-year Agriculture Sector Transformation and Growth Strategy (ASTGS). The strategy covers small-scale farmer incomes, agricultural output, value addition and household food resilience.


Kenya’s industrialisation ambitions, which are captured in its long-term development blueprint Vision 2030, are staked on enhanced value-addition of most of its agricultural produce. Like many other African countries, Kenya faces the dual challenge of making a food system resilient to climate change while also expanding it to feed and employ a largely young population that is forecast to double to almost 95 million by 2050. Moreover, the country’s yield has not been growing at par with that of its peers, with the World Bank estimating that Kenya’s growth of total factor productivity (TFP) – or the portion of output not explained by the number of inputs used in products, such as seeds, fertiliser and labour – lags behind that of Rwanda, Ethiopia and Tanzania.



However, as part of its plan to turn around the economic fortunes of the country that have been disrupted by the Covid-19 pandemic, Kenya will be relying on initiatives that guarantee food security and nutrition for all. It aims to achieve this through the expansion of food production and supply, reduction of food prices to ensure affordability, and to support value addition in the food processing value chain. Increased food output will be anchored on enhancing large-scale production, boosting smallholder productivity and reducing the cost of food.



Agri-Finance

Agriculture is risky business. Over the last five years, Kenyan farmers and agribusinesses have had to weather severe droughts and floods.

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Horticulture

Horticulture is one of the most dynamic sectors of Kenya’s economy, currently contributing a third of the value of agricultural output.

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Aquaculture

Kenya is home to freshwater lakes spanning 13,600km and a marine coastal area of 67,500km.

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impact areas