Kenya’s Agricultural Economics At A Glance

Agriculture is a major driver of economic growth in Kenya and is the dominant source of employment in the country.

The sector contributed an average 26% of the country’s Gross Domestic Product (GDP) in 2018 according to Kenya National Bureau of Statistics. The crops, livestock and fisheries sub-sectors are the main components of the sector contributing 72%, 18% and 3% of the agricultural GDP respectively. Just to get a better scope of the contributors to this; the total value of marketed production increased by 8.2% to Kshs. 446.9 Billion from Kshs. 413.3 billion in 2016, with the highest marketed production being livestock and products at Kshs. 135.6 billion, tea at Kshs. 134.8 billion and horticulture at Kshs. 114.3Billion.

The sector is also the main driver of the non-agricultural economy including manufacturing, providing inputs and markets for non-agricultural operations such as building/construction, transportation, tourism, education and other social services.

Agriculture plays a vital role in employment, poverty reduction, food Security & earning foreign exchange, among others. The sector employs over 80% of Kenya’s rural work force and provides 18% formal employment. Kenyan households that are exclusively engaged in agriculture contributed 31.4% to the reduction of rural poverty, and agriculture remains the largest income source for both poor and non-poor households in rural areas, according to the latest World Bank economic analysis.

Agriculture is also responsible for most of Kenya’s exports; 70% of the country’s exports have an agricultural focus. The country has one of the highest agricultural productivity levels in the East African Community (EAC) region.

Opportunities in Agriculture

Kenyans need to start thinking on the lines of Agro-based manufacturing. This means working towards increased value-addition and realizing prolific backwards and forward linkages along value chains.

Agri-processing presents great growth prospects. The sector enjoys a combination of active government support, favorable agro-climatic conditions, availability of low-cost farm workers and the know-how, year-round demand for certain agricultural products in international markets, and direct air connections to Europe and Middle East.

In the Food Security and Manufacturing Pillars of the Big 4 Agenda, the Government has put in place measures that seek to expand food production and supply in the country, as well as efforts towards the reduction of food prices to ensure affordability to all citizens. Under the two pillars, the government has prioritized textiles and apparel, leather products, agro-processing and construction materials. To promote agro-processing, the Government is focusing on tea, coffee, meat, sugar, dairy, fruits, and vegetables, in order to obtain more value and create an additional 200,000 jobs in the country.

Exploring opportunities in agriculture will see creation of jobs, poverty reduction, an increased intra-regional trade and the attraction of foreign direct investment. It would be vital to improve the ease of doing business and enhance partnerships.

With strategic support from all sector players, Agriculture will continue to have a central part in the hearts of Kenyans, and the Kenyan economy at large.