Kenya’s Economy Depends on Agriculture – Kenya Business Guide

The Kenya Business Guide (KBG) launched its first sector brief on agriculture at the Strathmore Business School. The brief contains an overview of current trends in the agriculture sector and an analysis of its projected trajectory.

Despite a 25 percent reduction in the output of Kenya’s main food crop, maize, in 2017 due to adverse weather conditions and a shrink in the overall percentage contribution of the agriculture sector to GDP, the Kenya Business Guide points to concerted efforts outlined in the upcoming Medium Term Plan 3 as a clear indication for improving prospects in the sector as a whole.

“The agriculture sector remains at the core of Kenya’s economy. Socioeconomic transformation and wealth creation will be driven by improvements in productivity and value-addition across the entire sector’s portfolio,’’ said policy economist Sahil Shah, who was appointed as the new Project Lead for the Kenya Business Guide early last month

GDP growth in the agriculture sector is about four times more effective in poverty reduction than GDP growth from other sectors. Agriculture accounts for more than 50 percent of total export revenue, with 7 out of every 10 Kenyans depending on the sector for a livelihood.

Achievements and focus on irrigation projects are well-founded and must be concretely implemented. It is imperative to realign the sector’s current concentration away from low-value subsistence farming, to value addition, mechanization and technology adoption for both food and cash crops.

With devolution signaling, a positive change in the sector, deliberate harmonization of the efforts of the County and National governments is required. Despite the sector being a key platform for job creation amongst the youth, only about 11 percent of young Kenyans are willing to take up a full-time occupation in the sector even with commercial banks’ receptiveness to providing credit for agricultural ventures.

Value-addition and mechanization of agricultural processes could open more sophisticated value chain opportunities for MSMEs that are economically stable and appeal to young people.

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