Keeping Your Business in Mind

The Kenya Business Guide Launches Sector Brief on Agriculture


The Agriculture sector holds the key to Kenya’s economic transformation despite poor performance in recent years. The sector directly influences the livelihoods of the majority of Kenyans. To accelerate wealth creation and economic development therefore, concerted policy interventions must be targeted at developing Agriculture beyond its current state. In collaboration with the Strathmore Institute of Public Policy and Governance (SIPPG), the Kenya Business Guide has developed a concise ‘sector brief’ that intends to distil the most salient aspects of the agriculture sector in Kenya as IRENE ATIENO writes.

In Summary:

  • 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% of total export revenue, with 7 out of every 10 Kenyans depending on the sector for a livelihood.
  • Achievements and focus on irrigation projects is 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, mechanisation and technology adoption for both food and cash crops.
  • With devolution signalling 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% 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 mechanisation of agricultural processes could open more sophisticated value chain opportunities for MSMEs that are economically stable and appeal to young people.

The Kenya Business Guide (KBG) today 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. The Kenya Business Guide (KBG) is an initiative that seeks to support the improvement and strengthening of the business environment in Kenya by providing access to information on key features of both the private and public sector prerequisites in the effective functioning of business.

“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.

Despite a 25% 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.

‘‘We must leverage the synergies between the agriculture and manufacturing sector to drive productivity, value-addition and employment creation in both sectors,’’ he pointed out.

The brief also notes the importance of deliberate efforts to attract the youth to the sector through value-addition and mechanization of agricultural processes that could open more sophisticated value chain opportunities for MSMEs.

“Urban Agriculture holds the key to countering youth unemployment and the negative perception of agricultural opportunities among the youth,” noted Mr. Shah.

The launch of the sector brief comes two weeks after the introduction of KBG’s new project strategy, which introduces a focus on improving access to value-added information for economic policy and private sector development.

‘‘The KBG strategy takes a holistic, full circle approach to private sector development targeting all key actors within the business environment and ensuring they have the right information to make the right decisions,’’ he concluded.

The Kenya Business Guide will periodically release sector and policy briefs, researched and developed in collaboration with Strathmore Business School.

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