Agriculture and the Kenyan economy: Road to recovery

A happy woman holding raw corn cobs in a maize farm. The agricultural sector is Kenya's backbone contributor to the GDP. PHOTO/ Zafaran Photography, Via TechCrunch.
  • In Kenya, the agricultural sector comprises six subsectors: industrial crops, food crops, horticulture, livestock, fisheries and forestry. 
  • Positively transforming agriculture is crucial to growing the economy and alleviating poverty.
  • It has been said that apart from Singapore and Hong Kong, no country has been able to achieve middle-income status without transforming its agriculture. 

For a long time, agriculture has been the mainstay of Kenya’s economy, contributing about 26% of the GDP directly, another 25% indirectly, 65% of Kenya’s total exports, 18% of formal employment and 70% of the informal employment in the rural areas. 

These are statistics per the Ministry of Agriculture before the devolution of agricultural production activities following the promulgation of the new constitution. 

I suppose similar trends apply in most African countries.

In Kenya, the agricultural sector comprises six subsectors: industrial crops, food crops, horticulture, livestock, fisheries and forestry. 

The main factors of production are land, water and farmer institutions such as cooperatives and associations. 

Private companies have invested heavily in their areas of interest, such as Del Monte, Kakuzi, James Finlays and Unilever, among others.

Over time, most farmer institutions have collapsed due to myriad challenges like mismanagement, lack of succession planning and political interference.

Agriculture’s contribution

Industrial crops contribute 17% of the agricultural GDP and 55% of the total agricultural exports. 

Horticulture has recorded remarkable export-driven growth in the last decade pre-devolution, becoming the largest subsector, contributing about 33% of the agricultural GDP and 38% of the export earnings.

This overtakes tea and coffee. 

Food crops contribute about 32% of the agricultural GDP but only a paltry 0.5% of the exports. 

The livestock subsector contributes 17% of the agricultural GDP and about 7% of the exports.

Together with fisheries, the two have huge yet largely untapped growth potential.

In Kenya, the national economy’s growth is highly correlated to the growth and development of agriculture. 

In the first two decades after independence, the agricultural sector and the economy recorded the most impressive growth in Sub-Saharan Africa average rates of 6% for agriculture and 7% for the national economy. 

During this period, small-scale agriculture snowballed as the population rallied around Kenya’s founding president, Jomo Kenyatta’s call of “Turudi mashambani,” meaning let’s return to the farms! 

Several factors supported this growth. 

There was ample land, adoption of better technology such as the use of agricultural machinery, government-supported extension services and access to cash crops farming by indigenous farmers. 

Before independence, cash crops were only the preserve of white colonial farmers, especially tea and coffee. 

Agriculture post-independence

After independence, such institutions as the Kenya Tea Development Authority, Kenya Planters Cooperative Union and Kenya Cooperative Creameries were formed to spearhead tea, coffee and milk production.

They did a commendable job. 

The government further established many agricultural institutions to teach farming inputs, marketing, credit, agro-processing and many farmer cooperatives. 

The budgetary allocation for the agricultural sector during this period averaged 13% of the national budget.

This impressive growth was, however, unsustained. Between 1980 and 1990, the sector recorded an average annual growth rate of 3.5%, reducing to 1.3% during the 1990s. 

During this period, Kenya compared poorly with Tanzania at 3.2%, Uganda at 3.7% and Vietnam at 4.8%, which had all performed below Kenya previously. 

The main reasons for this poor performance were low government investment in the sector, mismanagement, virtual collapse of most agricultural institutions, negligence of agricultural extension services, and negligence of agricultural research. 

This coincided with the government’s implementation of the structural adjustment programs prescribed by the Bretton Woods institutions, which encouraged poorly sequenced privatization in the agricultural sector. 

Investment in the sector was now at its lowest, with a budgetary allocation of below 2% of the national budget.

The decline in growth started to reverse in the first half of 2000 when the average growth rate peaked at 2.4%. 

The new government’s efforts spurred growth after the 2002 elections, mainly to revive agricultural extension services and institutions and increase investments in the sector through national budgetary allocation. 

The government identified the agricultural sector as a priority in the Economic Recovery Strategy (ERS) and Strategy for Revitalizing Agriculture (SRA). 

This was vindicated in the subsequent economic growth. 

The government started investing more in the agricultural sector, increasing the budgetary allocation to an average of 4.5% of the national budget.

These gains were set back by 2007 post-election violence, the crises caused by escalating global food and fuel prices of 2008, and the financial crises of 2008/09 to the extent that the agricultural sector recorded a negative 2.5% in 2008. 

It became imperative that this downward trend be arrested quickly to put the sector back on the trajectory of 2003-2007. 

Reviving the agricultural sector is possible because the plans and institutions that spurred growth earlier are intact and can be made more efficient.

There have been recent strategies and policies geared toward revitalizing the agricultural sector. 

Some are:

The Economic Recovery Strategy for Wealth and Employment Creation 

After the 2002 general elections, the new administration, which had overwhelming public and international support, prioritized economic revival. 

Its policies focused on economic recovery. Thus, the Economic Recovery Strategy (ERS), a blueprint for setting the country back on the growth path, was launched in 2003. 

The strategy focused on economic growth, wealth creation, and employment to eradicate poverty and achieve food security. 

Previously, the focus was on poverty reduction and food security. The ERS identified agriculture as the leading productive sector for economic recovery. 

Further, it recognized reviving agricultural institutions and investment in research and extension as critical and essential for sustainable economic growth. 

This was a positive turning point for the revitalization of the agricultural sector.

The Strategy for Revitalizing Agriculture

As a response to the ERS, the government developed and launched the Strategy for Revitalizing Agriculture (SRA) in 2004. 

The strategy set out the government’s vision: To transform Kenya’s agriculture into a profitable, commercially oriented, and internationally and regionally competitive economic activity that provides high-quality, gainful employment to Kenyans

It pointed to a paradigm shift from subsistence agriculture to agriculture as a business that is profitable and commercially oriented. 

The SRA also gave policy direction and actions that needed to be taken in each agricultural sub-sector to achieve the vision.

Lessons bagged

Implementing the SRA, several valuable lessons were learned that were useful in the future. One key lesson was the need for sector coordination and a sector-wide approach to planning and implementation. 

This is important in avoiding duplication of efforts and creating synergy among relevant government departments responsible for various agricultural sub-sectors. 

Another important lesson is the role of the private sector in the agricultural industry. 

While more support and investment are required from the public sector for agriculture to grow, the private sector does production, processing, marketing, value addition, and financing. 

It has been observed that sub-sectors largely private-sector driven, such as horticulture, are resilient to external shocks and grow more rapidly. 

However, when liberalization is done where there is no critical mass and enough capacity for the private sector to grow, producers are exploited, and such sub-sectors risk collapsing.

In promoting agriculture as a commercial business, it has emerged that marketing and associated infrastructure are critical. 

Women harvesting tea leaves on a plantation in Nandi Hills Highlands. Kenya’s agricultural sector is a pillar mover of the country’s economy. PHOTO/KIT.

Cooperative Societies marketing farmers’ produce must be supported to be more efficient and effective. Other marketing infrastructure, such as wholesale and retail markets need to be established across the country. 

The Vision 2030

The ERS was a 5-year plan expiring in 2007/08 FY. 

In early 2007, the government started developing a new strategy to take over from the ERS. 

In June 2008, the Kenya Vision 2030 was launched as the new long-term development blueprint for the country. 

This strategy’s vision is: A globally competitive and prosperous country with a high quality of life by 2030.   

The strategy aims to transform Kenya into a newly industrializing, middle-income country, providing a high quality of life to all its citizens in a clean and secure environment. 

The vision is anchored on the economic, social, and political pillars.

Vision 2030 has identified agriculture as one of the key sectors to deliver the 10% annual economic growth rate envisaged under the economic pillar. 

The aim is to transform agriculture into an innovative, commercially oriented, modern sector. 

One of the action plans to achieve this is adding value to farm, livestock, and forest products before they reach the local, regional, and international markets.

The Agricultural Sector Development Strategy 2010-2030

Although much has been achieved previously, challenges still linger in achieving food security, poverty reduction, transformation of agriculture from subsistence to commercial farming and agribusiness, markets, efficient use of inputs, and agricultural credit. 

A new strategy became imperative in line with Vision 2030, leading to the development of the Agricultural Sector Development Strategy (ASDS) 2010-2020. 

This was largely implemented through the Agricultural Sector Development Strategy Program (ASDSP), which is coming to an end in November 2023. 

This strategy has been guiding the public and private sector efforts in addressing major development challenges facing the agricultural sector. 

In addition, this strategy has taken into account ongoing institutional and policy reforms, the country’s new political system and structure of government, regional and international initiatives such as the Comprehensive African Agricultural Development Program (CAADP), the UN Millennium Development Goals, and the SDGs. 

The overriding goal of the ASDS was to achieve a progressive reduction in unemployment and poverty and the food security challenge that Kenya continues to face.

The new strategy – Transformation

As already seen, agriculture is critical to the Kenyan economy. Therefore, positively transforming agriculture is crucial to growing the economy and alleviating poverty.

The new strategy, the Agricultural Sector Transformation and Growth Strategy (ASTGS) 2019-2029, has been developed with the objective of building on the gains already made towards the realization of Vision 2030.

It has been said that apart from Singapore and Hong Kong, no country has been able to achieve middle-income status without transforming its agriculture. 

In Kenya, millions of people depend on agriculture for income and food security. 

Therefore, the country’s social security and economic growth depend on enabling these people to contribute to the economy and food security in the best way possible.

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Implementation of this strategy is at the nascent stage, and we will therefore discuss it at a later date.

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Mr. Sagwe is currently the Secretary/CEO at He has extensive experience in agriculture and leadership, having served as Kisii County Executive Member for Agriculture, (2013-2017), at the county's Ministry of Roads (2017-2022) and at KTDA (1996-2010). His contact:


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