Agricultural Sector in Kenya
Agriculture is the mainstay of the Kenya economy with great potential for growth. It currently accounts for 24% percent of GDP. More than a third of Kenya’s agricultural produce is exported and account for about 60% of Kenya’s total exports. The vision for the agricultural sector is to be innovative, commercially oriented and modern. Agriculture offers the following investment opportunities.
1. Production Infrastructure
The country has enormous water and land resources to produce own
food. Poor infrastructure contributes significantly to low food
production and accessibility throughout the year. Massive investment
opportunities exist in the development of multipurpose dams and
irrigation infrastructure. Kenya has vast irrigation potential estimated
at 540,000 ha of which only about 105,000 ha is exploited. Feasibility
studies have already been completed for the following multipurpose dams:
High Grand Falls, Mwache multi-purpose dams, Nandi multipurpose dam,
Kiserian and Maruba dams in Machakos, Badasaa in Marsabit, Chemasusu in
in Kitui , Nzoia dams ( Upper, Middle and Lower) in Bungoma, Thwake in Makueni, Yattta in Machakos, Koru in Nyando, Magwagwa in Sondu and Mwache Dam in Kwale.
2. Market Infrastructure:
Only 10% of Kenya’s fresh agricultural produce finds its way into
regional and other global markets with most of it consumed locally.
However, due to the perishability nature of these products, producers
and marketers incur post-harvest losses ranging between 30 – 75%. This
is basically due to poor transport networks, low-value addition, lack of
storage and preservation facilities among other factors. There is,
therefore, the enormous potential for investment in post-harvest
management facilities; grains storage; cold storage facilities; value
addition; and warehouse receipts.
3. Value Addition
Potential exists for investment in value addition. This entails setting up of small to medium scale industries for value addition in several agricultural commodities including Tea, Coffee, and fruits aimed at the production of branded value-added products.
Investment Opportunities in Specific Crops
4. Sugarcane Development, Processing, and Cogeneration
Kenya Domestic production is 520,400 Metric Tons against a demand of 743,000 metric tons with a deficit of 222,600 Metric Tons, which is met through imports. Main areas of sugarcane production include South Nyanza, consolidation of Nyando sugar belt and expansion of sugar factories in Western Kenya. Potential area available is between 1,000 to 15,000 hectares of land suitable for cane development and establishment of sugar processing, especially in Busia County. Further sugarcane development potential exists in the coastal region especially south coast and the Tana delta (LAPSSET- Lamu Port South Sudan Ethiopia Transport Corridors). Tied to sugarcane development is the potential expansion of milling capacity, power alcohol production, electricity co-generation and other diversified by-products.
There are investment opportunities for increased trade and investment in Kenya tea industry in the area of tea trade and value addition. The main areas of investment in value addition include various branded teas, decaffeinated, instant, flavored, iced and specialty teas (herbal, orthodox, green, purple, white, organic) and Packaging.
Investment opportunities are in the establishment of a National Coffee Roasting and Branding Plant for the Kenya Coffee Marketing Cooperatives as well as the establishment of an Instant Coffee Processing Factory.
The cotton industry is currently being revitalized in Kenya and there
are enormous investment opportunities in research and seed production,
ginning, value addition, textile, and apparels.
Tied to this is an investment in commercial production of cotton and Cotton Gauze Factory; establishment of Cotton Gauze Manufacturing Plant, and establishment of Cotton Sanitary Towels Manufacturing Plant.
Kenya produces 110,000 Metric Tons of rice against an annual consumption of 420,000 Metric Tons, leading to a 310,000 Metric Tons deficit met through imports. The potential to invest in rice production is enormous in terms of capacity building and infrastructure development in order to boost production. Investment opportunities exist in expanding land under Rice cover, with a potential of 800,000 hectares under irrigation and 1.0 million hectares under rain-fed rice production.