KBC Channel 1

Tag: Kenya’s Economy

  • Trade Policy as a Catalyst for Agribusiness Investment in Kenya

    Trade Policy as a Catalyst for Agribusiness Investment in Kenya

    Despite being central to Kenya’s economy and contributing between 22 and 30 percent of the GDP and employing over 40 percent of the population, our Agriculture sector has not fully evolved into a modern value driven agribusiness system capable of driving large scale industrialization and sustained export growth.

    The current structure of the sector reveals both its strengths and its constraints. Kenya produces globally competitive crops and livestock products and has built strong access to European, Middle Eastern and regional African markets. However, much of this output is exported raw or semi-processed, limiting value capture, export earnings and job creation.

    Structural bottlenecks remain significant with more than 90 percent of agriculture being rain-fed, leaving production exposed to droughts and floods. Irrigation potential exceeds 1.3 million acres, yet only a fraction is fully developed. Post-harvest losses in some value chains remain high due to limited cold storage and warehousing. Smallholder farmers dominate production but often lack access to mechanization, affordable finance and structured markets.

    At the same time, Kenya continues to import products such as edible oils and certain dairy derivatives that can be competitively produced and processed locally. This mismatch between domestic production potential and value addition represents one of the country’s clearest industrial opportunities.

    Kenya’s population of over 50 million is growing, while regional integration under AfCFTA and COMESA provides access to a market of more than 1.3 billion and 400 million consumers respectively. Clearly the demand fundamentals are favourable.  With a rising demand for processed foods, dairy products, meat, cereals and packaged goods across Africa presents a strategic opportunity for Kenya to position itself as a regional processing and distribution hub.

    Capturing this opportunity will indeed require deliberate alignment between trade policy and industrial incentives. This shift requires infrastructure, capital and regulatory clarity which the government has been working to get right. As we prepare to host the Kenya International Investment Conference (KIICO 2026), this conversation takes on even greater urgency.

    On the infrastructure front, progress has been made in terms of investments in roads, rail, port and air facilities. Our Port facilities have been strengthened along logistics corridors, while air cargo capacity supports high-value exports. With nearly 90 percent of electricity generation coming from renewable sources, provision of relative energy stability for processing industries is assured. In addition, Special Economic Zones are offering structured environments for investors seeking serviced land and fiscal incentives.

    However, climate risk still remains a central constraint as recurrent droughts and floods disrupt supply chains and undermine productivity. Building resilience into agribusiness is therefore not optional. Expanding irrigation, strengthening water management, promoting drought-tolerant seed varieties and improving soil management practices will stabilize output and reduce volatility.

    Programmes such as the Kenya Climate-Smart Agriculture Project have demonstrated that improved technologies can raise yields and farmer incomes. Our next step as Government is to scale these interventions commercially. Therefore moving to the next level requires coordinated action. Specifically, irrigation expansion must accelerate, cold-chain and storage systems must be strengthened, processing capacity must be incentivized, and trade facilitation must be streamlined. In all this, climate resilience must be integrated as opposed to treating it as a stand-alone intervention.

    If Kenya succeeds in shifting from raw commodity exports to integrated, value-added and climate-resilient supply chains, it will create jobs in processing, logistics and manufacturing, increase foreign exchange earnings, reduce import dependence and deepen industrial capacity.

    Agribusiness can build Kenya’s  industrial future.

      Regina Ombam is the Principal Secretary, State Department for Trade

     

     

  • Unlocking the opportunities of Kenya’s boda boda economy

    Unlocking the opportunities of Kenya’s boda boda economy

    Each day, millions of people across Kenya rely on boda bodas to weave through traffic on the way to work, to move goods, access healthcare, and bridge the last mile. These fast, affordable motorcycle taxis power urban mobility and support economic inclusion, but they operate in a sector that remains largely informal. Many drivers navigate these roads with little training, oversight or protection.

    And yet, the sector is a critical part of Kenya’s economy, contributing over KSh 660 billion annually, which is around 4.4 percent of the country’s GDP. More than 2.5 million people depend on this sector for income. It fuels last-mile delivery, supports e-commerce, connects farms to markets, and sustains a wide network of service providers. Many drivers use motorcycle taxis to supplement other income, support families, or save for rainy days.

    The potential of Kenya’s two-wheel economy is immense, yet it remains largely untapped. This is not just about moving people from point A to B; it’s about fostering economic empowerment, enhancing urban efficiency, and creating a sustainable future for mobility. Unlocking this potential requires a multifaceted approach that goes beyond traditional views of the boda boda sector and elevates it from an informal necessity to a professionalised, respected, and thriving industry.

    The perception of boda bodas often falls short of their true value. They are not merely a last-resort mode of transport; they are the capillaries of urban and peri-urban life in Kenya. Their agility allows them to navigate congested streets and reach areas inaccessible to larger vehicles, making them indispensable for last-mile logistics and connecting communities. It is this kind of efficiency that positions them as a key solution to the growing challenges of urban sprawl and traffic congestion.

    However, this vital role is often overshadowed by concerns around safety and professionalism. Many drivers lack formal training, leading to a higher incidence of accidents. The absence of comprehensive insurance and social security nets leaves drivers vulnerable to financial hardship in case of injury or vehicle damage. Addressing these fundamental issues is paramount to building a sustainable and respected boda boda sector.

    Technology holds the key to professionalising and modernising the boda boda sector. Digital platforms can bring structure to a largely informal industry, offering tools for better organisation, improved safety, and enhanced earning opportunities. By integrating features such as transparent pricing and direct feedback mechanisms, these platforms can foster a greater sense of accountability and trust between drivers and riders.

    For instance, app-based services like Uber Boda demonstrate how technology can elevate the sector. Through such platforms, drivers must undergo background checks every year and receive training in road safety and customer service. According to the Uber Kenya Economic Impact Report, 87 percent of drivers reported that they felt safer if there was such app-based support, and riders shared similar feedback.

    Features like in-app GPS tracking, “Share My Trip,” and emergency buttons significantly enhance safety for both drivers and riders. This shift from informal arrangements to structured, app-driven operations not only provide drivers with consistent earning opportunities but also establishes clear standards, leading to a more reliable and professional service for consumers.

    The transparency in upfront pricing removes uncertainty and builds trust, changing the perception of boda bodas from an unpredictable option to a dependable mode of transport. In 2023 alone, app-based platforms enabled KSh 2.2 billion in additional income for drivers. Drivers attributed KSh 1.6 billion of that to the value of being able to choose their own schedules.

    Beyond ride-hailing, technology can also democratise access to financial services. Mobile money platforms, for example, enable flexible loan repayments and credit access for drivers, even those without formal banking histories. This financial inclusion empowers them to transition from renting to owning their motorcycles, a crucial step towards long-term economic stability and wealth creation.

    The conversation around the boda boda sector must also include its environmental impact. The adoption of electric motorcycles (e-bikes) is a game-changer, with significant cost savings for drivers due to eliminated fuel expenses and reduced maintenance. In 2024, electric motorcycles (e-bikes) accounted for more than 7 percent of new bike registrations in Kenya, up from 3.6 percent the year before. This shift is projected to create over 300,000 new jobs over the next five years.

    The rising number of registered e-bikes in Kenya is a promising sign of progress in sustainable transport. However, adoption remains uneven, especially in rural areas where charging infrastructure is still limited. To make e-mobility more inclusive, targeted investment in local assembly, service centres, and widespread charging infrastructure is essential.

    Electric mobility presents a fantastic opportunity for Kenya. Our electricity grid is powered mainly by renewable sources, hydro, geothermal, and wind, which generate a surplus every night. The wind is still blowing while we sleep! Directing this excess energy to power our transportation requirements will cut our foreign exchange needs and strengthen our balance of payments. By embracing electric mobility, we can transform our natural advantages into a cleaner, stronger, and more self-reliant Kenya.

    While technology offers powerful solutions, it cannot solve all the challenges. Issues like financial literacy, crime, lack of comprehensive insurance or legal protection remain significant hurdles.

    The path forward lies in public-private collaboration. Government bodies, civil society organisations, and businesses must work together to create an incentivising policy framework that balances formalisation with the entrepreneurial spirit of the sector. Programs that offer training in road safety, customer service, and digital tools, are crucial for professional development and instilling business discipline and financial literacy.

    Kenya has a unique opportunity to lead Africa in modernising two-wheel transport. By recognising the boda boda sector’s vital contribution, investing in its professionalisation, and embracing technological advancements, the nation can deliver safer rides, create better jobs, improve service quality, and foster cleaner cities. It is about cultivating a thriving ecosystem that respects its entrepreneurial spirit while protecting everyone on the road.

    Imran Manji is the General Manager, Head of East Africa & Head of Business Development for Africa at Uber

  • Kenya and Hungary hold the second Joint Economic and Technical Committee

    Kenya and Hungary hold the second Joint Economic and Technical Committee

    Representatives from Kenya and Hungary have concluded deliberations for the second Joint Economic and Technical Committee meeting held in Nairobi.

    Led by the Principal Secretary State Department of Trade Regina Ombam and the Hungarian State Secretary for Foreign Affairs and Trade the Tristan Azbej, the meeting intended to structure the bilateral trade and economic ties between the two countries.

    The meeting explored areas of mutual cooperation, including water management and irrigation, agricultural value addition, energy, trade and investment, high technology, and healthcare. Others include higher education, youth affairs and creative economy, culture, humanitarian assistance, and international development.

    Speaking after the meeting, PS Ombam acknowledged the long-lasting bilateral ties between Kenya and Hungary dating back to 1964.

    “We already partner in key areas of trade, investment, agriculture, education, health, and technology, among others. Today, the meeting agreed to strengthen our bilateral relations in these areas to accelerate our economic growth and create additional job opportunities, thereby elevating our Bottom-Up Economic Transformation Agenda,” said the PS.

    She added that the two nations will align their bilateral relations to the multilateral arrangements between the European Union and the East African Community.

    Echoing her remarks, the Hungarian State Secretary for Foreign Affairs and Trade, noted that there is much room for improving the trade volumes between Kenya and Hungary.

    “We are offering Hungarian technology and expert know-how in technology-intensive industries. In particular, we are already witnessing some Hungarian investments in water, irrigation, and agriculture and we expect to widen this sectoral spectrum,” explained Azbej.

    He pointed out that Hungary was also open to foreign direct investment from Kenya, citing its investment incentives, highly skilled labor force, and access to the European Union market under the Kenya-EU Economic Partnership Agreement.

    Today’s meeting followed the successful initial meeting held virtually in 2024. Last year, trade between the two nations reached USD 20 million, rising 30 percent from the previous year.

  • Agriculture key to Kenya’s security and economic growth

    Agriculture key to Kenya’s security and economic growth

    Kakuzi Plc has emphasized the importance of sustained collaboration between policymakers and public sector stakeholders to drive agricultural growth.

    During a visit by Military Officers from the Joint Command and Staff College (JCSC) in Karen to Kakuzi’s avocado, macadamia, and livestock facilities in Murang’a County, Managing Director Chris Flowers highlighted agriculture’s pivotal role in Kenya’s economy and national security.

    “The role of the agriculture sector in Kenya’s economy cannot be understated as it plays a crucial national security catalyst that ultimately fosters economic and social growth. Available data, including the National Economic Survey 2024, indicate that agriculture is the dominant economic sector, which accords it the relevant strategic privilege,” Flowers said.

    “The agribusiness sub-sector is also growing and has emerged as a very strategic sub-sector with earnings from fresh horticultural exports increasing from KSh 146.1 billion in 2022 to KSh 147.2 billion in 2023. The volume of exported fruits increased by 44.1 per cent to 188.1 thousand tonnes while that of exported vegetables more than doubled to 147.7 thousand tonnes in 2023.” He added.

    Kakuzi reported a 35% half-year turnover growth to KSh 1.175 billion, with avocado revenues surging 42% to KSh 951 million. Macadamia earnings also rebounded, posting a KSh 32 million profit compared to a KSh 329 million loss in 2023. Sustainable wood products saw a 54% profit increase to KSh 71 million.

    Major General Eric Kinuthia, JCSC Commandant, led the delegation, which included officers from 16 countries. The visit aimed to deepen understanding of agriculture’s strategic role in national development and security. Established in 1983, JCSC trains Kenya Defence Forces officers and international counterparts for advanced command and staff roles.

     

  • DP Rigathi Gachagua assures Kenyans that 2024 will be a better year

    DP Rigathi Gachagua assures Kenyans that 2024 will be a better year

    Deputy President Rigathi Gachagua has assured Kenyans that 2024 will be a better year as economic initiatives rolled out by the Government to improve their lives bear fruit.

    The Deputy President said President William Ruto has stabilised the economy despite teething challenges they faced when they took over.

    Speaking on Sunday evening in Bondeni, Nakuru East when he graced the Inter Ward Football Finals between Bondeni and Pyrethrum football teams sponsored by Nakuru East MP David Gikaria, the DP acknowledged the tough economic times, Kenyans had faced but gave an assurance of better times ahead as programmes initiated by the government bear fruit.

    “The President has been working day and night this year to get the economy out of the woods. The economy is now doing well and in the coming year 2024, the economy will be stable and ready for an upward trajectory,” said Mr Gachagua.

    The Deputy President cited numerous development programmes, including the fertiliser subsidy programme that has benefitted thousands of farmers across the country leading to improved farm production in 2023. He also said the affordable housing programme that will benefit thousands of Kenyans was on course, saying many youths had been employed in various sites, including in Nakuru.

    “The affordable housing constructed in Bondeni just a few meters from here (Kamukunji Grounds) has seen many youth in this area get jobs. The President will ensure that this project goes on and more houses will be built,” Mr Gachagua said.

    The Government has also ensured that the Inua Jamii program is running and the elderly are getting their stipends without fail and on time.

    “It is our responsibility to make sure that all the elderly enjoy this program uninterrupted,” he assured.

    The Deputy President also praised Mr Gikaria for sponsoring the football tournament, saying it complemented the Talanta Hela initiative under the Ministry of Sports. He said the Government will continue to support youth-focused initiatives to tap and nurture their talents so they make a living from it.

    Pyrethrum won in post-match penalties after the game ended in a barren draw.

  • 77pc of Kenyans optimistic the economy will improve in 2024-Infotrak

    77pc of Kenyans optimistic the economy will improve in 2024-Infotrak

    In a recent survey conducted by Infotrak on the 18th and 19th of this month, 77per cent of Kenyans expressed hope for an improved economy in 2024.

    The study, encompassing respondents from all 47 counties and eight regions, highlights various aspects of optimism.

    According to the findings, 22% believe the country will witness continued development, while 13% are confident in the continuity of peace. Business prospects also contribute to positive sentiments, with 10% expecting improvement, and 8% anticipating enhanced personal finances. Additionally, 5% expressed optimism about ample food availability.

    Regional breakdowns reveal varying degrees of optimism. North Eastern leads with 53% expecting a better 2024, followed by Central Kenya at 35%. The Eastern region is third with 34%, while Rift Valley lags behind at 30%. Coastal residents stand at 26%, Western region at 24%, and Nyanza exhibits the lowest optimism at 16%.

    The survey, sampling 1,500 respondents, represents the adult Kenyan population above 18 years, with a sampling frame designed using population proportionate to size (PPS) based on the 2019 census.

    The collective sentiment paints a hopeful picture for the nation’s economic trajectory in the coming year.