Overview
Agriculture dominates the Kenyan economy, accounting for 40% of the overall workforce (70% of the rural workforce) and about 25% of the annual workforce. The country’s major agricultural exports are tea, coffee, cut flowers, and vegetables.
Kenya’s high rainfall areas constitute about 10% of Kenya’s arable land and produce 70% of its national commercial agricultural output. Farmers in semi-arid regions produce about 20% of the output while the arid regions account for the remaining 10% of the output. Productivity remains relatively low in all the regions due to poor incentives, and underdeveloped supporting infrastructure and institutions.
Although Kenya perennially faces supply deficits in most of its food sectors, the country continues to use instruments under COMESA and EAC agreements to limit food imports. Both agreements provide for high non-member tariffs on sensitive commodities, including meat, dairy poultry, maize, rice, wheat, and beans. Subsidies still exist in certain sectors, especially in the seed and fertilizer systems.
Specific information on agricultural sectors may be drawn from Foreign Agriculture Service’s (FAS) online Global Agricultural Information Network (GAIN). FAS publishes market briefs, an annual “Exporter Guide,” and a “Food and an Agricultural Import Regulations and Standards (FAIRS)” report for select markets. U.S. exporters of food and agricultural products, including beverages, should consult with the nearest international FAS office regarding which reports and other data it publishes for your country or region.
Contact Information
The main point of contact in Kenya for U.S. food and beverage exporters is the Office of Agricultural Affairs, located at the U.S. Embassy Nairobi. For any questions, please contact:
Phone: + 254-20-363 6340
Email: Agnairobi@usda.gov
Leading Sub-Sectors
Best sales prospects include agricultural chemicals (pesticides) and fertilizer. Kenya imports virtually all its agricultural chemicals due to lack of significant local production. Half of all pesticides imported by Kenya are fungicides, 20% are crop insecticides, 20% are herbicides, acaricides, rodenticides, and nematicides, and the remaining 10% are “other.” The most widely used fertilizer is di-ammonium phosphate (DAP). Others include nitrate potassium phosphate (NPK), single super phosphate (SSP), calcium ammonium nitrate (CAN), and urea.
Unlike many sub-Saharan African countries, Kenya’s fertilizer usage has almost doubled since the liberalization of the market in the 1990s and the removal of government price controls and import licensing quotas. The growth in usage has been noted especially among the smallholder farmers for food crops (maize, domestic horticulture) and export crops (tea, coffee). Growth in the industry is largely due to private investment and the increase of imports on the local market. The fertilizer industry has been dominated by Russia, the United States, Ukraine, China, and Romania. After blending, a small percentage of these fertilizers are exported within the region.
The GOK continues to provide fertilizer subsidies under the National Accelerated Agricultural Input Access Program (NAAIAP), which provides farm input subsidies and distributes subsidized fertilizer to small-scale farmers to reduce poverty and kick-start agricultural productivity affected by the 2007 post-election violence and inadequate rainfall. The bulk purchase of fertilizer also looks to cut out the middlemen and thus bring down the price of fertilizers and food prices.
Fertilizers are the second most counterfeited good in Kenya. U.S. exporters should expect some competition from these lower priced, inferior goods. Exporters should consider marketing the effectiveness of a genuine product in their marketing campaigns.
Opportunities
New investment in manufacturing is encouraged by the GOK, and U.S. industrial chemical manufacturers/suppliers may consider utilizing Kenya as a base for penetrating the market. The GOK is keen on setting up a fertilizer manufacturing facility as part of Vision 2030 (Kenya’s long-term development blueprint) to promote food security and lower food prices.
Additionally, opportunities exist in equipment, including irrigation technology, dryers, storage, food, and packaging processing in the maize, wheat, tea, and coffee growing seasons. There has been continued growth in the use of fertilizers to produce these commodities. Kenya’s horticulture industry is a major export success in Africa. The industry is entirely dominated by the private sector and provides many opportunities for increased importation of fertilizers, pesticides, and equipment.
In 2020, Kenya’s agriculture sector faced a large locust invasion coupled with widespread soil deficiencies. The GOK plans to educate farmers and provide information on the best fertilizers for specific regions based on soil types to improve nutrients and yields. Consultants and suppliers may find opportunities in this area.
The U.S. Commercial Service in Kenya provides support to U.S. agribusiness companies interested in exporting equipment, chemicals, and services. CS works closely with USDA’s Foreign Agriculture Service, which supports U.S. agriculture producers interested in exporting U.S. grown commodities, food, seeds, and genetic products. Lastly, USAID is responsible for implementing the President’s Feed the Future (FTF) initiative, which seeks to help farmers improve food production and weather regular cycles of drought and famine. The Kenya Investment Mechanism under USAID builds the capacity of financial institutions and business advisory service providers through training and technical assistance to facilitate private finance and investment for the working capital needs of smallholder farmers and MSMEs.
Resources
Tegemeo Institute, Egerton University
Kenya Flower Council (KFC)
Ministry of Agriculture
Kenya National Bureau of Statistics
Agrochemicals Association of Kenya (AAK)
Fresh Produce Exporters of Kenya (FPEAK)
USAID - Kenya Investment Mechanism (KIM)
For more information on the agriculture sector, please contact:
Catherine Malinda
Commercial Assistant
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254 (20) 363-6064; Catherine.Malinda@trade.gov