By George Munene
According to data from the World Bank, Kenya’s agriculture sector contracted by 1.5 per cent in the first half of 2022 despite the economy’s real gross domestic product (GDP) increasing by 6 per cent.
The 26th edition of the Kenya Economic Update (KEU) notes that poor performance of the agriculture sector which contributes almost one-fifth of GDP slowed growth by 0.3 per cent.
A recent rapid response phone survey that monitors the impact of shocks on households shows a rise in food insecurity, most severely in rural areas where over half of the households reduced their food consumption in June 2022. Most households reported an increase in prices of essential food items and with many being unable to access core staples, such as beans or maize.
“Kenya can further leverage the agriculture sector to spur growth, poverty reduction, and food security,” said Keith Hansen, World Bank Country Director for Kenya. “Boosting food resilience through community interventions in arid and semi-arid lands while supporting farmer groups to link into sustainable value chains will help to better feed Kenya during periods of drought.”
Kenya’s medium-term growth prospects remain positive with GDP projected to grow by 5.2 per cent on average in 2023–24 notwithstanding current global and domestic shocks. The baseline assumes robust growth of credit to the private sector, continued low COVID-19 infection rates, a near-term recovery in agricultural production, and high commodity prices favorable to Kenyan exports. These developments are in turn expected to catalyze private investment to support economic growth over the medium term.
The KEU recommends the need to prioritize policy options that help to raise both productivity and resilience, at the household, producer, and national levels. The special focus section of this edition delves into policy priorities to advance productivity improvements in agriculture where a large number of Kenyans remain employed and spur economic transformation and job creation through the digital economy while ensuring support for the most vulnerable households.