OPINION: Trade policy a catalyst for Agribusiness investment in Kenya

Despite being central to Kenya’s economy and contributing between 22 and 30 per cent of the GDP and employing over 40 per cent of the population, our Agriculture sector has not fully evolved into a modern value-driven agribusiness system capable of driving large-scale industrialisation 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 per cent 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. The 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 per cent of electricity generation coming from renewable sources, the 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 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 the 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.