Navigating Growth by Understanding the 4.8% Agricultural Expansion in Kenya

Let’s talk numbers, shall we?

40% – The working population employed in Kenya’s agricultural sector. This includes 70pc of the rural population both contributing significantly to the nation’s food basket and, as the cornerstone of the economy, the overall GDP growth.

4.8% – The reported average growth of the agricultural sector in recent years due to notable resilience and expansion.

US$1.2 billion – Projected import value of agricultural produce for 2025 with an annual growth rate of 6.71pc.

US$327.9 million – Projected export value of agricultural produce in 2025 with an annual growth rate of 3.4pc.

What do these numbers say about Kenya’s farming community and what the future holds for the sector and the overall economy? What are the factors that will influence continued growth and expansion of agriculture in Kenya in 2025 and beyond?   

Agricultural Growth in Kenya

A survey carried out by the Central Bank of Kenya in 2024 among stakeholders and analysts in the agricultural sector indicated that in 2025, the domestic economic growth is expected to be fueled by lower inflation, a stable shilling, and favorable weather conditions that are set to boost agricultural output. And that there are high expectations of increased agricultural export to developed markets this year as the global economic environment stabilizes.

In the post-Covid era since 2021, the sector has shown the dynamism and potential to continue to rebound, grow, and contribute to the economy. Some of the factors that have contributed to this growth are such as:

1. Favorable weather conditions: The annual projected long and short rain seasons and suitable temperatures have made agricultural productivity consistent by enabling farmers to plan their crops, supported the countrywide crop cycle, and boosted livestock production. This has led to increased yields and the overall sector’s upward trajectory.
2. Government programs and initiatives: The government of Kenya has initiated and sponsored programs and policies aimed at supporting and boosting the agricultural sector. Initiatives led by the State Department of Agriculture and Livestock Development such as the subsidized fertilizers program of 2022, building dams in semi-arid and arid areas like Eastern Kenya, sponsoring agricultural events for farmers and stakeholders to showcase and market their products and promote modern farming techniques, investing in irrigation infrastructure like dams around the country are among ways that the government’s support has been crucial in the agricultural sector expansion in recent years.
3. Technology Solutions: New technologies and farming techniques have emerged that boost productivity for farmers in both crop and livestock farming. Solutions such as improved and hybrid seed varieties that are drought and disease resistant, precision farming techniques that cut production costs, are risk averse and increase yields, and technologies like mobile-based farmers information services, have all played a role in high productivity and expansion in the sector.
4. Market access: An expanded domestic and international market for Kenyan agricultural products like vegetables, coffee, tea, horticulture products, beef, etc., have increased projections and revenue growth for local farmers to be able to reinvest in their farms and overall increase production. Meru farmers have been able to meet the demand for miraa (Catha edulis forsk) to the Somalia market up north in recent years. It is estimated that Kenya exports 50 tons of miraa to Somalia daily, which has grown by 76pc since the trade was capped and the cap lifted. The market was estimated to be worth a record Sh.11.4 billion in the first six months of 2023.

Agriculture is the Cornerstone of the Economy

The agricultural sector is one of the key contributors to Kenya’s GDP and overall economic growth. Therefore, the expansion of the agricultural sector is directly proportional to the growth of Kenya’s economy. And how is the sector expected to continue with its contribution to the economy in 2025?

• Food Secure: With a population of 57 million as of January 2025 and a population density of 101 per Km squared and with 31pc of the population living in urban areas, our dependence on agriculture cannot be overemphasized. The sector remains the stronghold of not just the economy but wellbeing of the people as the primary source of food for the population. The agricultural sector’s growth and expansion does ensure the supply of food that remains not just a contributor to food security, but also national security and economic expansion.

• Top Employer: The median age in Kenya is 20.0 years with a life expectancy of 63 years. The average person’s work-life is between the ages of 20 and 63 years of age. The two main employers in Kenya are the public and the private sector. Agriculture is categorized in the private sector and projected to continue being a major employer in Kenya in 2025. The 4.8pc expansion will mean providing livelihoods for a significant portion of the population both in the urban and the rural areas. So far, 70pc of the rural working population are earning a living through the sector as expansion is expected to create more job opportunities that will play a role in poverty reduction.
• GDP Contributor: Kenya’s Gross Domestic Product in 2023 was US$1,949.90 and the agricultural sector topped the list of contributors with 21.3pc. Being the largest contributor in Q2 of 2024, it added Sh.1.03 trillion to the economy. Other contributors to the GDP in 2023 were industry (17.12pc) and services (55.47pc). The availability of land, expertise and funding initiatives from both the government and private institutions has made the sector’s expansion inevitable as the demand for labor and new interests increases.
• Top Forex Earners: As mentioned in the introduction already, the export value of Kenya’s agriculture products is currently estimated at US$327.9 million and is expected to grow by an average 3.4pc annually. Major export produce such as vegetables, miraa, tea, coffee, and horticultural products and flora have earned the country foreign exchange which have boosted the country’s foreign reserves, balance of payments, and overall economic stability.

Agri-Jobs4Youth Kenya Initiative

The Agri-Jobs4Youth is an initiative started with the collaboration between the German Ministry of Economic Cooperation and Development and GIZ together with the State Department of Agriculture. The initiative is aimed at drawing the youth toward embracing agriculture as a source of livelihood and a platform for innovation and economic empowerment. The goal is to have them reimagine agriculture as a sustainable and reliable career and business venture.

The initiative has targeted western Kenya’s rich agricultural potential beaming with available land, favorable weather patterns and unlimited human resources in the form of young, educated and energetic youth population.

The beautiful lakeside City of Kisumu has not been left out of the potential of Agri-Jobs4Youth Kenya. An organization called Kisumu Young Agripreneurs is committed to capacity building youths engaged in farming activities including training them on the latest farming techniques and connecting them to various markets to sell their produce. The organization has formed partnerships with the national government and the German NGO Germany Agency for International Cooperation. They have trained over 3,000 farmers with over 2,300 already running their own agribusiness ventures and producing crops such as: African leafy vegetables, fish, and seedlings of all varieties.

The organization advocates for agroecology farming practices which aim to ensure food safety and low farming costs. Examples of agroecology farming are: greenhouses and teaching farmers how to produce their own organic fertilizers which drastically reduce the overall planting budget.

Special Mention of the Challenges of Farming in Kenya

It’s not all sunshine and rainbows in the sector. Major challenges do exist that interfere with the goals of the local farmer while convincing some of them to throw in the towel against their self and family’s interests. In Kenya, some of the challenges that need to be addressed in the sector to ensure the 4.8pc expansion is sustainable and grows even higher in the coming years are such as:

• Climate change

The worldwide phenomenon of climate change has in recent years threatened the agricultural sector with major infrastructure damage and farm produce and asset losses that will take a lot to restore and reclaim. Floods have damaged access roads that farmers use to transport their produce to the markets, swept away top soils and exposed farmlands to soil erosion, damaged crops due to excess water supply and caused landslides that have tragically led to the loss of lives in farming communities around the country.

Abnormal drought patterns have not been as extensive in Kenya, but in other countries in the region of East Africa, it has caused crop delays, food shortage that leads to reliance on expensive imports and in extreme cases led to famine that have required the intervention of the United Nations agencies like the World Food Program. Adapting to the threats of climate change through sensitization and training on mitigation strategies will be key to the goals of agricultural expansion in 2025.

• Expensive Input Costs

The most used inputs in Kenya’s agricultural sector are organic fertilizers, seeds, pesticides and herbicides. These have traditionally been part of the cultivation process but have in recent years been a hindrance to growth for the local farmer due to high taxation and costs. Fertilizer use is critical for planting and top dressing while pesticides are used to control various crop diseases at various stages if the cycle.

The main challenge with inputs is today’s high costs of seeds, pesticides and fertilizer despite the ongoing government subsidized fertilizer program that is aimed at lessening the farmers’ budget and encouraging the use of fertilizer to boost the harvest.

• Other Challenges include: High transport costs due to high fuel costs and poor roads; labor costs due to high wage demands and the rise in the cost of living; market demands especially for export produce that keeps changing due to fundamental events like the recent COVID pandemic, and many others.

Sector Expansion in 2025 and Beyond

Looking ahead and around the agricultural sector, are we guaranteed safety in the 4.8pc expansion outlook in 2025? Admittedly, it is a generally positive outlook that projects expected continued growth. The sector has been part of our economic culture since the 1950s and has enjoyed political goodwill since the first post-independence administration. Kenya has 5.8 million hectares of arable land covering 10.19pc of the country’s land area, plenty of water resources and good rainfall, the median age of 20 years means the population is youthful, ambitious, and energetic. Yet all this positive outlook cannot translate into positive results of increased yields, surplus food, and a robust economy if the government and other stakeholders are not fully vested in making the sector better.

The agricultural sector needs both the government, the private sector, the non-governmental sector and the local farmers to safeguard the sector by playing their roles with integrity and tunnel vision. That is the best way to guarantee the 4.8pc expansion and upward curve to sustain.

That and other key priorities for the stakeholders in 2025 should include:

• More Investment in climate-smart agriculture: CSA can be applied to promote climate-resilient farming practices, such as hybrid seeds, drip irrigation systems as water conservation techniques, solar panels for energy conservation in livestock rearing and other practices to counter the impacts of climate change.

• Investment in R&D: Investing in research for new solutions, innovative practices, improved soil nutrients and soil health, and better seed varieties are all the more essential in today’s demanding produce markets for improving productivity and competitiveness.
• Farmers’ access to finance: Engaging financial institutions to cater for the needs of farmers should be a priority for all stakeholders. Access to credit, market information, and financial services for both large scale and smallholder farmers will enable more investment, productivity, and expansion in the sector.
• Scaling up the value chain: The agricultural value chain in Kenya has been boosted by access to information through new technologies and exposure which has proved that promoting value addition will create new market opportunities for farmers and ensure the 4.8pc expansion remain consistent in the reality of the current markets.

It is upon all stakeholder in the sector to carry this mantle to address the areas affecting them in order for Kenya to unlock its agricultural sector’s full potential. The results will ensure food security and national security, creating jobs, and drive economic growth higher. The 4.8pc agricultural expansion is positive news as we enter the halfway mark of the decade in 2025. And with continued commitment, the sky will be the limit for even greater accomplishments for Kenya in the coming years.