Investors looking to make money from the counties should bet on horticulture, services and value addition, an inaugural survey released by the Kenya Bureau of Statistics (KNBS) has shown.
The inaugural Gross County Product (GCP) report broke down Kenya’s economic activities in the devolved units with a view to helping planners channel resources to sectors with the greatest need, as well as those with the highest promise for quick returns.
Among the key findings was that counties with high agricultural potential, especially for horticulture, stand higher chances of growing faster, meaning rural counties are likely to catch up with urban ones over time.
Another finding was that diversification is key in rural counties that lack services and manufacturing — the foundation for growth in urban areas.
Consequently, seven counties — Nakuru, Nyandarua, Kiambu, Elgeyo-Marakwet, Meru, Narok and Bomet — are great bets for investors, given their agricultural potential and cosmopolitan nature.
“Counties such as Nakuru, Kiambu, Meru, Bungoma, Kakamega and Nyeri have potential in agriculture and services. The services sector is broadly significant in many counties, but with a scope for expansion in north eastern counties,” the report notes.
Agriculture and services account for the largest share of economic activities in all the counties except Nairobi and Mombasa, which are predominantly service driven.
As a result, the contribution of wealth from agricultural counties to the national basket has been rising consistently since 2013 while those of urban counties have been declining.
Agriculture remains a key driver of growth in most counties despite problems such as drought, reduced credit and interference by cartels, beating industrial activities such as manufacturing, according to KNBS.
Nairobi’s contribution to the GCP dropped from 23.5 percent in 2013 to 19.8 percent in 2017, while Mombasa’s dropped from 4.8 percent to 4.4 percent over the same period.
That of Machakos dipped from 3.4 percent to 3.1 percent while Kisumu’s declined from 3.2 percent to 2.6 percent.
KNBS lists Nakuru, Nyandarua, Kiambu, Elgeyo-Marakwet, Meru, Narok, and Bomet as counties with huge agricultural potential.
Nakuru’s GCP grew from 5.4 percent in 2013 to 6.9 percent in 2017, while Elgeyo-Marakwet’s rose from 1.3 percent to 2.1 percent.
“For example, Nyandarua and Elgeyo-Marakwet rank high by virtue of their high contribution to agriculture, which is the mainstay of Kenya’s economy,” the report says.
The KNBS says opportunities for industrial development remain untapped in counties like Lamu, Samburu, Isiolo, Tana River, Elgeyo-Marakwet and Baringo.
Counties with potential for agriculture and services — like Nakuru, Kiambu, Meru, Bungoma, Kakamega and Nyeri — are likely to grow their GCP faster.
Last year, KNBS released its annual statistical abstract on the agricultural potential of counties based on the amount of arable land and water available.
Kericho, Migori, Homa Bay and Murang’a were missing from the top 10 counties with high agricultural output, despite being among the 14 counties with more than half of Kenya’s land classified as high potential by the Ministry of Agriculture.
The counties also get good annual rainfall, making them suitable for agricultural production.
Kisumu, which is among the counties with the largest surface under terrestrial waters compared with their total land mass, was flagged as low in agricultural activities, alongside Kajiado, Isiolo and Machakos.
Kenya has 3,157,000 hectares of medium-potential agricultural land, while the remaining agricultural land totalling 42,105,000 is low potential.
Agriculture still accounts for more than a third of Kenya’s gross domestic product (GDP), with the sector accounting for 34.6 percent of GDP in 2017, up from 32.1 in 2016.
Crop husbandry is a huge contributor, accounting for at 28.3 percent in 2017, up from 25.4 percent in 2016.