A Multidimensional Analysis of the Informal Agribusiness in Kenya
Sia Z.Were
Pitzer College
Published with the African Environmental Youth Advisory on 28th June 2025
Embedded Files
A Multidimensional Analysis of the Informal Agribusiness in Kenya
Sia Z.Were
Pitzer College
Independent Study The Agricultural Sector in Kenya: EA 999
Professor Melinda Herrold-Menzies
10th December 2024
Abstract
Kenya's agricultural sector represents a complex ecosystem of economic activity, with informal Micro and Small Enterprises (MSEs) playing a critical role in national food security, economic resilience, and community sustainability. This research paper explores the intricate dynamics of informal agribusiness across three distinct Kenyan counties—Nairobi, Kilifi, and Kisumu—examining how ecological diversity, climate change, and socio-economic factors shape agricultural enterprises.
Keywords: Informal Agribusiness, Kenya, Climate Resilience, Women's Economic Empowerment, Agricultural Transformation, SWOT Analysis
A Multidimensional Analysis of the Informal Agribusiness in Kenya
Introduction
The informal agricultural sector in Kenya represents a critical economic cornerstone, employing millions and contributing significantly to national food production. Despite its
importance, this sector remains chronically underinvested, facing numerous structural challenges that impede its potential for comprehensive economic transformation. Kenya's informal agricultural sector represents a critical economic backbone (Agricultural Sector Transformation and Growth Strategy (ASTGS), 2019, employing a substantial portion of the population while simultaneously facing significant challenges related to climate change, resource constraints, and limited institutional support.
This study aims to dissect the complex interactions between ecological diversity, economic resilience, and community adaptation strategies. The informal agricultural sector in Kenya represents a critical yet marginalized economic domain, characterized by: 1). Complex socio-economic interactions; 2). High vulnerability to environmental changes; 3). Significant untapped economic potential; 4). Fundamental role in national food security. In terms of the methodological approach, this paper utilizes the Agricultural Sector Transformation and Growth Strategy (ASTGS) by the Ministry of Agriculture and Livestock Development, Kenya National Bureau of Statistics (KNBS), and County-level data to form a comprehensive SWOT analysis of the case study sites Nairobi, Kilifi, and Kisumu. Kenya's agricultural sector represents a pivotal economic domain, contributing 22.4% directly to the Gross Domestic Product and employing over 80% of the population either directly or indirectly (Ministry of Agriculture and Livestock Development, 2023). The informal Micro and Small Enterprises (MSEs) constitute the backbone of this sector, with the Kenya Ministry of 4) Industrialization defining MSEs as enterprises with less than 50 employees and annual turnovers ranging between Ksh 1-5 million (Micro and Small Enterprises Authority, 2020). This study focuses on three geographically and ecologically diverse counties—Nairobi, Kilifi, and Kisumu—to provide a nuanced understanding of Kenya's agricultural complexity. By examining these regions, the research uncovers the multifaceted challenges and opportunities within the informal agribusiness sector.
Figure 1: Image of a woman holding a recycled plastic cylindrical water gallon to water nearby plants in Nairobi City, Kenya (image credit: Sia Were).
Methodological Framework
The research employs a mixed-methods approach, utilizing secondary data from government reports, strategic plans, census data, county-level development documents and photography. The analysis is structured around the SWOT framework in accompaniment with 5 photography of the three case study sites to provide a comprehensive evaluation of the informal agricultural sector's current state and potential trajectories. According to the Kenya National Bureau of Statistics (KNBS), “Kenya Population and Housing Census Volume I: Population by County and Sub-County” (2019), the population statistics for Kilif, Kisumu, and Nairobi counties and their respective sub-counties are represented (see Figure 2). The variables include: male, female, intersex, and overall total. This illustrates the overall population in the specific counties with a gendered lens. The major reason this is crucial is that it adds another layer to this multidimensional analysis of Kenya’s informal agribusiness sector. Women are expected to be the major labourers in the agricultural sector in Kenya. Nonetheless, the data speaks for itself, men and women in terms of a population point of via the county level. In reference to, “Women and Agriculture in Rural Kenya: Role in Agricultural Production” (Onyalo, 2019): To improve women visibility in agricultural production, the author suggests that women contribution to agricultural production should be understood based on their contribution to food security in household and community rather than their contribution to commercialised agriculture which is dominated by men.
Figure 2: Compiled data from the “Kenya Population and Housing Census Volume I: Population by County and Sub-County” (Kenya National Bureau of Statistics, 2019). Source (KNBS)
SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis:
The research employs a mixed-methods approach, utilizing secondary data from a diverse range of sources to provide a comprehensive analysis of the informal agricultural sector. Data collection encompasses government reports, strategic plans, census data, county-level development documents, and photographic evidence. This multi-source approach enables a robust and nuanced understanding of the sector's complexities. The analysis is structured around the SWOT (Strengths, Weaknesses, Opportunities, Threats) framework, which provides a systematic method for evaluating the current state of the informal agricultural sector and identifying potential future trajectories. By integrating diverse data sources and applying the SWOT methodology, the research aims to offer a holistic and strategic assessment of the sector's dynamics, challenges, and potential development pathways.
1. Strengths of the Informal Agribusiness Sector
The Agricultural Marketing Strategy (2023-2032) highlights several fundamental strengths of Kenya's informal agricultural sector. These include adaptable business models, extensive geographical presence, diverse agricultural produce value chains, and existing transport infrastructure. Each county demonstrates unique strengths reflective of its ecological context. In Nairobi County, the primary strength lies in its diversified economic structure, with multiple sectors contributing to the Gross County Product (GCP).
The Financial Sector Deepening (FSD) Kenya emphasizes how this economic diversity enables continued livelihoods through informal sector dynamics (FSD Kenya, 2021). Kilifi County's strength emerges from its sophisticated agro-ecological zones, particularly in high-value product production such as cashew nuts. The County Integrated Development Plan (2018-2022) details five distinct Agro-Ecological Zones, each with unique production characteristics (County Government of Kilifi, 2018). Kisumu County demonstrates strength in indigenous chicken production, with approximately 87% of poultry comprising indigenous breeds. The county's food system strategy highlights the potential for dynamic poultry value chains and cross-border trade opportunities (Kisumu County, 2023).
Kenya’s Agro-Ecological Zones (AEZs)
The intricate mosaic of Kenya's agricultural landscape is defined by its distinctive Agro-Ecological Zones (AEZs), a sophisticated system that captures the intricate interplay between environmental conditions and agricultural opportunities. By systematically categorizing regions based on interconnected factors like climatic patterns, elevation, and soil characteristics, these zones offer a nuanced blueprint for optimizing agricultural strategies across the country's varied terrain. From verdant, high-productivity highlands to expansive arid landscapes where 8 traditional pastoralism thrives, Kenya's AEZs present a complex tapestry of agricultural potential. This comprehensive examination delves into the multifaceted nature of these ecological regions, exploring how distinctive environmental parameters shape agricultural possibilities and rural economic strategies. The research meticulously evaluates critical agro-climatic indicators, including precipitation levels, temperature variations, and topographical features, to delineate the most suitable crop and livestock interventions for each unique zone. By mapping these environmental characteristics, the study provides insights into strategic agricultural planning that can enhance food security, promote adaptive farming practices, and bolster rural community resilience.
Critically, the analysis reveals the transformative potential of AEZ-informed agricultural policies. By aligning development strategies with the inherent ecological characteristics of different regions, policymakers and agricultural professionals can optimize resource allocation, stabilize crop yields, and build a more robust, climate-responsive agricultural sector. The findings underscore the pivotal role of comprehensive ecological zoning in developing sustainable agricultural approaches. This research contributes significantly to understanding how targeted, ecologically sensitive strategies can drive agricultural innovation, support rural livelihoods, and foster adaptive responses to changing environmental conditions in Kenya.
Figure 3: Snapshot of the Kenya Agro-Ecological Zones by the Ministry of Agriculture (KilimoSTAT, 2019).
2. Weaknesses in the Informal Agricultural Sector
Despite its resilience, the sector confronts significant structural weaknesses. The Agricultural Marketing Strategy (2023-2032) identifies nine critical challenges, including inadequate infrastructure, low compliance with market requirements, limited value addition, and inefficient logistics. Nairobi County's agricultural sector contributes minimally to its economic output, with urban agriculture producing merely 20% of consumed food. The Micro and Small Enterprises Authority (2020-2024) further notes the lack of reliable MSE data as a substantial impediment (Nairobi County, 2021). Kilifi County experiences weak agricultural marketing systems, poor governance in agricultural communities, and limited extension staff support. The Agriculture Sector Transformation and Growth Strategy emphasizes farmers' constrained market access and negotiation power (Agriculture Transformation Office, 2022). Kisumu County confronts institutional challenges, including weak food system governance, low production capacities, underdeveloped post-harvest infrastructure, and poor market access (Kisumu County, 2023).
Figure 3: Image of lack of adequate space for chicken and chicks in a small stakeholder farm in rural Kenya (image credit: Sia Were).
3. Opportunities for Transformation
The Agricultural Sector Transformation and Growth Strategy identifies promising opportunities: increasing youth agricultural education, digital agricultural solutions, dietary diversification, and climate resilience building. Nairobi presents significant opportunities through a robust Information and Communication Technology (ICT) infrastructure. The Kenya Youth Agribusiness Strategy highlights potential in e-extension, data capture, and youth entrepreneurship (Kenya Youth Agribusiness Strategy, 2018). Kilifi County demonstrates opportunity through strategic projects like the Integrated Cashew Nut Value Chain Enhancement and the Galana Kulalu Irrigation Development, which aim to increase agricultural productivity and diversify income streams (National Irrigation Authority, 2022). Kisumu County's Ahero Irrigation Scheme represents a transformative opportunity, covering 4,176 acres and producing 22,000 metric tonnes of rice annually, supporting approximately 30,000 farmers (National Irrigation Authority, 2022).
4. Threats and Challenges
The sector faces multifaceted threats, including agricultural production seasonality, inadequate market research, import competition, and unfavorable taxation regimes. Nairobi confronts rapid urbanization, with population growth estimated at 9.8% annually, leading to expanded informal settlements and potential social instability (Nairobi County, 2020). Kilifi County experiences a 71.7% poverty rate and heavy reliance on rain-fed agriculture, rendering it vulnerable to climate change impacts (Kilifi County, 2024). Kisumu County reveals complex gender-related challenges, particularly in fisheries, where women face systemic exploitation and increased HIV transmission risks (Lake Region Economic Blueprint, 2017).
The Critical Contribution of Women in Agricultural Systems
Despite their substantial involvement in food production, women agricultural workers face significant systemic barriers that limit their productivity and economic potential (Onyalo, 2019). Globally, women constitute a substantial portion of the agricultural workforce, representing approximately two-fifths of agricultural labor, with percentages in Kenya ranging from the low 40s to mid-60s (Nackoney, 2022). Structural inequities create profound challenges for women farmers. Limited access to critical resources such as land ownership, financial services, professional training, and educational opportunities systematically undermines their agricultural performance. These constraints manifest in tangible disparities, including reduced farm sizes and lower crop yields compared to male agricultural producers (Nackoney, 2022).
The compounded effect of these limitations extends beyond immediate agricultural output. Women farmers are disproportionately vulnerable to environmental disruptions, particularly climate-related shifts that can dramatically impact food production and household economic stability. The intersection of gender discrimination and agricultural challenges creates a complex cycle of economic marginalization (Nackoney, 2022). By highlighting these systemic barriers, researchers and policymakers can develop targeted interventions that support women's agricultural productivity. Addressing resource access, providing targeted training, and creating more inclusive agricultural policies are essential steps toward empowering women farmers and enhancing overall agricultural sustainability (Onyalo, 2019). These structural challenges underscore the urgent need for comprehensive strategies that recognize and actively support women's pivotal role in global and local food production systems.
Climate Change Effects on Agriculture
Kenya's agricultural sector is increasingly vulnerable to the multifaceted challenges posed by climate change, with profound implications for informal Micro and Small Enterprises (MSEs) across diverse ecological zones. In Nairobi County, characterized by its urban-adjacent agricultural landscapes, climate variability manifests through unpredictable rainfall patterns and temperature fluctuations that disrupt traditional farming cycles (Nairobi City County Annual Development Plan, 2021). Urban and peri-urban farmers experience heightened stress from water scarcity and increased heat intensity, compelling small-scale producers to adopt innovative adaptation strategies.
In Kilifi County, located along the coastal region, agricultural MSEs confront distinct climate-related challenges. Rising sea levels and increased salinity intrusion threaten coastal agricultural lands, particularly those cultivating traditional crops like cassava, coconuts, and cashews. Coastal farmers report significant crop yield reductions, with some agricultural plots becoming progressively less productive due to soil degradation and saltwater contamination (Kilifi County, Annual Development Plan, 2024). The delicate balance between maritime ecosystems and agricultural production is increasingly destabilized by climate change impacts.
Kisumu County, situated in the Lake Victoria basin, experiences climate change through intensified flooding, prolonged drought periods, and erratic rainfall. Small-scale agricultural enterprises in this region are particularly susceptible to these environmental disruptions. Farmers report increasingly unpredictable agricultural seasons, with some traditional crop varieties becoming unviable (Kisumu County, 2023). The lake ecosystem's changing dynamics directly influence agricultural productivity, affecting fisheries and crop cultivation simultaneously. Across these counties, common climate change adaptation strategies among informal agricultural MSEs include:
● Diversification of crop varieties with enhanced climate resilience
● Adoption of water conservation techniques
● Implementation of small-scale irrigation systems
● Exploration of alternative agricultural practices like vertical farming and greenhouse cultivation
● Community-based knowledge sharing and collective adaptation mechanisms
The economic implications of these climate challenges are significant. Informal agricultural MSEs face increased operational risks, reduced profit margins, and potential displacement from traditional agricultural practices. Women and youth-led enterprises are particularly vulnerable, often lacking the financial resources to implement comprehensive adaptation strategies. This analysis underscores the urgent need for targeted policy interventions, financial support mechanisms, and technological innovations that can enhance the resilience of Kenya's informal agricultural sector in the face of ongoing climate transformation.
Recommendations and Conclusion
This research advocates for integrated, context-specific strategies to transform Kenya's informal agricultural sector. For example, in Kilifi County, recommendations include: Integrated farming systems combining crop production, livestock rearing, and aquaculture; comprehensive capacity-building programs; establishing value-addition facilities; developing irrigation infrastructure; promoting blue economy opportunities; supporting research and innovation; improving market access; and engaging youth in agricultural entrepreneurship.
Figure 4: The photograph shows a young man taking a break from a full day of fishing or touring tourist groups on the water (image credits: Sia Were).
The study concludes by highlighting Kenya's "escaping potential"—a paradoxical landscape of significant challenges and remarkable resilience. The informal agribusiness sector demonstrates extraordinary adaptability while simultaneously revealing structural vulnerabilities rooted in historical economic marginalization. This research has illuminated the complex and dynamic landscape of informal agricultural Micro and Small Enterprises (MSEs) in Kenya, revealing a sector simultaneously vulnerable and resilient, deeply intertwined with ecological, economic, and social transformations. The comparative analysis across Nairobi, Kilifi, and Kisumu counties demonstrates the nuanced ways in which agricultural enterprises navigate challenging environments, adapting to multifaceted pressures of climate change, urbanization, and economic uncertainty. The study's findings underscore the critical role of informal agricultural MSEs as pivotal actors in national food security and economic sustainability. These enterprises represent more than economic units; they are adaptive social systems that embody community resilience and innovative survival strategies. The diversity observed across counties highlights the heterogeneity of agricultural experiences, challenging monolithic narratives about informal sector development.
Climate change emerges as a force fundamentally reshaping agricultural practices. Each county's unique ecological context produces distinct adaptation mechanisms, from coastal saline-resistant crop strategies to urban-adjacent innovative farming techniques. These localized responses reveal the sector's remarkable capacity for strategic reconfiguration in the face of environmental challenges.
Policymakers must move beyond generic agricultural support models, instead developing strategies that recognize the unique characteristics of different regional agricultural ecosystems and the specific needs of informal MSEs.
16
Policy Recommendations:
1. Develop flexible financial instruments tailored to the risk profiles of agricultural MSEs
2. Invest in climate-resilient agricultural technologies and knowledge transfer programs
3. Create supportive regulatory frameworks that recognize the sector's complexity 4. Establish targeted capacity-building initiatives focusing on youth and women entrepreneurs
Develop comprehensive climate adaptation strategies that integrate traditional knowledge with innovative approaches. Therefore in relation to future research on this topic as this study provides significant insights, it also highlights critical areas requiring further investigation. Future research should explore: Long-term economic trajectories of informal agricultural MSEs; Technological innovation mechanisms in climate-stressed agricultural environments; Gender dynamics in agricultural adaptation strategies; Comparative studies across different regional and national contexts.
The informal agricultural sector in Kenya represents a microcosm of broader global challenges facing small-scale producers. These enterprises embody resilience, demonstrating remarkable adaptive capacities in environments characterized by uncertainty and rapid change. Their survival and potential for growth depend not just on individual entrepreneurial spirit, but on creating supportive ecosystems that recognize their fundamental importance to national economic and food security. By understanding and supporting these enterprises, we can develop more robust, flexible, and sustainable agricultural systems capable of addressing the complex challenges of the 21st century.
References
Agricultural sector transformation and growth strategy (ASTGS). (2019). In FAOLEX Database. https://www.fao.org/faolex/results/details/en/c/LEX-FAOC189053/
COUNTY GOVERNMENT OF KILIFI ANNUAL DEVELOPMENT PLAN FOR FINANCIAL YEAR 2024/2025 EMPOWERING SUSTAINABLE PROSPERITY: INTEGRATING GROWTH AND WELLBEING. (2023).
https://kilifiassembly.go.ke/images/ANNUAL%20DEVELOPMENT%20PLAN%20FY %202024_2025_submitted%20to%20_Assembly.pdf
COUNTY GOVERNMENT OF KISUMU COUNTY INTEGRATED DEVELOPMENT PLAN (2023-2027) THEME: Towards a peaceful and prosperous county. (n.d.). Retrieved December 11, 2024, from https://www.kisumu.go.ke/wp-content/uploads/KISUMU-CIDP-III-2023-2027.pdf Devolution Hub. (2017). The Lake Region Economic Blueprint. Devolution Hub. https://devolutionhub.or.ke/resource/the-lake-region-economic-blueprint
Kenya National Bureau of Statistics. (2019). VOLUME I: POPULATION BY COUNTY AND SUB-COUNTY Counting Our People for Sustainable Development and Devolution of Services REPUBLIC OF KENYA.
https://www.knbs.or.ke/wp-content/uploads/2023/09/2019-Kenya-population-and-Housin g-Census-Volume-1-Population-By-County-And-Sub-County.pdf
KilimoSTAT. (2019). Kilimo.go.ke. https://statistics.kilimo.go.ke/en/aezmap/ Kisumu county agri-nutrition implementation strategy (CANIS). (2023). https://www.advancingnutrition.org/sites/default/files/2023-10/kisumu-canis-9-12-23_ada .pdf
LAWS OF KENYA. (2012). THE MICRO AND SMALL ENTERPRISE ACT. https://faolex.fao.org/docs/pdf/ken122136.pdf
LAWS OF KENYA. (2024). LAWS OF KENYA THE TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING BILL, 2024 ARRANGEMENT OF CLAUSES PART I -PRELIMINARY. https://www.education.go.ke/sites/default/files/2024-02/Technical_and_Vocational_Educ ation_and_Training_Bill%2C_2024-29th%20Feb%2012%2011pm.pdf
Ministry of Agriculture. (2024). Kenya Agro-Ecological Zones Map. Arcgis.com. https://www.arcgis.com/apps/mapviewer/index.html?webmap=8d488b4adeab4d919c95c 708bd509514
Nackoney, J. (2022, November 21). Protecting Women Farmers from Climate Risk in Rural Kenya | SERVIR GLOBAL. Servirglobal.net.
https://servirglobal.net/news/protecting-women-farmers-climate-risk-rural-kenya NAIROBI CITY COUNTY COUNTY ANNUAL DEVELOPMENT PLAN (CADP). (2021). https://nairobiassembly.go.ke/ncca/wp-content/uploads/paperlaid/2020/ANNUAL-DDEV ELOPMENT-PLAN-2021-22.pdf
Onyalo, P. (2019). WOMEN AND AGRICULTURE IN RURAL KENYA: ROLE IN AGRICULTURAL PRODUCTION. International Journal of Humanities, Art and Social Studies (IJHAS), 4(4). https://airccse.com/ijhas/papers/4419ijhas01.pdf
SENATE BILLS. (2024). KENYA GAZETTE SUPPLEMENT. http://www.parliament.go.ke/sites/default/files/2024-10/The%20Agriculture%20Produce %20%28Minimum%20Guaranteed%20Returns%29%20Bill%2C%20No.48%20of%202 024.pdf
The Lake Region Economic Blueprint A better life The Lake Region Economic Blueprint A better life. (n.d.). https://cog.go.ke/phocadownload/reports/Lake_Basin_web.pdf
About the Author
Sia Were is an environmental expert with a focus on geological, political, and economical matters involving the energy, agricultural, and infrastructural industries. She completed an undergraduate dissertation in Environmental Science on ‘A Comparative Analysis of Geothermal Energy in Kenya and California.’ This comparative study examines the development of geothermal energy in Kenya and California. Were is also passionate about the climate change scene, thus she was part of the inaugural cohort in University of Nairobi’s African Summer School Program on Climate Change and Adaptation. She is on our team as a Junior Advisor for the African Environmental Youth Advisory
Page updated
Google Sites
Report abuse