How Kenya can retrace its path to economic revival

**Treasury CS Njuguna Ndungu.** [Elvis Ogina, Standard]

As Kenya finds itself at a pivotal crossroads in its economic evolution, it is both a moment of introspection and an opportunity to chart a course toward a renaissance driven by the twin engines of agriculture and tourism.

These very pillars were enshrined in the ambitious Vision 2030, a blueprint that foresaw their central role in propelling our nation's growth.

I hold a steadfast belief that the path to rejuvenating our economy lies in embracing these intrinsic foundations, which have woven themselves into our national fabric and deserve renewed emphasis to rekindle the flames of prosperity.

Agriculture and agro-processing: nurturing our roots

Kenya stands on the edge of economic transformation, with its vision for 2030 firmly etched in the aspirations of its people. Within this vision, agriculture has the potential to not only revamp the nation's economy but also provide a sustainable and robust foundation for future growth.

Remarkably, Africa houses 60% of the world's arable land, a statistic that positions our nation as a central player in global agriculture. It is time to leverage this precious resource and channel our efforts into agro-processing, a strategic move that recognizes the current limitations in competing with manufacturing powerhouses like China and the United States of America.

Rather than embarking on an uphill battle in manufacturing, Kenya should harness its strengths in agriculture to nurture agro-processing industries. This shift in focus aligns with our realistic capacities, creating opportunities for growth while cultivating a sustainable edge in global markets.

Agriculture not only holds the promise of economic prosperity but also resonates with the essential need of every household – a regular income. This pursuit is the cornerstone of a thriving society, serving to uplift communities from the grassroots.

By investing in agriculture and agro-processing, we can empower households across the nation with dependable sources of income. This not only contributes to the well-being of families but also generates tax revenue for the government, fostering fiscal stability. This vision aligns with a medium-term timeline, setting the stage for a pragmatic evolution that nurtures economic vibrancy at both individual and national levels.

While we advocate for diversity in our agricultural pursuits, our strategic focus must rest on the cultivation of high-value crops and commodities that have already demonstrated their mettle in international markets.

The time-honoured tea and coffee sectors, long-standing foundations of our agricultural exports, must be rejuvenated through the infusion of cutting-edge farming techniques, value augmentation, and sustainable agricultural practices. Beyond these, our dairy and meat processing industries hold immense potential for expansion, serving to meet local demands while concurrently opening avenues for lucrative international trade.

Amid this landscape of potential, it's imperative to draw attention to the Kenya Tea Development Agency (KTDA), a quintessential example of world-class best practices in agro-processing. The KTDA, a farmer-owned organization, showcases how effective management and cooperative collaboration can elevate an entire sector. Through its intricate network, KTDA empowers smallholder tea farmers by providing them with resources, technical assistance, and access to international markets.

**Rebecca Awuor, a trader at Mbita market in Homa Bay County, arranges tomatoes for sale, on December 5, 2023.** [Peter Ochieng, Standard]

The shared ownership model ensures that farmers reap equitable benefits from their labour, contributing to the socio-economic upliftment of communities and the overall advancement of the tea industry. KTDA stands as a beacon of inspiration, demonstrating how local empowerment and strategic processing can transform agriculture into a driving force of economic growth.

Further afield, the Kenya Meat Commission (KMC) has exemplified the potential for agro-processing to create a global impact. The structure and success of KMC were emulated by the Botswana Meat Commission (BMC), which has now risen to prominence as one of the world's leading meat commissions.

This testament to Kenya's agro-processing prowess underscores the importance of benchmarking against global standards. KMC's legacy serves as a testament to how meticulous planning, efficient processing, and sustainable practices can not only elevate local industries but also serve as blueprints for international success. This cross-border recognition sheds light on Kenya's potential to be a source of expertise and innovation in agro-processing on the global stage.

Tourism: Showcasing Kenya's Natural Beauty

Beyond agriculture, the tourism sector stands as a beacon of opportunity for economic revival. Kenya boasts a unique blend of captivating wildlife, pristine beaches, and diverse cultural experiences that can make it a global tourism powerhouse. The sector's impact on employment generation cannot be overlooked. A key statistic worth noting, for every 10 tourists who visit the country, one permanent job is created.

However, it's crucial to underscore the vast untapped potential that lies within Kenya's grasp. A fascinating comparison puts this into perspective. France, a world-renowned tourist destination, welcomes a staggering 117 million tourist visits annually. In contrast, Kenya's highest-recorded tourist numbers reached 2 million in 2011. Remarkably, Kenya is approximately 5% larger than France in terms of land area. This stark juxtaposition brings to light the immense room for growth within Kenya's tourism sector.

The implications of this growth are profound, particularly when considering Kenya's demographic challenges. With approximately 5 million unemployed youth, the potential of tourism becomes more than just an economic endeavour – it transforms into a solution to a pressing societal issue.

Achieving even 50% of France's tourist numbers could potentially resolve a significant portion of Kenya's youth unemployment problem. The equation is straightforward: more tourists mean more demand for services, accommodation, and entertainment, translating to increased job opportunities for our young population.

Another intriguing aspect is the trajectory of France's tourism industry. A substantial portion of its tourist visits originate from neighbouring countries. This dynamic emphasizes the importance of regional collaboration. In Kenya's case, fostering strong ties within the East African community can significantly augment tourist inflow. As we embrace our regional partners, we tap into a vast pool of potential visitors who seek the allure of Kenya's wildlife, landscapes, and cultural diversity.

Foreign tourism aside, virtues of tourism have been particularly magnified in recent times, especially during the tumultuous era of the COVID-19 pandemic when international tourists faced vast travel restrictions. It was during this period that the significance of domestic tourism shone through.

As foreign tourists were unable to visit the country due to various limitations, the local population took the opportunity to explore their own backyard. This not only rekindled a sense of pride in our nation's natural splendour but also provided a vital lifeline to many businesses that relied on tourism. The rise of local tourism during the pandemic showcased its potential to provide a stable revenue stream, even during global crises, positioning it as a steadfast pillar of economic resilience.

**Cruise ship MS Artania docks at Mombasa port, on February 13, 2023.** [Omondi Onyango, Standard]

An intriguing facet of Kenya's landscape lies in the numerous citizens who own houses in their rural homesteads, often left unused for long stretches of time. These properties represent a latent resource that can be harnessed for economic gain. By converting these houses into Airbnb accommodations, owners can generate passive income while simultaneously promoting inter-county tourism.

This multifaceted approach addresses not only economic revitalization but also encourages the discovery of hidden gems within our nation, creating a sense of unity and shared experience among Kenyan citizens.

When it comes to foreign tourism, we must embrace our immediate neighbours in the East African community. This collaborative approach fosters a sense of solidarity among neighbouring nations while collectively strengthening the appeal of the region. By easing travel restrictions and promoting cross-border tourism, we can stimulate the flow of visitors within East Africa, providing a much-needed boost to our economies. This sense of interconnectedness contributes to the strengthening of regional ties, fostering stability and mutual growth.

While local tourism should be accessible to all segments of our society, promoting inclusivity and unity, a distinctive pricing model for foreign tourists should be implemented. By charging a premium to international visitors, we can capitalize on their tourism expenditures, fortifying our economy and funnelling these resources into the broader development of our nation.

The dual approach of revenue generation has an integral component: the preservation of our natural heritage. While it is prudent to charge top dollar for foreigners visiting our renowned national parks, this approach should not deter local citizens from experiencing their own treasures. Ensuring that entrance fees remain affordable for Kenyan citizens encourages broader engagement with our natural wonders.

Critical enablers: ICT and financial services

The resurgence of agriculture and the rekindling of tourism stand as the cornerstones of Kenya's economic revitalization. As these sectors thrive, their impact reverberates beyond their immediate domains, creating a fertile ground for the growth of ICT and financial services.

In a world driven by connectivity and innovation, the surge in agricultural productivity and the expansion of the tourism industry creates demands that can be met by technological advancements. Information and Communication Technology (ICT) is poised to be the driving force that catalyses these advancements.

From smart farming solutions to seamless online booking platforms, ICT bridges the gap between traditional practices and modern efficiency, amplifying the impact of growth in agriculture and tourism. The nexus between agriculture, tourism, and ICT sparks a chain reaction of growth that extends into the realm of financial services. The burgeoning agricultural and tourism industries invigorate the financial sector by generating a demand for banking, insurance, and investment solutions.

Financial institutions will play a pivotal role in sustaining this growth, offering tailored services to support the expansion of these sectors. Moreover, the growth in financial services will lead to a symbiotic cycle, as increased capital availability paves the way for more substantial investments in agriculture and tourism. This virtuous cycle contributes not only to the immediate financial landscape but also to long-term stability, propelling Kenya toward economic self-sufficiency and resilience.

Ultimately, Kenya's pursuit of economic revival beckons us to return to the pillars envisioned by Vision 2030. Our concerted efforts to revitalize both agriculture and tourism will pave the way for a renaissance that promises not just economic resurgence, but enduring sustainability and resilience in the face of future challenges.

It is my firm belief that this back-to-basics strategy is the compass guiding us toward a future illuminated by prosperity and a higher quality of life for all Kenyans. It is time to sow the seeds of renewal, cultivating a harvest of sustainable growth that nurtures both our people and our land.

Dr Kipngetich is Group CEO Jubilee Insurance