Trade

Following two decades of slow performance, Kenya's economy is on the upswing, with a country growth rate climbing from 2.8 percent in 2003 to approximately six (6) percent in 2006. Kenya's Gross Domestic Product (GDP) is estimated to have been $20.77 billion in 2006, up from $ 16.1 billion in 2004.

Recent growth in the agricultural sector is one factor which has contributed to the growth of the economy. From the mid-1980's onwards, the agricultural sector experienced a decline after high growth rates of approximately 6 percent a year from 1963 to 1973 with a recorded low of -2.4 percent growth reductions in 2000. In 2003, the government launched the Economic Recovery Strategy for Wealth and Employment Creation Initiative, which included an agricultural component. By 2005 the agricultural sector had recorded a 6.7 percent growth, mainly as a result of improved earnings from the production of horticultural crops, cereals, tea, sugarcane and dairy products.

Agriculture in Kenya's Economy

Agriculture remains the engine of Kenya's economic growth, accounting for 27 percent of real GDP, 60 percent of the total earnings and 45 percent of government revenue. Some 75 percent of Kenyans are employed in the agricultural sector.

The horticultural industry is among the fastest growing agricultural sub-sectors, contributing more than 10 percent of total agricultural production and employing approximately 2.5 million people in 2005. Among the leading horticulture industry players is Home Grown which has been providing flowers and vegetables to the UK market for the last 22 years. The leading horticultural product that occupies much of this sector is the lucrative flower industry which has ranked Kenya among the leading world producers of high quality variety flowers and a modern well structured industry. More than 1 million bouquets per week end up on the shelves of UK chains such as Marks & Spencer and Tesco among others.

Agriculture Vs. Tourism Overview

	2001		2002		2003		2004		2005
Product	$	KSH	$	KSH	$	KSH	$	KSH	$	KSH
Horticultural Products	246	19	349	27.5	473	36	568	45	584	44
Coffee	95	7.5	83	6.5	83	6	88	7	131	10
Tea	439	34.5	436.5	34	435	33	549	43.5	566	43

(US$ = Million / KSH = Billion)

The main agricultural exports in this sector are tea, coffee - including Robusta and Arabica - and other horticultural products, such as beans, avocados and flowers. These are only second to tourism as the country's largest foreign exchange earner. One major coffee exporter is C. Dormans Ltd, a private company that helps small-scale coffee farmers improve quality and receive higher prices. Kenya's agricultural products have a large presence in the European Union market as well as neighboring countries within East and Central Africa.

Flowers & Fresh Produce Exports 2001-2005

	2001		2002		2003		2004		2005
Product	Tonnes	$	Tonnes	$	Tonnes	$	Tonnes	$	Tonnes	$
Flowers	44,462	122	55,875	144	65,637	210	85,911	269.5	85,647	273.5
French Beans	10,456	19	25,529	50	27,169	61.5	34,794	89	33,591	90
Avocados	14,800	8.5	11,494	5	18,519	11	17,453	10	19,423	13.5
Other Fresh Produce	20,322	28	56,305	68	55,692	96	33,806	85	32,159	97
Total	90,040	177	149,202	267.5	167,017	378	171,963	454	170,819	474

Source: Kenya customs

(US$ = Millions)

Coffee Sales & Prices

	quantity (tonnes)	price ($/kg)	Price(KSH/kg)
2003	61,224	1.29	97.88
2004	49,926	1.86	145.91
2005	47,650	2.49	188.86
2006	50,528	2.76	198.38

Source: Coffee Board of Kenya

Horticultural Exports 2001- 2005

	2001		2002		2003		2004		2005
Product	Tonnes	$	Tonnes	$	Tonnes	$	Tonnes	$	Tonnes	$
Flowers	44,462	122	55,875	144	65,637	210	85,911	270	85,647	274
Fresh Produce	45,578	54	93,327	123	101,380	184	86,052	184	80,743	182
Processed Fruit & Vegetables	96,085	58	107,759	70	139,141	89	113,941	89	119,526	116
Nuts	11,637	12	7,534	12	10,136	26	16,815	26	13,341	13
Total	197,762	246	264,494	348	316,294	568	302,720	568	299,257	584

source: Kenya Customs

(US$ = Million)

Investment Opportnities by Sector

Several investment opportunities in the industrialization of farming exist. There are ernomous opportunities other than in the horticultural produce which include among others:

Biotechnology to increase and diversify agricultural exports.
Manufacture of ethanol from maize that could help supply the growing demand for bio-fuels.
Water harvesting and storage to improve irrigation infrastructure and increase efficiency in water use.
Agro-processing which has a high growth area and is key to the success of Kenya's agriculture.

Agriculture& Forestry

	2003	2004	2005
Contribution of Agriculture to GDP(Percent *)	25.3	24.3	24.3
Major commodities Marketed
Coffee ('000 Tonnes)	61.2	49.9	47.7
Tea ('000 Tonnes)	293.7	324.6	328.5
Wheat ('000 Tonnes)	72.0	84.1	122.6
Maize('000 Tonnes)	280.5	448.5	416.2
Sugarcane (000 '000 Tonnes)	4.2	4.7	4.8
Pyrethrum Extracts (Tonnes)	106.9	41.9	16.4
Milk (000'000 Litres)	203.0	274.0	332.0

Forest Plantation Area ( '000 Ha)	125.1	132.3	132.3

Horticultural Exports ('000 Tonnes)	133.2	145.6	163.2

source: Kenya National Bureau of Statistics
* Base year=2001

Kenya Flower Industry

Kenya's horticultural sector currently ranks as one of the economy's fastest growing industries, the third largest foreign exchange earner after tourism and tea. This has been reflected in virtually year on year expansion in fruit, vegetable and flower exports, a trend that saw the industry rise by 31% in 2003 with total exports reaching 130 000 tonnes in 2003. Top on the list of fresh horticultural crops exported annually are cut flowers, French beans, runner beans, snow peas, Asian vegetables, pineapples, mangoes, tomatoes, paw paws and passion fruit.

In the agricultural sector, floriculture in Kenya is the second foreign exchange earner after tea bringing in more than $250million per annum and employing 50,000-70,000 people directly and more than 1.5 million indirectly.
The sub sector has also recorded the highest growth in volume and value of cut flowers exported every year. It has had a growth rate of 35% annually in the last 15 years. The area under roses is expected to keep increasing every year.

For more information on the Kenya flower industry

Other related links;
Kenya Flower Council
Kenyaweb.com

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