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Figure 4.1 Economic Development Plan
Figure 4.1 Economic Development Plan
ECONOMIC AMBITION
Improved agricultural resilience towards climate change Better commercialisation of agricultural produces
ACTIONS: AGRICULTURE
A1: Develop a holistic water management strategy
A2: Introduce technology to improve resilience
A3: Reduce produce waste and post-harvesting losses A4: Encourage farmers to join training centres
A5: Organise farmers into groups to share resources and services
A6: Develop a compliance framework for contract farming
Productivity and food security Prevention of soil erosion and land contamination
Restoration of habitats and ecosystems
Increased biodiversity Energy and water savings
Source: Atkins
Productivity and food security Poverty alleviation
A skilled workforce that has access to job opportunities A sustainable and attractive industrial cluster in Sagana
ACTIONS: AGRI-PROCESSING AND INDUSTRY
B1: Develop a joined-up education and training strategy B2: Plan for a green industrial park
B3: Provide access to local entrepreneurs and the local labour force
B4: An inclusive approach to industrial park development
B5: A promotion and marketing strategy for Sagana
GREEN BLUE BENEFITS
Poverty alleviation
Green jobs
Poverty alleviation and Green jobs Low carbon development
Prevention of soil contamination
Reduction in pollution
Improved air quality Energy and water savings Limited impact on biodiversity
Better living, attractiveness and trade in the Municipality Encourage a balanced polycentric development of the county Sustainable sectoral growth
ACTIONS: TRADE, SERVICES AND ECOTOURISM
C1: Improve infrastructure in Kerugoyaa and Kutus town centres C2: Develop an affordable housing policy that targets all vulnerable groups C3: An Entrepreneurship Centre to support entrepreneurs and small businesses
C4: Improve eco-tourism offer to align with Green Blue objectives
Social cohesion Recreation and amenities
Improved public health Low carbon development Cooling effects
Urban resilience
Reduction in pollution
Improved air quality Energy and water savings Social cohesion
Improved rural-urban linkages
Urban resilience Preservation of habitats and ecosystems Increased biodiversity Preservation of natural resources Green jobs Social cohesion Recreation and amenities Low carbon development
Preservation of habitats and ecosystems
4.1 Economic Sector Action Plans
Three key sectors have been identified for further assessment, with an Action Plan formulated for each sector. The Action Plans are premised on the SWOT analysis undertaken at the Diagnostics Reporting stage (Appendix A). Summaries of the SWOTs are presented below for each sector. These Action Plans have been informed through the SUED business consultation exercise (Section 1.3), workshops with local stakeholders, and data analysis.
Importantly, the Economic Sector Action Plan is design to align and support the GBD. There are clear economic benefits in developing GBI – better health and wellbeing, better water efficiency leading to higher crop yield, facilitated transportation and trade, etc. Conversely, economic development actions, if well-designed, can facilitate the development of GBI.
4.1.1 Agriculture
Agriculture is one of Kenya’s Big 4 sectoral priorities, with a crucial role in Vision 2030 development programme accounting for approximately 25% of annual GDP with a further 25% through the supply chains. Agriculture accounts for 70% of informal employment in rural areas.
The agricultural sector in KC is very strong, accounting for 41% of GCP and approximately 87% of population in KC rely on agriculture. The climate, environment, and soils currently create optimal conditions for farming which result in the County being one of the largest producers of agricultural and livestock products in the region.
The close proximity to Nairobi and other regional hubs such as Embu and Meru provide farmers with access to well-established markets to sell their produce. Rice is the main crop in the lower part of the County. A key weakness is the seasonality of the sector that affects market prices. There is also a lack of value addition in the sector, with most products being sold in their raw form.
Despite generally favourable conditions, KKM already suffers from the effects of climate variability and climate change, specifically through impacts on agricultural commodities such as coffee, and flood or drought events, and these impacts will likely increase in the future. The UEP provides an opportunity to develop climate-resilient value chains and help farmers adapt to changing conditions while preserving Kirinyaga’s strong agricultural position.
From the Diagnostic Report analysis, the following key strengths, weaknesses, opportunities and threats were established. These were used to determine the actions proposed in the following section.
Table 4.1 Trade, Services and Eco-Tourism: SWOT
Strengths
› Favourable and diverse environment for agriculture › Strategic location within the country › High-value, high potential crops such as rice (largest producer), tea, coffee, tomato, etc.
Weaknesses
› Product oversupply during the high season › High cost of farming inputs (fertilisers, etc.) › Inadequate skills and knowledge (e.g. Soil management, post-harvesting technique) › High competition between farmers
Opportunities
› Thiba River dam under construction › Industrial and agri-processing development › Collaboration and partnerships with research institutions › Improve water management by adapting and improving access to reliable water sources
Threats
› Climate change: increasing floods, droughts, rainfall, change of temperature, new pests and diseases › Rapid urbanisation putting increasing pressure on limited land available
Source: Atkins
Action Plan
Table 4.2 lists the actions to be undertaken to develop and support the agricultural sector, taking account of the Municipality’s strengths and weaknesses. Each action is then described under the table.
Table 4.2 Agriculture Action Plan
Economic ambition Action
Improved agricultural resilience towards climate change A1: Develop a holistic water management strategy in line with GBD
A2: Introduce technology to improve resilience
A3: Reduce produce waste and postharvesting losses
Better commercialisation of agricultural produces A4: Encourage farmers to join training centres
A5: Organise farmers into groups to share resources and services
A6: Develop a compliance framework for contract farming
Crops’ seasonality is a major issue for agriculture in KC. The bimodal rainfall pattern gives the potential for farmers to benefit from two harvests per year, however, changes in climate are reducing water availability and impacting on the yield of the second harvest. In addition, most farmers tend to grow the same products, creating duplication on markets. The Climate Vulnerability Assessment study (Appendix D) shows that this situation is likely to worsen over time.
Improving water capacity during the dry season would therefore allow farmers to grow a wider range of produce during this time, and in larger quantities. There are several ways to promote water harvesting: collecting run-off, improving the infiltration of rain in soils, and managing land and crops to increase water storage in soils, wetlands and the water table.15
Soil moisture can be preserved by promoting the use of organic manure that improves water retention capacity. Land management techniques such as terracing are also used to retain soil moisture. Infrastructure such as dams and ditches can channel run-off into fields. Storage systems such as ponds or tanks can also improve water reserves. Crop management techniques can help improve yields. For instance, ploughing has proven to cause the burning of soil carbon by exposing it to sun and oxygen, and is less recommended nowadays.16
With the construction of the Thiba Dam, which should have repercussions on water capacity, a green water management strategy for agriculture could be put in place to take a holistic approach about water capacities, including land management, absorption and storage, and farming practices to efficiently use water resources.
15. J. Rockstrom, M. Falkenmark (2015), Agriculture: Increase water harvesting in Africa, Nature. Accessed at: Agriculture: Increase water harvesting in Africa | Nature 16. ibid
Case Study: An overall water strategy: The Upper Tana-Nairobi Water Fund17,18
The Upper Tana River basin is critical to the Kenyan economy. It covers one of the most important agricultural areas and supplies 95% of Nairobi’s water. It is also home to areas of unique biodiversity. However, since the 1970s forests on steep hillsides and areas of wetlands have been converted to agriculture. This has resulted in various serious environmental issues. Upstream, water retention is affected, and during the rainy season the rain takes the soil and manure away, affecting crops, and putting constructions at risk. Downstream, sediments in the water reduce reservoirs’ capacity and increase the cost for water treatment, affecting Nairobi’s residents and industries.
The Water Fund is a financial mechanism to fund land-conservation measures upstream, with downstream users and donors contributing to conservation upstream.
The strategy is based on investing in GBI, using natural systems to trap sediment and regulate water. Investment planning and watershed modelling tools were used to identify key locations to implement interventions, such as:
> Vegetation buffer zones; > Agro-forestry; > Terracing of steep farmlands; > Reforestation for degraded lands at forest edges; and > Mitigation of erosion from dirt roads. Crucially, the strategy takes a holistic approach to water management and land use. For instance, crop suitability modelling allows us to understand how changes in temperature and rainfall can drive land-use change. Partners can then advise farmers on smart cropping interventions and possible alternatives for diversification, to avoid soil run-off and ensure best practice.
The scheme expects a 15% increase in annual water yields during the dry season, up to US$ 3 million per year in increased agricultural yields for smallholders and US$ 250,000 in cost savings a year from avoided filtration, lowered energy consumption and reduced sludge disposal costs. Overall, it is estimated that a US$ 10 million investment will return US$ 21.5 million in economic benefits over the 30-years’ timeframe.
17. TNC (2015), Upper Tana-Nairobi Water Fund Business Case. Version 2. The Nature Conservancy: Nairobi, Kenya 18. Thrive, Africa’s first Water Fund (2015). Accessed at: https://wle.cgiar.org/thrive/2015/03/20/africa%E2%80%99s-first-water-fund
A2: Introduce technology to improve resilience
Various technologies can improve sectoral climate resilience, these include:
> Improved crop varieties that are more resilient to climatic shocks and insufficient soil moisture. For instance, KALRO has developed a new rice variety called Komboka which requires less water and has a good tolerance of diseases.
Other crop varieties are promoted by KALRO including banana, pineapples, tomatoes, etc.; > Greenhouses, allowing to diversify production and reduce seasonality issues. Greenhouses provide better performance in terms of water and nutrient management, and protection against pests and diseases which could increase due to the changing climate; > Drip irrigation that can offer significant increases in water use efficiency compared to surface water; > Better practices for livestock including fodder production and conservation for the dry season, and the selection of more resilient breeds e.g. The Fleckvieh breed that was recently introduced in Kenya, plus enhanced feeding; > Renewable energy options such as solar energy at farm level to support small-scale activities, described in
Section 5.5.6
This action will particularly benefit SIGs, smallholder farmers, and vulnerable groups who are disproportionally affected by the impacts of climate change. Yet, it is recommended to prioritise culturally-appropriate and affordable options, or to provide financial and technical support to these groups. The incorporation of climate-smart technologies can also represent new employment opportunities for SIGs.
Case Study: More efficient use of water: solar-powered irrigation in Kenya19
The Renewable Energy and Energy Efficiency Partnership (REEEP) has developed a programme to support solar-powered irrigation systems in Kenya. REEEP selected two companies: Futurepump and SunCulture. SunCulture sells an Agro Solar Irrigation Kit which combines a solar pumping technology with a high-efficiency drip irrigation system, as well as an agronomic-based financial support model. Futurepump sells a solar powered irrigation pump only. Solar pumping can withdraw deeper groundwater compared to treadle pumping, and produce far fewer GHG emissions than petrol and diesel pumps. REEEP produced a model estimating the wealth and health benefits related to the additional yields of these technologies, also taking account of the negative impacts of additional irrigation. The model finds that over 10 years, the project can generate US$ 13 million of wealth benefits with only about US$ 150,000 investment. This is mainly due to the threefold increase in productivity resulting from better irrigation, and meaning that 95% of additional food is not required for consumption but ready for sale. In addition, the project is modelled to result in around 570 disability-adjusted life years (DALYs) among a project population of 603 individuals, representing about 3,800 DALYs per invested million USD.
19. REEEP, Case study: health, wealth and solar irrigation in Kenya (2016). Accessed at: https://www.reeep.org/sites/default/files/REEEP%20IMPAQT%20Case%20Study%20Solar%20 Irrigation%20in%20Kenya.pdf
Another drawback of seasonality is that, as most crops are harvested during the rainy season, there is an oversupply of products on markets during this period. Business surveys mentioned that much produce goes to waste as a result of this and increases in both average and maximum temperatures, as well as floods which can block roads and access to market, all of which are likely to increase problems with post-harvest losses.
Various farmers and market traders mentioned the lack of storage facilities. These are, however, particularly appropriate for grains, which account for a significant proportion of agricultural crops in the County (rice, maize, peas). Farmers and traders should be incentivised to form cooperatives to install common storage facilities, with support from the Municipality or the County. The National Cereals and Produce Board (NCPB) could be used as a model to develop post-harvesting facilities, whereby farmers pay a small membership fee to access shared warehouses.
SIGs and other marginalised groups are often excluded from storage opportunities since they lack access to information and resources. Lack of affordability is also one of the main constraints for inclusion. Consequently, it would be important to promote and include SIGs groups in this action, and to provide affordable storage facilities. Accessible infrastructure e.g., Step-free storage facilities, should be considered. In addition to storage (described in Section 5.5.5), another way to reduce waste is to transform fresh products into less perishable food. Similar to storage facilities, encouraging the development of community or commercial milling for grains and starch like potato or banana would also be beneficial. The reduction in post-harvest losses would support key livelihoods in the County and increase resilience to climate change. The UEP also proposes several VC opportunities in relation to this (see Section 4.2).
It is also recommended to design a digital communication strategy to inform farmers, and particularly target SIGs, about storage availability. This strategy should be in a format accessible to all and could also be used to divulge market information, weather issues, etc. Doing this will particularly benefit those groups who face challenges to access agricultural information. There are several examples of digital programmes and platforms that could be promoted. This includes AgriFin Accelerate, a programme that aims to increase digital access to financial and informational services for farmers; Mkulima Young, a social media platform encouraging young people to get into farming; and Wefarm, an SMS-based knowledge-sharing platform.
A4: Encourage farmers to join training centres
Poor farming and harvesting practices were noted as an issue for agriculture in the County. There are a few training centres across KC, including Kamweti Agricultural Training Centre and AHITI Ndomba for livestock. Training centres provide classes about seedling use, harvesting practices, land and water management, crop productivity improvements, livestock management practices, etc. However, the attendance at those centres is low, and there is scope to incentivise farmers to join training sessions.
If this is carried out alongside activities to support training centres in their ability to advise on climate-smart agricultural practices, there is an opportunity to drive adoption of more climate-resilient farming techniques. It is not clear whether farmers are aware of the existence and benefits they can get from training centres. A clear and well-designed communication strategy should be put in place to inform farmers about training opportunities and the benefits they can get in terms of higher yield and revenues. Given that some farmers and remote communities can have difficulties going to training centres because of transport cost or time availability, training centres should also consider going out to local communities to give day or half-day sessions. The location, timing, and length of trainings should be compatible to young women’s care and community responsibilities. Moreover, training formats and materials should be accessible to all. Local media can also be used to spread knowledge.
It is recommended to train a cohort of young people as peer educators since people are more likely to become engaged in training if they are developed by peers.20 Training a cohort of youth trainers could also represent an opportunity for additional income. This system could also be implemented with PWD.
For business development and SME support in the agricultural sector, the Entrepreneurship Centre (Action C3) can provide support regarding business development, finance, marketing, production, export, digital skills, etc. To include out-of-school youth and people with low-literacy levels, it is recommended to implement specific trainings, for example on functional literacy and numeracy. A5: ORGANISE FARMERS INTO GROUPS TO SHARE RESOURCES AND SERVICES
Various infrastructure, resources and services could be shared between farmers:
> Equipment and infrastructure that can be shared include cold storage (Section 5.5.5), storage facilities for grains and crops, farming tools, delivery vehicles, etc. Digital technologies can be used to leverage this. For instance, the platform Hello Tractor allows farmers to have access to ploughing tractors temporarily. > Resources and services that could be coordinated include the supply of agricultural input, delivery services, sharing of best practices, and marketing strategy, including price determination and branding.
Beyond the financial and non-financial benefits of these shared services and infrastructure, cooperatives can also be structured to fully engage women, PWD, and youth in agricultural development activities and decision-making.21 This needs to be accompanied by awareness sessions at the community level about the importance of including SIGs in decision-making processes.
20. See OECD (2018), The Future of Rural Youth in Developing Countries: Tapping the Potential of Local Value Chains. OECD Publishing, Paris. 21. Chiyoge B. Sifa, Role of cooperatives in agriculture in Africa, UN (2014). Accessed at: Role of cooperatives in agriculture in Africa (un.org)
For remote or excluded populations, the creation of groups can facilitate access to market information and access to finance, for example through table banking. It is recommended to promote collaboration among SIGs, and to inform them about available support and funds, such as The Youth Fund, Uwezo Fund and the Women Enterprise Fund.22
Some problems identified with shared structures include poor management, lack of capital resources, inadequate training, and lack of communication between members. This means that support must come from KKM or KC to develop those groups, in particular through
1. Formal and informal training about management and human resources 2. Support to developing commercial partnerships and joint venture with private enterprises and 3. Support to marketing and agri-processing (as per the VCs in chapter 4.2).23
Kirinyaga’s Wezesha programme, that already provides support and delivers empowerment programmes for women and youth, can play a key role in supporting community and cooperative development.
Lack of access to land is another barrier to social inclusion. Young people often access land through their parents – or spouses, in the case of young women. It is recommended to support SIGs, and SIGs groups and associations, leasing land, through cooperatives or existing government programmes. A6: DEVELOP A COMPLIANCE FRAMEWORK FOR CONTRACT FARMING
Contract farming is an arrangement whereby a buyer agrees in advance with a farmer to buy a specific quantity of a product in the future, under a set price. This also often includes support for growing the product, such as supplying input, or to provide advice or support with transportation. The main benefit for farmers is that the contract gives them the guarantee of access to a market and to sell their products at a fair price.
Farmers also learn better agricultural practices through training that the buyer, usually an agri-industrial company, tends to provide. Companies such as Twiga have been using contract farming to create a marketplace that gathers more than 4,000 farmers and 35,000 vendors across Kenya. Other examples include agro-seed companies like Kenya Seed and the East African Potato Consortium.
Compliance is often a key issue with contract farming due a limited legal framework that is in place. There have been cases of farmers breaking the deal by selling products to other buyers at a higher price as well as cases of buyers refusing to purchase at the pre-agreed price.
To ensure trust from both parties and contract compliance, an intervention from KC is needed, by developing a contract farming compliance framework. This framework would clarify the concept of contract farming to all parties and define the role that the County would play in ensuring contract compliance. KC could commit to managing negotiations between buyers and farmers, monitoring crops’ progress and ensuring contract enforcement. This framework could show potential investors some reassurance to invest in the County and would also guarantee legal and institutional support for farmers.
22. Chamasoft, Table bamking: the concept of table banking (2015). Accessed at: https://blog.chamasoft.com/table-banking-the-concept-of-table-banking/ 23. ibid
4.1.2 Agri-Processing and Industry
There is significant emphasis in developing agri-processing nationally with the aim to creating 200,000 jobs and to triple production, with the higher values on the global market as a key incentive. Kenya’s ASTGS aims to increase the contribution of agri-processing to GDP by 50%.24
The industrial sector is currently relatively limited in KKM, although it accounts for 7% of the County’s GCP. There is a small but existing industry base that mostly focuses on agri-processing. Rice milling is the main processing activity followed by tea processing, coffee processing and small-scale animal feed plant.
However, there are clear opportunities for the sector to grow, thanks to a diverse agricultural production that includes crops that have high potential to grow in demand, including rice, tomato, banana, nuts, tea, and coffee, and institutional support from KIDA. KIDA has identified key VC opportunities taking advantage of the County resources and land for industrial use at Sagana. This site benefits from its good linkages to Nairobi via the Nairobi-Nyeri highway and through railway. There is an opportunity to grant the site Special Economic Zone status, which would boost investments in the area.
The development of the industrial sector will however require careful planning, as it will impact the demand for energy, water, waste and transport infrastructure, which could impede the sector’s expansion and have a negative impact on natural resources and biodiversity.
Therefore, the sectoral action plan is based on the GBD approach described in Section 3.4 that emphasises climate change resilience and resource efficiency, taking into account the environmental impact of new assets and new activities. In addition, social inclusion should be a focus to allow vulnerable groups to have access to job opportunities.
From the Diagnostic Report analysis, the following key strengths, weaknesses, opportunities, and threats were established and reported in Table 4.3. These were used to determine the actions proposed in the following section.
24. Kenya’s Ministry of Agriculture, Livestock, Fisheries and Irrigation (2019), Agricultural Sector Transformation and Growth Strategy Table 4.3 Agri-Processing and Industry: SWOT
Strengths
› Small but existing industry base, focused on agri-processing › Agricultural products that have opportunities to upscale to processing (dairy, tomato, banana, avocado, cotton, etc.) › KIDA as an exemplary agency to promote and coordinate investments › Strategic location and transport infrastructure (Nairobi-Nyeri highway, railway station at Sagana for freight)
Weaknesses
› Shortage of land for industry and agri-processing development › Some VC opportunities are happening outside of the County › Limited solid waste and sewerage infrastructure, and risk related to water and electricity supply › Inadequate skills and knowledge (machine operation and maintenance)
Opportunities
› Agri-processing opportunities identified by KIDA › Cotton ginnery reopening in Mwea. Textile factory being developed as a social enterprise › Sagana Industrial Park is proposed as a Special Economic
Zone (SEZ) › Opportunities to improve linkages between Kirinyaga higher education facilities and agri-processing sector
Threats
› Limited land available that could drive businesses to locate elsewhere › Inadequate or low water supply to meet demand › Future demand for power due to industrialisation › Lack of drainage and flooding issues that result in impassable roads › Outdated workforce skills and gaps in skill sets
Source: Diagnostic report
Action Plan
Table 4.4 lists the actions to be undertaken to develop and support the agri-processing and industrial sector, taking account of the Municipality’s strengths and weaknesses. Each action is then described under the table.
Table 4.4 Agri-Processing and Industry Action Plan
Economic ambition Action
A skilled workforce that has access to job opportunities
A sustainable and attractive industrial cluster in Sagana B1: Develop a joined-up education and training strategy
B2: Plan for a green industrial park
B3: Provide access to local entrepreneurs and the local labour force
B4: An inclusive approach to industrial park development
B5: A promotion and marketing strategy for Sagana
A lack of skills, in particular relating to machine operation and maintenance, was identified as a challenge for businesses currently operating in the agri-processing industry. Various training programmes exist at KyU and TVET institutions. In addition, the Wezesha programme gives access to training to women, youth and vulnerable groups. However, it will be important to strengthen and coordinate these initiatives with the County’s industrial strategy, to ensure that the right skills needed by local industries are being developed.
A joined-up education and training strategy would consist of a programme of work that includes key education and employment stakeholders, such as education and training providers, KIDA and local businesses. The aim is to:
> Tailor education and training programmes based on the
County’s economic strategy. This will require to work with businesses and targeted industries to identify missing skills, so the right skill force can be developed; > Emphasise career opportunities to new applicants to encourage them to pursue training programmes that are more likely to lead to job opportunities because they correspond to needed skills; > Increase local businesses’ involvement in curriculum development, for instance by supporting teaching and providing traineeships to students; > Design on-the-job training and apprenticeship, including available training for contractual work. Local businesses would benefit from this approach: they would get a say in the content of training programmes to ensure the right skillsets are being developed, allowing them to recruit from the local labour pool. Students would also benefit, as they would develop the most accurate skills needed in the local market, which higher job prospect.
Education providers would benefit from offering more accurate training, that could be supported by businesses if they agree to provide specialised teaching or offer traineeship to some students This joined-up strategy would also help to support businesses in Sagana Green Industrial Park and ensure new job opportunities are accessible to the KC’s local workforce (as described under action B3)
Skills development must target every community group, including vulnerable and marginalised groups. This is why the Wezesha programme must also be included in the strategy so that training aligns with wider sectoral development objectives and local businesses’ need.
B2: PLAN FOR A GREEN INDUSTRIAL PARK
A green industrial park may be defined as ‘a dedicated area for industrial use that supports sustainable economic development through the integration of social, economic and environmental aspects into its design, planning, management and operations’.25 The aim is not just to increase economic performance, but also to enhance environmental performance, i.e. Better management of resources and smaller footprint of the park, and improve social performance, i.e. Better labour rights and working conditions, gender and community inclusiveness.
A key concept of a green industrial park is industrial symbiosis.26 This describes a system where, similar to a natural ecosystem, industries and organisations work in synergy to share and reuse resources by interconnecting their production lines.
It is often a case of using a production line’s waste as another production line’s input. For instance, reusing waste heat from manufacturing to supply a greenhouse for food production is an example of industrial symbiosis that limits waste and creates a circular economy. There is an opportunity to support industrial symbiosis in the VC proposed: for example, banana peels from the banana flour VC can be used as an input for animal feed production. For an industrial park to be green and sustainable, four themes must be targeted:27
> Park management performance: implement a management framework that assists tenants, monitor and report performances and assesses risks; > Environmental performance: design mechanisms and practices that improve resource efficiency and reduce pollution and support symbiosis between activities, e.g.
One industry’s waste becomes another’s input; > Social performance: develop practices that have a positive social impact, including constant improvement to workers’ conditions, such as fair pay, security, social infrastructures, and gender equality, local community outreach; > Economic performance: ensure the creation of new jobs, promote local businesses and linkages with local SMEs as described in action B3, and create economic value.
Focusing on the economic and social dimensions, several ambitions should be pursued with specific targets:
> Employment generation: the park should have plans to generate specific numbers and types of jobs including considerations on diversity and implementation of
PWD quotas. In particular, the park should provide job opportunities to the local workforce. This is the reason why there should be a closer relationship between local businesses and education providers, to help develop a workforce that has the right skillsets to work on the park.
This is further detailed under action B1; > Local business involvement: the park must be an opportunity to support local SMEs by providing new procurement contracts, knowledge sharing, and workspaces for SMEs. This is further detailed under action B4; > Inclusive park development: in order to tailor local businesses and workers’ needs, and provide opportunities locally, the park development should strongly engage local residents. This is further detailed under action B4; > Economic value creation: in order to ensure the park is successful, a robust market demand and feasibility study, supported by a business plan, should be developed at early development stages. This is detailed in section 5.2.
In the future, there is an opportunity to consider applying to SEZ status. SEZs give local businesses exemption from VAT, tax exemption or discount (e.g. Corporate tax rates), duty exemption (e.g. License fees, stamp duty), investment deduction, and work permit facilitation. A lot of work will be needed to prepare the land before the industrial cluster can be developed. This includes studies (feasibility study, environmental impact assessment, market demand analysis, etc.) which are required to obtain the SEZ status as well as land preparation (earthworks, water and energy infrastructure, etc.).
Guidelines relating to construction and development of a green industrial park are further developed in Section 5.2.3.
25. United Nations Industrial Development Organisation (UNIDO), An international framework for Eco-Industrial Parks (2021). Accessed at: An international framework for eco-industrial parks v2.0.pdf (unido.org) 26. United Nations Industrial Development Organisation (UNIDO), Implementation handbook for eco-industrial parks. (2017) 27. United Nations Industrial Development Organisation (UNIDO), An international framework for Eco-Industrial Parks (2021). Accessed at: An international framework for eco-industrial parks v2.0.pdf (unido.org)
Case Study: Collaborating to reduce waste through industrial symbiosis: Oserian Two Lakes Industrial Park, Kenya
Oserian Two Lakes Industrial Park is a new 150-hectare sustainable industrial park in Nakuru County.28 The site is expanding from a flower farm and is set to become a “Sustainable Special Economic Zone”.29 The ambition is to create a park that encourages the circular economy, renewable energy and sustainable construction. A key element in the development of the master planning is the understanding of the possible needs of new companies, to create industrial symbiosis. For instance, partners are considering a system where wastewater from industries could be treated and reused for the flower farm, hence developing a circular water system with limited waste. Energy is provided by a large geothermal plant and a 1MW solar park, allowing for cheap and reliable renewable energy.
One of the first tenants will be a fertiliser plant powered by solar energy sources produced on-site.30 The facility will reduce carbon emission with approximately 100,000 tons of CO2 per annum compared to a gas-based fertiliser plant. The project will also reduce the dependency of imported nitrogen fertilisers. The project will utilise approximately 70MW of renewable power. B3: Provide access to local entrepreneurs and the local labour force
A new industrial park is an opportunity to support the local economy, by creating new jobs and providing opportunities to existing businesses and SMEs. However, a proactive strategy is needed to ensure that local workers and entrepreneurs, even those that are currently marginalised, have access to these opportunities.
Improving access to work for local workers can be promoted through action B1 described above. By understanding what sort of skills businesses require in the park, training programmes can adjust and create a tailored skill base across all types of workers. Businesses can also provide internships and training on-site to facilitate this. In addition, target participation rates for PWD, youth, women and other vulnerable groups should be set.
Local businesses and entrepreneurs must be involved in the local supply chain. In the case that the industrial park attracts one or several “anchor tenants” that is, a leading business in the park, they will need various suppliers upstream and downstream such as raw materials, marketing, packaging, logistics, and deliveries, etc. It is recommended to actively promote local businesses and workers, so they have access to procurement. This could include registration lists of local businesses and networking events. A system that incentivises local procurement could be established, where companies that hire local businesses are rewarded through discounts on park services. The management of the industrial park itself will require contractual work, for instance, when it comes to general maintenance, or cleaning services. Local workers should also be favoured. There is an opportunity to hire workers from the informal sector, which could professionalise their work and generate new opportunities for income generation.
The industrial park should also provide flexible spaces for entrepreneurs and SMEs. This could take the form of a makerspace, which is a community space with shared equipment and tools for members to use as needed, on a membership or pay-as-you-go basis. The space typically includes various tools, such as a soldering iron, saws, milling machine, 3D printers, laser cutters or even sewing machines. The point is to allow entrepreneurs including jua kali workers to have access to specific tools when they need them and share best practice with others. The space could also include shared working space for entrepreneurs to work together and meet.
28. Africa’s most sustainable flower farm to transform into an sustainable industrial park with new masterplan (stateofgreen.com) 29. Oserian Two Lakes Industrial Park, Kenya — Savo Project Developers 30. Fertilizer plant to come to Oserian industrial park, Kenya (thinkgeoenergy.com)
There are several ways to ensure that the park adopts an inclusive approach in its development. Ultimately, the aim is that the park provides equal opportunities to all residents, supports local entrepreneurs and boosts education and training development. To summarise, some actions to be done include:
> Working in partnership with education providers (universities, TVTE, Wezesha) to develop inclusive programmes that are tailored to the needs of local businesses in the park (Action B1); > Provide support to local entrepreneurs, by setting procurement targets and developing shared space that they can have access to on the park (Action B3); > Engage, throughout the development of the park and after it has been developed, with local workers, local businesses,
SIGs and other users of the park, to ensure it provides a solution to local issues and to ensure all views have been transparently taken into consideration; > Ensure a good relationship with the community.
Develop programmes to improve social aspects within the local community and provide accessible communication platforms; > Develop users’ satisfaction and complaints forms as feedback mechanisms for stakeholders within the park and for the local community, e.g. Complaint boxes or hotlines; > Provide social infrastructure e.g. Accessible toilets and infrastructure, childcare services, and mothers’ rooms, and follow social performance standards in relation to social inclusion, gender equality, labour conditions, and community dialogue; > Ensure adequate working conditions in line with national and local laws and standards. Guarantee equal working opportunities for all people e.g. Respect the 5% quota for PWD inclusion. Provide accessible infrastructure and equipment; > Maintain health and safety in workspaces and implement regular training and audits; > Provide opportunities for skills development, particularly targeting SIGs and other vulnerable groups (Action B1). Case Study: A bottom-up and inclusive approach to developing an eco-industrial park: ALEAP Green Industrial Park, Telangana, India31
The Association of Lady Entrepreneurs of India (ALEAP) developed, with support from the German Development Agency (GIZ), a green industrial park of 82.55 acres of land that hosts 170 women entrepreneurs. The master planning of the park took into consideration the special needs and requirements of women entrepreneurs and employees. To identify their needs, a series of workshops, meetings and field visits were organised. A site master plan was developed and reviewed at various stage by stakeholders, especially the women entrepreneurs and ALEAP. Along with environmental considerations, workers’ specific needs and requests have been taken into account, including the development of services such as crèches, rest houses, and first aid facilities.
31. United Nations Industrial Development Organisation (UNIDO), An international framework for Eco-Industrial Parks (2021). Accessed at: An international framework for eco-industrial parks v2.0.pdf (unido.org)
B5: A promotion and marketing strategy for Sagana
KIDA has already developed some documentation about investing in KC and Sagana Industrial Park. As the industrial park further develops, it will be critical to continue to promote the park within and outside of the County, through advertising, branding, and networking. A clear promotion and marketing programme should be set out. This could include the following components:32
> Understanding of the market and identifying investors: on the supply side, work should be done to understand the comparative advantages of the park, e.g. Labour cost, location, infrastructure, market access. On the demand side, understanding what the demand for industrial parks looks like, as well as trade data and trend, will help identify which specific sectors and companies to target. Interviews and surveys with investors could also be used. > Coordination and marketing: various types of promotional support and materials can be developed, such as investment prospectuses, regular newsletters, market studies and project profiles. Coordination with other agencies is critical to ensure this support is being shared to the relevant businesses. Agencies could include national organisations (e.g. KenInvest), national government ministries, and regional Chambers of Commerce. > Targeted market and aftercare service: in addition to the points above, a proactive approach targeting specific countries, industries or companies should be put in place.
Promotional events can help identify potential investors that can then be approached more directly by mail, telephone, or direct marketing. Ideally, the park will want to find an “anchor tenant”, a leading business in the park that can attract various subcontractors; this will significantly help the park to take-off as it will have a spin-off effect on the local business ecosystem. Once investors have shown interest in the park, an “aftercare” service must be in place to assist them in the process, such as to identify joint-venture partners, and registration.
32. Atkins, Lamu Port City Agreed Investment Framework (2017)
4.1.3 Trade, Services and Eco-Tourism
The location of KKM in the geographical centre of KC, its size as one of the main urban areas in the County, and its role as the administrative capital, make it the main tertiary sector hub of the County. Trade is the main activity in the Municipality, which hosts two formal markets and a number of informal markets. Brokers from Nairobi and across central Kenya come to KKM due to its proximity and easy access from the main national trade centres, as well as its diversity of produce.
The Municipality also provides an array of services, including financial services (banks, insurance), administrative services (County headquarters), education services (university and higher education facilities) and health services (private and public hospitals). Public transport, including buses and matatus, are also key to KKM with most routes in the County starting or ending in the Municipality.
The tourism and eco-tourism sectors are currently very limited but have significant opportunities to grow.
The Municipality should further strengthen this role as a trading, services and housing hub, but this must be done in a sustainable way following the GBD approach (Chapter 3). To do so, investment must focus on improving existing infrastructure and facilities such as roads, markets, water and sewerage and preserve GBI such as rivers, parks, forests. These investments in GBI will support socio-economic benefits, such as better traffic, facilitated trade, and more housing, reduce carbon emissions and more incentives to walk and cycle, and will improve residents’ wellbeing. Steps must also be taken to support local entrepreneurs and SMEs.
From the Diagnostic Report analysis, the following key strengths, weaknesses, opportunities, and threats were established and reported in Table 4.5. These were used to determine the actions proposed in the following section.
Table 4.5 Trade, Services and Eco-Tourism: SWOT
Strengths
› Advantageous location in Central Kenya. Good accessibility by road and rail › Large markets in KKM – including wholesale and retail › A hub for County and regional transport › Two higher education institutions in KKM
Weaknesses
› Overcrowded market facilities › Transport infrastructure need improvement › Difficulty to access finance › Competition with Embu as a regional service centre
Opportunities
› Investments in agriculture, infrastructure and agri-processing will increase trade opportunities › Improvement and potential expansion of markets › Increase freight opportunities › Tourism opportunity, especially with Mt Kenya National Park
Threats
› Water and electricity threats on agriculture and agri-processing would have an impact on the sector › Neighbouring cities with larger and better positioned service industry and universities
Source: Diagnostic report ACTION PLAN
Table 4.6 lists the actions to be undertaken to develop and support trade, services, and eco-tourism, taking account of the Municipality’s strengths and weaknesses. Each action is then described under the table.
Table 4.6 Trade, Services and Eco-Tourism: Action Plan
Economic ambition Action
Better living, attractiveness, and trade in the Municipality
Encourage a balanced polycentric development of the County
Sustainable sectoral growth C1: Improve infrastructure in Kutus and Kerugoya town centres to support the Municipality
C2: Develop affordable housing to support economic development
C3: An Entrepreneurship Centre to support entrepreneurs and small businesses
C4: Improve the eco-tourism offer to align with Green Blue objectives
Source: Atkins
