3.2. Economic sector action plans

Having identified the three key sectors for further assessment (see page 21) the Economic Development Plan has formulated the following Action Plans for each sector. These are premised on the SWOT analysis that was part of the Diagnostics Reporting stage (Appendix A). Summaries of the SWOTs are presented below for each sector (with strengths, weaknesses and challenges), whilst the Value Chain opportunities are presented in Section 3.3.

Agriculture including Apiculture Agriculture is a sector of fundamental importance to Kenya’s economy. It accounts for approximately 25% of annual GDP with a further 25% through the supply chain and related spending. Agriculture represents 65% of Kenya’s exports and accounts for 70% of informal employment in rural areas.12 As such, developing the sector has been identified as a central component of the country’s growth strategy, as clearly reflected in Vision 2030. Specific policies being targeted include improving the branding of Kenyan agricultural products to increase their value in global markets and improving the management of land registries for land use to help increase productivity. Kitui is a rural county, with a higher than average share of residents deriving their livelihood from agriculture and its semi-arid farming zones provide a strong basis for agricultural development. However only 10% of the county’s arable land is available for production.

SWOT Analysis Summary for Agriculture, including Apiculture

Strengths

Some high value crops such as mangoes (Kitui is a leading producer), cereals, sisal and cotton. Close to Nairobi for markets and processing facilities, with a strategic location in SEKEB. Other crops include green grams, pigeon peas, cowpeas, maize.

Historic apiculture activity and knowledge - small scale and traditional methods used.

There is some fishing activity with recent growth, and a conducive environment.

Some good social inclusion and county engagement, such as women’s producer groups.

Weaknesses

Many of the crops are seasonal and this limits annual output.

Less than 10% of potential irrigated land has infrastructure in place - mainly used for low-value crops. Limited access to electricity in rural areas, with high costs and a reliance on local hydroelectric power. Traditional apiculture techniques reduce quality and quantity of produce. Poor storage and processing facilities - with limited sector and industry linkages. Poor marketing and market information, with lacking supply chain infrastructure. Limited added value with a lack of modern technology knowledge, reducing quality. Low skill levels for technology use and best practice leadership. Negative attitudes towards PWDs in this sector, cultural values can constrain women’s roles.

Challenges to address

Growing population to put more pressure on ecosystem with unsustainable practices. Climate change to further impact the incidence of drought and flooding. Further land degradation from over-cropping and overgrazing, and deforestation - reducing land productivity. Continued urban migration, leaving a lower working age population and skills base. Increasing water scarcity and water contamination risks due to land degradation, lacking regulations and poor waste management. Inability to meet increasing energy demands, with an underutilisation of non-hydro renewable energy sources. Lack of private land ownership impacts land use and advanced methods practice. Risk of poor resource and new technology management. The lack of town space and effective planning constrains market development for produce.

Actions for Agricultural Development

Improve Water Management Prevent Soil Degradation Protect Forest Coverage

It is estimated that 1,850 hectares of land is currently irrigated, but the county has the potential to expand irrigation to an additional 9,245 hectares. Research also shows scope for improving water productivity through practices including water harvesting, supplemental irrigation, deficit irrigation, precision irrigation techniques, and soil-water conservation practices.

FAO. 2011.Sustainable Land Management in Practice. Rome: TerrAfrica Techniques to reduce soil erosion and degradation should be explored. Land diversification techniques, such as crop rotation (cultivating different crops throughout seasons) and intercropping (cultivating several crops simultaneously) could be explored as they tend to have positive impacts on erosion, biodiversity and water retention. Other practices, such as croplivestock integration and agroforestry can help reducing the use of pesticides and fertilisers.

The World Bank, Growing Africa: unlocking the potential of Agribusiness (Washington: the World Bank, 2013) Kitui is vulnerable to the loss of forest-covered land, which puts at risk the development of apiculture activities - identified as a key activity for agricultural growth. Developing practices such as agro-forestry can give more economic value to forest land and limit detrimental human activities over it.

Actions for Apiculture

› Continue the World Bank program to introduce modern beehives across the County, including training in how to use them › Expand the number of beekeepers and beehives across the County › Expand the number of honey extraction sites across the County › Increase understanding of hygiene and quality control issues through extension agriculture officers › Develop centralised honey processing and service centre Infrastructure

Build efficient storage facilities: this has been recognised as an important investment for farmers in Kitui county, and efforts must be pursued to provide adequate facilities. Improve road accessibility: in particular, connecting to the “extra mile” - between fields and the main town or market - can be particularly challenging and costly. In Nyeri County, the cost of transporting onions over the first two kilometres accounts for 10 to 20 per cent of the income that farmers derive from selling their onions, meaning good accessibility from the fields to main corridors is essential.

Malabo Montpellier Panel, Mechanized: transforming Africa’s Agriculture Value Chains (Dakar: Malabo Montpellier Panel, 2018) Skills & Technology Marketing

› Improve access to agriculture training: NAFIS (national farmers information service) is a government service that provides ad-hoc support to farmers. › Introduce more mechanisation practices, particularly in agroprocessing: it enables time and physical efficiencies, can help grow the quantity and quality of products, while reducing losses.

Mechanisation can happen at the production stage (tractors, irrigation technologies) and at processing stage (grinders, juicers, dryers to product byproducts, for instance mango juices). › Partner with key organisation for best practices and access to technology: The Centre for

Agriculture and Bioscience

International (CABI) in

Kenya has successfully developed methods of protecting crops from pests and diseases, effective biological controls and see quality improvement. Kenya

Agriculture and Livestock

Research Organisation (KALRO) has opened an

Apiculture Research Institute to support the sector across the country. › Consolidate the value chain by encouraging packaging and labelling practices: post-production practices are less developed in Kitui, but they could help generate more value from products.

Local honey is currently sold in plastic containers and often lacks labelling, but a better packaging and presentation will be required for exports to larger national markets. (Refer to Value chain projects and Development

Framework further below) › Promote non-financial support for small businesses: With regards to non-financial support, such as business and marketing training, organisations such as the Kenya Association of

Manufacturers (KAM) provide training and courses to help small businesses develop their business strategy. › Support product certification: Obtaining product certifications can help differentiate crops in the market-place, and justify selling them at a premium. Finance

› Promote financial support for small businesses: Access to finance is particularly difficult for farmers wishing to expand to more mechanised activities. The high seasonality of the industry, risks related to weather conditions and the lack of secured property rights makes production highly reliant on external factors and therefore risky to finance. The World

Bank is working through its AgriFin programme to provide technical assistance to the financial sector in

Africa, helping to develop products that are specific to the agribusiness and are better at assessing risks and opportunities. Specific financial products are also made available for vulnerable groups, such as governmentbacked Uweto Fund for women, youth and people with disabilities.

The World Bank, Growing Africa: unlocking the potential of Agribusiness (Washington: the World Bank, 2013) › Develop and strengthen local informal markets: it is crucial to develop platforms for farmers to sell their products locally.

Industry, including Construction Materials

Manufacturing has been identified as a key driver of economic growth in the Kenyan government’s development strategy. The sector contributes to around 10% of GDP and the government aspires to increase that share to 15% of GDP by 2022. Food production is the largest contributor to manufacturing-led economic output. The industrial sector is limited in Kitui with manufacturing accounting for less than 1% of the county’s GCP. There are two main subsectors considered within the UEP:

› Agro-processing › Construction materials and block making The recent acquisition of a stone crusher provides a good opportunity for Kitui to develop interlocking blocks, to support high demand for affordable housing and construction in general.

SWOT Analysis Summary for Industry, including Construction Materials

Strengths

Availability of materials: stone and quarry dust, clay, limestone, iron ore, coal. Skills in stone cutting and block making.

High demand for construction sector both within the county and also nationally. There is interest from youth groups in terms of employment. Presence of a clothing factory with a developing workforce.

Challenges to address

Further pollution of soils and water resources from poor management of wastes.

Insufficient regulation resulting in environmental degradation of river catchments, and water use. Climate change to exacerbate water supply issues. The exclusion of certain social groups would limit the sector’s inclusive economic growth.

Weaknesses

Unsustainable methods e.g. clay blasting, with large volumes of waste and poor waste management.

Limited access to affordable energy. Little understanding of electricity generation and biofuel and renewable sources. Poor marketing and supply chain infrastructure, limited engagement and training in construction activity. Unreliable water supply for the industry and larger scale production. Poor roads conditions and only one connection to national trunk road (A9). Lack of railway line and good airport/port access.

Lack of spare capacity at substations constrains rapid industrialisation. Limited access to and management of better machinery. Lack of skills and local training in new methods. Growing congestion on local road network from B7 development. Lack of parking capacity.

Actions for the Development of the Industry Sector

Plan for Industrial Activity (Refer to Specific Section in Development Framework)

› As the industrial sector is currently very limited, there is an opportunity to develop new industrial projects in the same geographical location. Manufacturing and processing industries often have the same type of spatial requirement - large floorspace, good accessibility for deliveries, strategic location near road networks, relative distance to residential areas - making it cost-efficient in a public investment point of view to create an industrial cluster.

Infrastructure provision (water, energy) can be more efficient. Geographical proximity can also be beneficial for environmental purposes - waste and pollution are concentrated in one location and can be more easily managed and treated. › Provide vocational training to new manufacturing workers: When in comes to training for factory workers, the best type of skills development policy for the is through onsite training, instead of traditional, institution-based learning.

Onsite training allows to deliver more relevant and targeted training, and is also more convenient for workers as it happens where they work and during working hours. Institutions such as the Kenya Association of Manufacturers (KAM) propose training for factory workers and middle management alike. › Encourage long-term education in technology: the county is looking at upgrading Mulango

Polytechnic to middle level tertiary education. › Support small companies’ access to finance and business support: While a range of financial products are available for small and medium size companies through traditional banks,

Kenya Industrial Estates

Ltd is dedicated to finance micro, small and medium industrial companies and support rural industrialisation.

It provides funding as well as incubation services to support entrepreneurs.

Skills Finance

Actions for Building Materials

› Include training in use of new materials such as interlocking blocks at vocational training colleges › Prioritise use of the blocks and other new low-cost materials in Town and County developments of schools, clinics, houses, etc › Ensure the County mortgage program supports the use of these new materials

Trade and Commerce

Kitui town is the only significant agglomeration within a large, highly populated (1.1 million inhabitants), and mostly rural county. This makes it a key regional market place whose role is likely to grow over the next decades. It is important that steps must be taken to manage this projected growth and ensure the town continues playing its role as a place of trade and commerce efficiently. Several issues have been highlighted including poor traffic circulation, a lack of parking spaces, lack of pedestrian facilities, and a need to increase the number of recreational zones and ornamental space. Some of those elements can be critical to trade activities - in particular those that relate to human mobility and transport. While Kitui town already has several locations for trade, including three markets, more are needed given the growing local importance of the town. The county identifies that 22 new informal markets will be needed as the town centre is increasingly becoming heavily congested and served by an undersized bus park.

SWOT Analysis Summary for Trade and Commerce

Strengths

Kitui town is main administrative centre for the county, with 3 local markets for trade.

Vibrant urban core with a mix of commercial and residential uses, which can be enhanced.

Different groups are involved in local crafts production, Kitui Taka Youth Group and Kyanika Women's group.

Challenges to address

Rapid population growth, with unplanned expansion of the town to impact its appeal (e.g. waste, congestion). Redevelopment of the B7 road could bring congestion through the town.

Further encroachment and pollution impacting the rivers and riparian corridors.

Weaknesses

Little cultural or tourism offer, with no classified tourist hotels in the town. Limited locally made products that can promote further trade activity with other counties and nationally. Large parts of the road network are in poor condition, lack non-motorised provision. Poor waste management of households and businesses - impacts the appeal of the town. Limited access to affordable energy, with high cost electricity, and power interruptions. Lack of security and safety due to limited lighting around the town and market areas. Limited skills to expand the sector’s value and take up service jobs.

Climate change to exacerbate water supply issues. Lack of local affordability of products will undermine sector contribution to sustainable economic development.

Actions for the Development of Trade and Commerce Sector

Land Use & Infrastructure (Refer to Specific Section in Development Framework)

› Improve placemaking in Kitui town centre: placemaking includes all policies that aim to “understand, design and program public spaces by putting people and communities ahead of efficiency and aesthetics”. This aims to make urban areas more accessible and empower citizens. Providing spaces for trading and social gathering – for instance a pedestrian square - would help support trade in a town that lacks pedestrian areas like Kitui.

Providing recreational zones like parks and playgrounds, while not directly supporting trade, could still make the town more liveable and attractive to consumers.

Living Cities, 14 smart ways to create public space: real examples from sub-Saharan Africa (Stockholm: Living Cities, 2018) › Provide space for logistics: logistic space, including parking space for lorries, has been identified as missing in the town. If trade is to become a growing sector in the town, logistics infrastructure will have to be further developed - taking into consideration the location of main markets, industrial clusters and residential areas. › Strengthen public transport infrastructure and operations: increasing the capacity of the bus park - or opening a new bus park - will reduce city centre congestions and make accessibility to the town centre easier and more reliable, with spinoff effects on trade and access to public services. Marketing

› Develop business support training and enable access to finance including targeted training for vulnerable groups: a number of financial and non-financial services are available. › Improve business registry: the national government is in charge of maintaining track of businesses, and has facilitated business registration through an online process. › Engage with local stakeholders: planning processes require full involvement from local business community