Background: Agricultural Innovation in Kenya
The importance of improving agricultural practice
Agriculture is a major driver of African economies with 70 per cent of the continent’s population relying on the sector for their livelihoods. Africa has 65 per cent of the world’s undeveloped arable land, yet the continent spends some US$ 35 billion on food imports annually thanks to stagnant agricultural productivity. In Kenya, agriculture remains the backbone of the national economy, directly contributing 24% of Kenya’s annual GDP and another 27% indirect contribution. But in 2017, parts of Kenya were reeling from the effects of probably the worst drought in the last 20 years. These droughts typically slow down programmes for adaptation and resilience-building and force a shift towards alleviating hunger and malnutrition-related crises.
With the FAO reporting nearly 3.4 million people as food insecure in Kenya in 2017, the prognosis looks gloomy, with climate change and natural resource depletion set to pose even greater risks in the long term. Rising temperatures and unpredictable rainy seasons also threaten to destroy crop yield gains made in the recent past, and extreme weather events such as flooding, drought and pests are becoming more common. Up to three consecutive years of poor rains have also led to diminished food production and exhausted people’s coping capacities particularly in the North Eastern, Eastern and Coastal areas of Kenya. These factors all make production more difficult and spike food prices, hurting the prospects of reaching SDG 2 on ending hunger. In order to move people out of poverty, ending hunger and reducing inequality, improving agricultural practice is therefore central to achieving sustainable development outcomes.
 Source: FAO (2017) ‘Innovation for Climate-Smart Agriculture Key to Ending Hunger in Kenya’, 23 Oct 2017.
Agricultural innovation in Kenya
Since the establishment in 2007 of its Vision 2030 long-term development agenda, which places significant importance on the role of innovation in agricultural transformation, Kenya has been making solid progress towards this goal through the combined contributions of formal institutions and individual entrepreneurs inspired by the success of innovations such as M-Pesa, iCow, Hello Tractor and M-Farm. Innovative approaches to developing better seeds, better storage, more water-efficient crops and technologies that put agricultural data into the hands of farmers to help them move towards ‘climate-smart’ agriculture are now gathering pace and some of the most successful are already scaling into neighbouring countries. Although the country is just beginning its innovation journey, other emerging economies can still learn something from Kenya, including the benefits of using deliberate policy interventions; of leadership in government with an appetite for risk taking; of the construction of collaborations and partnerships with the private sector including multinational corporations; of increasing funding for research; and of the development of incubation centres across universities to foster innovation.
In many ways, the agricultural innovation ecosystem in Kenya is booming. Between 2016 and 2017, there was a 110% increase in agri-tech startups operating in the market, attracting over USD $19 million investment, while Kenya and Nigeria currently tie in first place as the top two agri-tech markets on the continent (with Ghana third). Together, these three countries account for over 60% of agri-tech startups active in Africa (Source: Disrupt Africa, ‘Agrinnovating for Africa’, May 2018).
Challenges for the innovation ecosystem
Despite this progress, the agricultural innovation ecosystem in Kenya still faces a number of challenges:
- Financing is highly concentrated – 72% of start-up investment in East Africa in 2016/17 went to just 3 companies
- The ecosystem is highly Nairobi-centric, with very little coverage in Mombasa, Kisumu, Nakuru or more rural area counties
- The pipeline of viable businesses remains disorganised, leading to over-saturation and cannibalisation of the market
- There is a small talent pool for staffing organisations and an over-importation of Western talent without local context
(Sources: Village Capital, 2017, Breaking the Pattern; Argidius (2015) The Entrepreneurship and Enterprise Growth Landscape in Kenya)
While many supportive policies now exist, they are not well coordinated and the relationships between research institutions and industry remain disjointed. There is also a need to review the education system to encourage the establishment of more business-friendly / vocational programs to build innovation-ready human capital across the pipeline from ideation through to sustainable scale (Source: Ndemo, B., 2015, ‘Effective Innovation Policies for Development: The Case of Kenya’).