The Context

Around seven in ten Kenyans live in rural areas, half of whom live in poverty. Kenya became a low-middle-income country in 2014. However, poverty and income inequality remain persistent challenges. Approximately 3.5 million Kenyans need food assistance. 

Kenya’s population has more than tripled over the past 30 years, resulting in dependence on rapidly depleting natural resources. This impacts women in particular, as they shoulder a greater responsibility for providing food, water and fuelwood.

Agriculture is the backbone of Kenya’s economy, making up a third of annual GDP and employing 70 per cent of rural people. Kenya has one of the largest dairy sectors in sub-Saharan Africa, accounting for 4 per cent of GDP.

Climate change threatens the agriculture sector, with its economic costs estimated at 2.6 per cent of GDP per year by 2030. With crop production relying on rainfall and almost half of animal production occurring in arid and semi-arid lands, drought and unreliable rainfall are significantly impacting agriculture.

The Strategy

IFAD supports Kenya’s Agriculture Sector Transformation and Growth Strategy (2019-2029) by providing loans to smallholders and actors along the dairy and cereal value chains, including small traders and food processors. IFAD also improves access to rural financial services.

The country strategic opportunities programme for 2020-2025 aims to improve:

• Climate-resilient and community-based natural resource management;
• Access to productivity-enhancing assets, technologies, finance and services;
• Access to post-production technologies and markets.

IFAD is extending its support beyond productive rural areas to the country's arid and semi-arid lands. This shift supports the government's commitment to improve small-scale irrigation, extension services, marketing and access to financial services in areas with high poverty rates. The emphasis is on a market-oriented approach in the horticulture, dairy, cereal and rural finance sectors.