Critical industries in Kenya are concentrated in less than 10 counties, leaving the bulk of the country contributing very minimal to the economy, and their residents equally missing out on jobs.
Nine counties contributed more than average to Kenya’s manufacturing, services, construction, mining and quarrying, and electricity sectors. The remaining devolved units contribute less than average, the 2023 Gross County Product (GCP) report shows.
With more than half of the counties contributing more than average to the sector, only agriculture has a balanced spread across the country, an indication that it remains Kenya’s strongest in terms of spread and stability from shocks that could hit sectors localised in a small area.
In a scenario where all 47 counties contributed equally to the economy, each would have to contribute 2.13 percent to the gross domestic product (GDP).
Huge disparities, however, continue to be witnessed where some counties contribute disproportionately hugely to the GDP, as the bulk of counties are left to share leftovers.
In the manufacturing sector, for instance, just five counties controlled more than two-thirds of the sector between 2018 and 2022.
“Nairobi City County led in manufacturing activities, contributing an average of 36.9 percent of total manufacturing GVA (gross value added) throughout the five years.
Other counties with contributions of over five percent included Mombasa (9.6 percent), Kiambu (8.4 percent), and Machakos (7.8 percent).
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These counties help from the presence of a significant number of Export Processing Zones, which could partly explain their relatively high contribution to manufacturing GVA,” the GCP report observes.
The report, which drew data from formal and informal manufacturing activities carried out by unincorporated household enterprises, noted that other counties that contributed above average to the sector over the five years were Kilifi (4.6 percent), Nakuru (3.9 percent) and Kisumu (3.4 percent).
Forty counties contributed below the 2.1 percent average to the sector, with 30 counties contributing below one percent to manufacturing.
“The top five counties that have remarkably fuelled manufacturing activities during the period 2018 to 2022, on average, collectively accounted for more about two-thirds (67.3 percent) the share of the entire manufacturing sector, indicating their relative importance in shaping the sector’s trajectory,” the GCP report noted.
A similar trend is in the services sector, which includes all economic activities except agriculture, industry (manufacturing, mining and quarrying) and construction, electricity and water supply activities.
Nairobi contributed an average of 37.3 percent to the sector since 2018, Mombasa’s contribution was 5.6 percent, Kiambu (five percent), Nakuru (4.4 percent), Kisumu (2.7 percent), Uasin Gishu (2.6 percent), Machakos (2.6 percent) and Meru (2.1 percent).
County contributions to mining and quarrying, electricity, gas, steam, and air conditioning, water supply, sewerage, waste management and remediation, and construction also depicted a similar trend, where just nine counties had at least average contribution to the sectors’ growth.
“On average, Nairobi City County’s contribution was primarily supported by construction activities and electricity supply activities. Electricity generation activities boosted the contributions of the counties of Nakuru and Embu. Similarly, the contributions of Kwale, Migori, and Kajiado counties were augmented by mining and quarrying activities,” says the report.
Nairobi led with 32.9 percent of the value the manufacturing sector created over the five years, followed by Kiambu with a share of 10.8 percent, Nakuru (8 percent), Mombasa (7.4 percent), Machakos (4.2 percent), Embu (3.3 percent), Kisumu (2.7 percent), Marsabit (2.2 percent) and Kajiado (2.1 percent).
Only the agricultural sector contributes a fifth of Kenya’s GDP with more than half of the counties (24), contributing more than the average rate to the sector’s productivity, implying that most parts of the country are engaging in agricultural activities in an almost balanced way.
The 24 counties contributed between 2.1 percent and 7.6 percent of the sector’s productivity. It is the only sector where the leading contributor to the growth was not Nairobi, and its contribution fell below 10 percent.
“The agricultural sector contributes about 21 percent of the GDP, thereby exerting a significant influence on the overall economic performance. Counties with favourable conditions for agricultural activities recorded higher GCP compared to those that engage in other economic activities,” the report observes.
While the top five contributors to other sectors averaged two-thirds, in agriculture, the top five — Meru, Nakuru, Nyandarua, Murang’a and Kiambu — contributed 25 percent to the sector ranging between four percent (Kiambu) and 7.6 percent (Meru).
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These counties exhibited diverse agricultural outputs, including tea, coffee, maize, vegetables, potatoes, and raw milk and performed better than counties relying on a narrower range of agricultural produce.
Thirteen counties contributed below one percent to agriculture, compared to 29 counties in manufacturing, 31 counties in the other industry activities excluding manufacturing, and 21 counties in services. BY BUSINESS DAILY