Devolution scorecard: The sectors driving counties

Nairobi was the biggest contributor to Kenya's economy, thanks to its diversified economy, with manufacturing among the key sectors. [Wilberforce Okwiri, Standard] Agriculture and manufacturing remain the key drivers of economies across many counties amidst the push for more diversified economies that are less reliant on one sector for growth and job creation. The counties with the highest contribution to Kenya's economy in 2023 were largely powered by agriculture and manufacturing, according to new data from the Kenya National Bureau of Statistics (KNBS). The largest contributor to Kenya's economy was Nairobi, which accounted for 27.5 per cent of Gross Value Added (GVA) - a measure of the value of economic output by counties or sectors and a pointer to how much they contributed to the economy. Nairobi, KNBS said in the latest County Gross Product (GCP) report, has a diversified economy with key sectors being manufacturing, services and secondary sector activities, which include electricity, water supply and sewerage services. GCP is a monetary measure that estimates the net market value of all final goods and services produced within a county, providing a geographic breakdown of the country's Gross Domestic Product (GDP), reflecting the economic performance and structure of Kenya's diverse counties. Other counties that were top contributors to the economy were Kiambu (5.6 per cent), Nakuru (5.2 per cent), Mombasa (4.8 per cent) and Machakos (3.4 per cent). Kiambu and Nakuru were heavy on agriculture, while Mombasa is supported by the services sector and Machakos is supported by manufacturing, with the latter having the benefit of being home to several cement factories and other manufacturing plants. The KNBS data further paints a picture of a country of contrasts where more than two-thirds of the counties (33) contributed less than two per cent to the Gross Value Added, suggesting that there are no thriving sectors to push up economic output. "There are considerable differences in the size of county economies, with Nairobi City standing out by contributing a disproportionately large share (27.5 per cent) of the national GVA. Other counties like Kiambu, Nakuru, and Mombasa also have notable contributions of 5.6 per cent, 5.2 per cent and 4.8 per cent, respectively," said KNBS in the report published recently. "However, the majority of the counties (33) contributed less than 2.0 per cent each to the national GVA." It added that while counties that are major commercial hubs such as Nairobi, Kiambu, Mombasa, Nakuru, and Machakos, have higher GCP compared to the predominantly rural counties, counties supported by agriculture such as Meru, Kakamega, and Nyeri, "also made significant contributions to the GVA." "Counties heavily dependent on agricultural production, particularly those growing tea, maize, potatoes, and vegetables, contribute more significantly to the national GVA than those focusing on less economically impactful activities," said KNBS. Over the last few years, Lamu has grown its GCP per capita, which is an indicator of the average income of county residents. The per capita GCP for Lamu has grown 44 per cent since 2020 from Sh211,577. Among the industries that have lifted Lamu include its traditional mainstays of tourism and fishing but it is also emerging as a transport and logistics hub with the operationalisation of Lamu Port. GCP per capita for Nairobi residents was the highest at Sh802,344, which was almost three times the Gross Domestic Product (GDP) per capita, which was Sh293,000 in 2023. Lamu was number 13 in terms of GCP per capita in 2022 and has in the latest report surged past counties such as Kiambu (Sh286,788) that greatly benefited from spillovers from Nairobi but is also wealthy due to booming sectors such as agriculture and real estate. Lamu is also ahead of the other two counties with cities, including Kisumu (Sh274,947) and Uasin Gishu (Eldoret City - Sh277,799). The latest Kenya Institute for Public Policy Research and Analysis (Kippra) reports show that the service sector, which includes tourism, transport and storage, is dominant in Lamu County with an average contribution to GVA of 66.13 per cent. The agriculture sector - which includes fishing - is second, contributing an average of 28.02 per cent to the GVA while the industry sector contributes about 5.90 per cent. In subsequent GCP reports, Marsabit has stood out because of its high economic growth rates. According to the latest report, the county posted a 9.3 per cent growth rate ahead of county cities like Nakuru (6.9 per cent), Nairobi (6.1 per cent) and Mombasa (4.6 per cent). According to Kippra, the service sector is dominant in Marsabit County with an average contribution to the county's GVA of 39.71 per cent. The agriculture sector is second, contributing an average of 30.77 per cent to the GVA while the industry sector contributes about 29.58 per cent. Counties like Nakuru and Embu, which are involved in electricity generation, showed higher GVA in these sectors compared to other counties. Similarly, the GVA contributions for Kwale, Migori, and Kajiado counties were enhanced by mining and quarrying activities.

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