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NEWS & CURRENT AFFAIRS

The Nairobian

Blend tradition and tech to up livestock trading

Opinion

By The Standard Business | Sep 22, 2024

**Traders at the Isiolo Livestock Market.** [File, Standard]

Kenya’s rich livestock trade has been the foundation of the country’s cultural and economic wealth for decades.

The diverse range of livestock, including cattle, goats, sheep, and camels, has played a vital role in sustaining livelihoods of many communities, particularly the pastoralists. This dynamic livestock sector not only provides livelihoods for millions but also significantly contributes to the country’s GDP.

More than 9 million people are actively involved in pastoralism, with the pastoral community controlling livestock valued at over US$1 billion. Successive governments right from the colonial era introduced more organised livestock markets mainly to support meat production for local consumption and export markets.

Established in 1950, the Kenya Meat Commission formalised the livestock trade to some extent, providing a more structured market that played a crucial role in processing and exporting meat. However, the commission often faced inefficiencies and mismanagement.

Despite efforts to improve the sector, most livestock trade remained informal, with animals being sold in open-air markets, often at prices far below their potential market value. While livestock is a big business venture, the industry has relied on informal trading methods thereby providing little income for pastoralists.

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Recently, there has been a push toward modernising the livestock sector. However, the market is still fragmented, with limited access to transparent pricing and secure trading mechanisms.

Transforming livestock trade into a structured platform similar to that of the Nairobi Securities Exchange (NSE) would be ideal given the country’s large livestock sector and the need for an efficient, reliable, and adaptable trading system, creating a formal, digital marketplace where livestock can be traded with the same level of transparency, regulation and efficiency.

A modern livestock trading platform that combines digital technology will revolutionise the sector, improve market efficiency and provide new opportunities.

Kenya’s strategic location offers an opportunity to export high-quality livestock products and live animals to the Gulf countries. It also serves as an attractive stimulus for investors from the Middle East and other parts of the world.

As the world population is expected to rise, demand for livestock products is expected to increase across various sectors such as meat, dairy, and leather. This idea is a huge opportunity for the livestock sector in Kenya to capitalise on the expanding market. Consequently, this growth could potentially lead to poverty reduction by fostering sustainable income generation for pastoralist communities, traders, and the government, which would positively impact the overall economy and the social well-being of the country.

This approach also provides farmers and traders with increased access to market opportunities and financial inclusion. Further, it has potential to attract domestic and foreign investments hence stimulating job creation, and contribute to economic growth.

For instance, the Australia Livestock Exchange (ALE) enables digital trading of cattle, sheep, and goats. This platform functions like a stock exchange market, using an auction model for price discovery and secure transactions. Buyers and sellers benefit from improved market access and transparency.

Such modernisation can be piloted in Garissa, Narok, Kajiado, and Isiolo counties before being rolled out across the country. The selection presents diverse ecological zones and livestock farming practices, providing a comprehensive testing ground for the platform.

This will address challenges faced by farmers, investors, and the broader economy, thereby opening up new avenues for growth and development, ultimately transforming the livelihood of over 9 million Kenyans relying on pastoralism.

-The writer is an internal auditor.

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