Inclusivity will determine success of Kenya's priority value chains

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The government’s allocation of Sh386.1 billion to finance various value chains in the 2026-2027 Financial Year signals its commitment to create economic opportunities and spur jobs. The investments target priority value chains such as leather and leather products, textile and apparel, dairy, tea and coffee, rice, edible oils, blue economy, minerals, construction and building materials, apiculture, pyrethrum, beef, potatoes, maize, and poultry.

While such investments are expected to enhance productivity and competitiveness, their true success will depend on one critical factor: Inclusivity. That is, who will benefit from this transformation?

Traditionally, value chain development focuses on improving productivity and competitiveness. This is achieved by addressing bottlenecks that limit growth, including access to markets, finance, technology, skills, information and infrastructure. When these barriers are removed, businesses can become more productive, investments increase and economic opportunities expand.

However, growth alone is not enough. For value chains to become true engines of socio-economic transformation, they must also be inclusive.

This was the central message that emerged from a recent The Kenya Institute for Public Policy Research and Analysis (KIPPRA) conference where the policy recommendations emphasised that value chains ought to benefit groups historically underrepresented in economic opportunities. This includes the youth, women, persons with disabilities, and communities living in Arid and Semi-Arid Lands.

Inclusivity means ensuring that all groups access higher-value opportunities and share equitably in the benefits generated along the value chain. It also requires creating decent jobs and strengthening representation in decision-making processes.

The youth, women, persons with disabilities and the communities in arid and semi-arid lands face significant barriers in fully benefiting from the priority value chains. Limited access to finance, land, technology, markets and skills often prevents them from moving beyond low-return activities. Their voices are also underrepresented in governance structures that influence how value chains operate and distribute benefits.

For Kenya’s youth, the challenge is particularly urgent. Young people under the age of 35 constitute about three-quarters of the population, representing a potential demographic dividend in terms of current and future economically productive age groups. While 822,000 jobs were created in 2025, about 87 per cent of them were in the informal sector. The informal sector is characterised by job insecurity, poor working conditions and limited access to social protection such as health insurance and social security benefits. Creating meaningful employment opportunities for youth, therefore, remains one of Kenya’s most pressing policy priorities. As envisaged in the Medium-Term Plan IV of the Vision 2030, the government targets to create 1.3 million jobs annually, increasing the share of formal sector employment to 40 per cent by 2027, compared to the baseline of 13 per cent in 2017.

As acknowledged in the Kenya Youth Development Policy of 2019, the youth face various employment-related constraints, including academia-industry skills mismatch, low access to credit for entrepreneurial activities and business expansion, limited high-end digital skills and access to digital infrastructure, especially in rural and underserved areas, low innovation and idea incubation support, and slow expansion of economic activities to absorb more jobs relative the labour force growth.

Value chain development presents several opportunities for the youth, including through emergence of previously untapped market segments and unlocking constraints for the existing business activities. Expanding practical and industry-relevant skills, and promoting apprenticeship programmes can help align skills development with labour market needs. Stronger collaboration between research institutions, industry and young innovators can also accelerate commercialization of ideas and create new enterprises.

Strengthening digital skills and supporting access to digital infrastructure offers another pathway. Investments in digital hubs, information and communication technologies, artificial intelligence, e-commerce platforms and technology-enabled agriculture can create new employment opportunities for the youth. Policy initiatives already exist but need to be scaled up, including JiKonnect hotspots, digital hubs, Ajira digital youth empowerment, and the presidential digital talent training programme.

With regards to the women segment of the population, economic participation in value chains is often constrained by unpaid care responsibilities, financial constraints and low entrepreneurial skills. As a case in point, a recent KIPPRA research on leather value chains revealed that women owned only 26 per cent of the micro and small enterprises engaged in the manufacture of leather and leather products.

Fast-tracking implementation of the National Care Policy, 2025, could significantly reduce this burden and enable more women to participate effectively in value chains. Investments in childcare and care-support infrastructure would provide critical support while expanding access to finance, entrepreneurial development and technical skills would help women move into higher returns segments of economic activity.

The persons with disabilities face a set of challenges, including limited access to information and digital technologies, as well as worksites and workspaces that are not well suited to their special needs restrict their participation in higher-value economic activities. Investments in assistive technologies, digital inclusion and accessible workplaces will be essential in unlocking their productive potential.

As institutions such as the Micro and Small Enterprises Authority, Kenya Industrial Estates and the Kenya Industrial Research and Development Institute expand support facilities and incubation centres, accessibility to worksites and workspaces must be embedded in design and implementation.

For marginalised communities in the arid and semi-arid lands, inclusive value chain development requires context-specific solutions considering the constraints they face in terms of climate-related risks like droughts and high temperature that at times threaten livestock-dependent livelihood.

They also face infrastructure gaps like electricity, digital connectivity and access to the markets. Thus, measures to improve access to markets and bridge infrastructure gaps can help these communities participate more effectively in the value chains.

Additionally, investments in climate-resilient livelihoods are necessary to address the unique challenges posed by climate vulnerability. For instance, an inclusive leather and leather products value chain requires climate-smart practices in livestock production, such as drought tolerant animal breeds, improved pasture and water management.

There is also a need to adopt circularity of animal waste, provide support in hides and skins aggregation centres and enhance accessibility to tanneries.