Critical industries are centred in less than 10 counties while the bulk of the devolved units make minimal contribution to the economy, the 2023 Gross County Product (GCP) report shows.
Leading Counties
The leading counties have had an average to above-average contribution to Kenya’s manufacturing, services, construction, mining and quarrying, and electricity sectors.
The remaining counties bring a less-than-average contribution to the table, and in turn, residents from these areas reap fewer benefits.
According to the report, only agriculture has a balanced spread across the country — an indication that it remains Kenya’s strongest sector in terms of stability from shocks that could hit sectors localised in a small areas.
In an ideal situation, all the 47 counties should have contributed equally to the economy — with each giving 2.13 percent to the Gross Domestic Product (GDP) — but this is an unlikely scenario.
However, huge disparities continue to be witnessed where some counties contribute disproportionately to the GDP as the bulk are left to share leftovers.
In the manufacturing field, for instance, just five counties controlled more than two-thirds of the sector between 2018 and 2022, leaving the rest to be shared amongst more than 40 counties.
Nairobi leads the pack in manufacturing
“Nairobi City County led in manufacturing activities, contributing an average of 36.9 percent of total manufacturing Gross Value Added (GVA) throughout the five-year period. Other counties with contributions of over five percent included Mombasa (9.6 percent), Kiambu (8.4 percent), and Machakos (7.8 percent).
“These counties benefit 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’ contribution to manufacturing falling below one percent.
“The top five counties that have remarkably fueled 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 report noted.
There was a similar trend in the services sector, which includes all economic activities except agriculture, industry (manufacturing, mining and quarrying), construction, electricity and water supply activities.
Nairobi has contributed an average of 37.3 percent to the sector since 2018, Mombasa gave 5.6 percent, Kiambu (5 percent), Nakuru 4.4 percent), Kisumu (2.7 percent), Uasin Gishu (2.6 percent), Machakos (2.6 percent) and Meru (2.1 percent).
Counties’ contribution to mining and quarrying, electricity, gas, steam, air conditioning supply, water supply, sewerage, waste management, and the construction sector also depicted a similar trend. Only nine counties had at least an average contribution to the sector’s growth.
“On average, Nairobi City County’s contribution was primarily supported by construction and electricity supply activities. Electricity generation boosted the contribution of Nakuru and Embu counties. Similarly, the contributions of Kwale, Migori, and Kajiado counties were augmented by mining and quarrying activities,” the report states.
Nairobi led in the contribution to the sectors’ productivity with a contribution of 32.9 percent of the value they 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 agriculture — a sector that contributes a fifth of Kenya’s GDP and spread across the country — had more than half of the counties (24) giving more than the average rate to the sector’s productivity.
This implies 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 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 gross county product (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 just 25 percent to the sector. This ranged between four percent (Kiambu) and 7.6 percent (Meru).
“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,” the report said.
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.
