Among its many challenges, Kenya, East Africa’s economic powerhouse, has been dealing with daunting
debt crisis, rising unemployment and general dissatisfaction among the populace. The country’s domestic and foreign debt has ballooned to $80 billion, a staggering 70% of its gross domestic product (GDP). As debt repayments gobble up nearly half of the government’s budget, President William Ruto’s administration is racing against time to find a solution, and an Agric revolution seemed to provide the best option.
RISING DEBTS: A Ticking Time Bomb for Kenya
Kenya’s debt crisis is a classic case of borrowing gone wrong. The government’s decision to finance massive infrastructure projects, including a new standard-gauge railroad, a modern international air terminal, and major roads, has left the country with a hefty debt
bill.
The situation is further complicated by the fact that Kenya’s economy is heavily reliant on imports, particularly food and fuel. The country’s trade deficit has widened significantly in recent years, putting pressure on the local currency, while setting off chains of economic reactions that has impoverished many kenyans. But Ruto is adamant that progress is inevitable with vision and hardword, as he allayed the fears of Kenyans with calm words.
“We have not been watching helplessly and doing nothing as adversity took a toll on the economy”
“We have been working tirelessly to steer the country away from the brink of unprecedented economic collapse and onto a more promising trajectory.
Ruto’s Game Changer?
In a bold move, President William Ruto of Kenya is pushing an ambitious agricultural revolution, aimed at transforming Kenya into a food secure nation.
The initiative is designed to reduce the country’s reliance on costly food imports and boost economic growth in order to increase agricultural production and productivity, with a focus on key crops such as maize, wheat, and coffee. To this end, the government has distributed subsidized fertilizers to farmers, improved management of the sugar sector, and implemented strategic interventions in the coffee and dairy industries.
According to government data, since February 2024, Kenya government has distributed subsidized fertiliser to 6.45 million registered farmers in 45
enabling them to increase their yields.
This year, it has procured and through e-vouchers distributed 7 million bags of both planting and top dressing fertilizer to boost food production across the country.
For Ruto, this is not just about increasing agricultural production; it’s also about creating jobs and stimulating economic growth. His government is also implementing a range of initiatives aimed at supporting small holder farmers with training programs, access to credit, and markets.
During his state of the nation address In November 2024, Ruto outlined some of the inputs made in the agricultural sector, and the achievements so far.
He noted that Kenyan’s food security landscape is being reshaped, with impressive national stocks of essential crops.
The sugar sector has achieved a historic milestone, with all 17 sugar factories in Kenya now operational and producing at record levels. Domestic sugar production has surpassed national monthly consumption averages.
Meanwhile, the coffee sector is experiencing a resurgence, with exports poised to increase from 51,000 metric tonnes to 150,000 metric tonnes by 2027. Average prices at the Nairobi Coffee Exchange have risen by 25%, with farmers earning a lucrative income from exporting 48,000 metric tonnes in the last financial year.
The dairy sector is also experiencing significant growth, with milk production increasing by 14% due to government initiatives. Modernization of the New KCC, timely payments to farmers and maintenance of high milk prices have contributed to this growth. The value of exported dairy products has nearly doubled, underscoring the sector’s potential as a significant contributor to Kenya’s economic growth.
Although many Kenyans still rate the government’s efforts as inadequate, but President Ruto says the Economy is begining to
show positive outcomes towards the right direction.
“While we may not be where we would like to be, we are certainly not where we were two and a quarter years ago. At the time, the cost of living was substantially high, with prices of basic food commodities beyond the reach of many households. Today, I am proud to report that all macro-economic indicators point to a positive turnaround and an upward trajectory”, he had encouraged in a recent report.
Data from government sources indicated that the shilling has stabilised significantly,
appreciating from KSh162 to the dollar in February 2024, to KSh129 in early December, a remarkable gain of 20%.
This recovery has restored confidence in the markets and significantly reduced the cost of debt servicing, while helping to push down inflation rates.
Foreign exchange reserves also surged by $2.4 billion to hit a record $9.5 billion, highest in 10 years, while the economy is projected to enjoy 5% growth this year and 5.6% in 2025. Suffice to say Ruto is on the right track? The coming year may reveal more.
