The Kenya Agribusiness and Agroindustry Alliance KAAA is an agribusiness body formed in 2013 and brings together the agricultural sector stakeholders in the country. The main aim of the Alliance is to facilitate greater coordination between different value chain actors and engagement with the government. The coordination has ensured the intensification of intra-industry linkages and cooperation for effective growth of agribusiness in Kenya through policy advocacy.
Below are some of the recent events that KAAA has participated in.
- REVIEW OF THE WAREHOUSE RECEIPT SYSTEM BILL (NATIONAL ASSEMBLY BILL NO. 12 OF 2015)
The warehouse receipt bill seeks to address loss and wastage of food harvest that sells at low prices due to oversupply occasioned by lack of proper storage facilities. The bill also creates a legal framework on how farmers can access the national cereals and produce board (ncpb) & the obligations and rights of farmers. it seeks to create certified, licensed and registered warehouse keepers.
- THE SPECIAL ECONOMIC ZONES (SEZs) (September 2015)
SEZs are designated areas with special laws and can include manufacturing, trade and services, and produce for domestic or export markets which will complement the Export Processing Zones (EPZs). The pilot phase of the special economic zones (SEZs) is expected to be in force in the first quarter of 2016, after President Uhuru Kenyatta signed the law in September 2015. The government aims to set up the first three zones in Kisumu, Mombasa and Lamu.
KAAA played a key role as a non-state party that saw the parliament approve the bill to set up the SEZs after it was drafted paving way for the President to assent it.
The SEZs incentives are;
- All supplies of goods and services to companies and developers in SEZ are exempt from value-added tax (VAT).
- The corporate tax rate for enterprises, developers and operators is 10 percent for the first 10 years and 15 percent for the next 10 years, compared to 30 percent in the rest of Kenya.
- The 2015/16 Finance Act, signed in September 2015, also retains a 150 percent investment deduction allowance for investments of KSh200m ($2.2m) or more outside the cities of Nairobi, Mombasa and Kisumu.
- SEZ enterprises, developers and operators are free from taxes and duties payable under the Customs and Excise Act, the Income Tax Act, the EAC Customs Management Act, and stamp duty, advertisement and license fees levied by county governments.
- SME FORUM ON AGOA FORUM (November 7th 2015)
KAAA participated in the planning and hosting of Kenya’s micro, small and medium-sized enterprise players to build their capacity to leverage on African Growth and Opportunity Act (AGOA) renewal through exports to US markets.
The forum was meant educate micro, small and medium-sized businesses on the detailed regulations and benefits provided by the AGOA renewal Act of 2015 and how to leverage on the opportunity to build their capacity for exporting products to the USA under the AGOA framework.
The following progress was noted,
- The AGOA Extension and Enhancement act of 2015 gave Kenya the opportunity to increase its volume of trade with USA. MSME’s through this renewal act got the opportunity to capitalize on the trade in several value chains and take advantage on the opportunities that allow trade of more than 6300 products duty-free from Kenya to the USA under the act.
- The forum educated MSME’s on various sectors including construction, agro-processing exports, home décor, handloom, textiles and apparels and in particular, leather and fisheries as a few ripe sectors they could capitalize on.
- Kenya to increase the annual exports margins from about USD 500M to USD 1Billion by the time the extension is ending.
- WORLD TRADE ORGANIZATION’S 10TH MINISTERIAL CONFERENCE (15th-19th December 2015)
KAAA participated at this conference at which:
- The five-page declaration at the Nairobi meeting reaffirmed the principles and objectives set out in the Marrakesh agreement establishing the WTO.
- Developed members shall immediately eliminate their remaining scheduled export subsidy entitlements as of the date of adoption of this decision. Developing country members shall eliminate their export subsidy entitlements by the end of 2018.
- The members of the global trade body agreed on a commitment for giving the developing nations a right to take recourse to special safeguard mechanism to protect their farmers, which was a long-standing demand of India.
- Phase out export subsidies on cotton for developed nations immediately, while it has been marked for developing countries not later January 1, 2017.
- The Bali and the general council’s November 2014 decision on public stockholding which gives protection to farmers have been reaffirmed.
- PARTICIPATION AT THE PRESIDENTIAL ROUND TABLES (May 26th 2016)
KAAA participates as the private sector representative for the agribusiness and agroprocessing sectors; these forums are a platform for the private sector to directly engage with the highest levels of government and provide an effective channel for policy advocacy.
- REVIVAL OF COTTON IN KENYA (25th July 2016)
KAAA participated in identifying the major issues that contributed to the collapse of the once vibrant cotton sector and what needs to be done to revive it. KAAA is endorsed by the Ministry of Industry Trade and Cooperatives (MoITC) to lead the agro-processing component of the Kenya Industrial Transformation Program (KITP). Together other non-state partners and the government, the following was arrived at;
- The need for lint in the apparel making Export Processing Zones (EPZs) and the emerging Small and Medium Entrepreneurs (SMEs) in cottage industry
- The need for a modern ginnery
- The need to change Kenyan bale sizes to 42” by 21” with an average weight of 227kg to conform with the international standards per cubic meter
- To increase efficiency, 32,000 hectares are needed in order to achieve the minimum economies of scale necessary to support a modern ginnery and cotton industry
- The need for farmers to use hybrid cotton seed with the government will experiment with new hybrid cotton seeds that promise to cut production costs and offer investors better margins.
- Up grading of the state owned Rift Valley Textiles (RIVATEX)
- The need for the Government to scale up the pilot project to other cotton-growing areas once it becomes successful
- Undertaking the programme is under a tripartite arrangement, which will see Rivatex offer ready market to farmers.
- UNCTAD 14 (17th-22nd July 2016)
During this conference, KAAA, together with ACET, AGRA AND KENINVEST held two side meetings to explore regional opportunities and challenges for agribusinesses in eastern Africa.
These meetings brought together key players in the agribusiness sector from both public private and development sectors and resulted in an acknowledgement that for the sector to live up to its potential and spur sustainable and inclusive socio-economic growth and development across the continent, more needs to be done to support these agribusinesses through building effective partnerships.
- Pan-African Coalition for Transformation (PACT) AGRICULTURE CHAPTER (July 19th 2016)
Agriculture forms a significant portion of the economies of most African countries, employs 65 percent of the labour force and contributes 32 percent of GDP. Despite its significance, the sector faces a number of challenges. Regionally, food crops are produced on small-sized farms with limited technology, leading to poor yields.
Fragmented markets, price controls and poor infrastructure also hamper production resulting to a fall in food production, increases poverty incidences and stagnates economic growth. To reduce poverty and hunger, the agricultural sector must be reformed so as to create more jobs for the youth and contribute to overall economic growth.
PACT focuses on agricultural transformation as one of its eight thematic chapters on transformation. The eight themes are Agriculture, Financial Inclusion, Energy, Extractives, Manufacturing, Resource Mobilization, Youth and Skills, and Regional Integration and Trade Facilitation.
ACET presented the modalities for PACT’s Agricultural Chapter to 70 key stakeholders at a dinner in conjunction with the Kenya Agribusiness and Agroindustry Alliance (KAAA), the Ministry of Agriculture, Livestock and Fisheries (MoALF) and KenyaInvest in Nairobi on 19 July 2016.
The dinner was held on the sidelines of the 14th UN Conference on Trade and Development meeting (UNCTAD 14) and it;
- Provided a platform for detailed exchange about what Chapter members should do.
- The UNCTAD 14 side event also allowed members to engage with Kenya’s Ministry of Agriculture, which has been nominated for the role of Champion for the chapter.
- The PACT meeting also engaged the Kenya Agribusiness and Agroindustry Alliance (KAAA), which has been proposed to act as the country secretariat to the PACT Agriculture Chapter.
- KAAA Chief Executive Officer, Lucy Muchoki, endorsed the PACT mission
- THE SIXTH TOKYO INTERNATIONAL CONFERENCE ON AFRICAN DEVELOPMENT (TICAD VI) (26th-28th August 2016)
KAAA participated at this conference at which:
- Kenya secured a pledge of Ksh. 27.3 billion from Japan to construct an industrial park and free trade area (special economic zone) at Dongo Kundu in Mombasa. The first phase of the special economic zone is scheduled to be ready by 2019.
The agreement involves the development of infrastructure, including berth 1 at the port of Mombasa, access roads and transmission line, water supply pipeline from the mainland and sub-station drainage, power supply and a free trade zone.
- Kenya and Japan signed the agreement on promotion and protection of investment (appi) that is expected to spur Japanese investments in Kenya.
- Kenya’s private sector also took advantage of the Ticad VI conference to showcase their companies at the exhibitions, business fora and symposia as well as in many side events that were held before and during the ticad VI conference.
- THE SECOND HIGH LEVEL MEETING (HLM2) OF THE GLOBAL PARTNERSHIP FOR EFFECTIVE DEVELOPMENT COOPERATION (GPEDC) (November 28th– 1st December 2016)
KAAA attended this meeting, where participants discussed ways to promote and ensure more effective partnerships to support countries in achieving the sustainable development goals (SGDs) and the Addis Ababa action agenda (AAAA). The second high level meeting (hlm2) agreed on the Nairobi outcome document, on effective development cooperation as a means to achieve the 2030 agenda for sustainable development.
- NATIONAL AGRICULTURE IMPLEMENTATION PLAN(NAIP) (7th-9th December 2016)
Development of the ASDSP during 2010 had not adequately catered the effects and needs of a devolved agriculture sector. NAIP has been under review so as to take this into consideration and KAAA has proactively sought to ensure that it lobby’s for inclusion into the sitting committee as a representative of the private sector in the NAIP.
- INTER-GOVERNMENTAL RETREAT
KAAA through its CEO, Lucy Muchoki, has attended and participated actively in the meetings between governments (National & County) to protect the interests of private sector in agribusiness in the agenda. During these meetings, three MOU’s to set up three food parks (Fruits and vegetables in Kilifi, Cereals in Trans Nzoia and Cotton in Lamu Counties) were signed.
- THE KENYA COUNTRY CAADP FRAMEWORK
Vision 2030 seeks to give a better quality of life for Kenyans and farmers are key partners in achieving this goal. We need, as a country, to adopt the CAADP and Malabo Declaration to ensure we meet this goal.
KAAA has been participating in the development of the Kenya country CAADP framework.
The objectives of the framework are:
- Develop an in-depth understanding of the purpose, design, and status of CAADP and the Malabo Declaration;
- Create a shared understanding on the role of non-state actors in CAADP process and provide progress made so far at the regional and national level;
- Identify connections between national agriculture development plans and
- CAADP/Malabo Declaration and discuss opportunities for non-state actors engagement in the implementation of these plans;
- Review the concept of mutual accountability and the rationale, status, and next steps for strengthening Agricultural Joint Sector Reviews (JSR) in Kenya;
- Foster collaborative linkages between non-state actors groups, the CAADP country team, and county agricultural team and thereby strengthen coordination of collective efforts;
- Develop non-state actors Kenya coordination mechanism that links both national and county level of governance and CNC secretariat;
- Draft an action plan for areas in which non-state actors’ engagement in Kenya can be strengthened for the development/finalization of a national agricultural sector policy/county agricultural plans and the Malabo Declaration, including development of non-state actors commitments that align with country and county plans.
So far, KAAA together with other non-state actors have brought about following progress;
- In response to Vision 2030, the agricultural sector ministries developed the Agricultural Sector Development Strategy (ASDS) as a tool to implement CAADP. Medium Term Investment Plan (MTIP) 2010-2017 was developed to implement ASDS. Issues that the MTIP address are similar to CAADP pillars.
- Regarding the challenges that Kenya was facing in implementing the CAADP framework, the private sector got included to a greater level as a key partner.
- The devolution process brought about the need to bring on board the county governments.
- CAADP team needs to be strengthened and with many sector players being not aware of what CAADP is, sensitization was called for through communication.
- The county governments also need to be incorporated in the CAADP process and thematic working groups need to be formed since the agricultural sector is extremely large.