Kenya’s Agenda in Developing the Blue Economy

Kenya’s Agenda in Developing the Blue Economy

To achieve strong and sustainable economic growth, Kenya is diversifying her sources of growth by pursuing the blue economy. The activities of the blue economy include harvesting of living resources such as sea food and marine biotechnology, extraction of non-living resources (seabed mining), and generation of new resources (energy and fresh water). Kenya has only focused on fisheries both for domestic and export markets.

Fisheries account for only about 0.5 per cent of the Gross Domestic Product (GDP) and generate employment for over two million Kenyans through fishing, boat building, equipment repair, fish processing, and other ancillary activities. Therefore, the full economic potential of marine resource has not been exploited, given that Kenya has a maritime territory of 230,000 square kilometers and a distance of 200 nautical miles offshore, which is equivalent to 31 of the 47 counties.

Globally, it is estimated that the blue economy contributes about US$ 1.5 trillion per annum (3 per cent of global GDP) and creates approximately 350 million jobs in fishing, aquaculture, coastal and marine tourism and research activities. A number of countries in the Western Indian Ocean including Mauritius, Seychelles, Madagascar and Union of Comoros have developed action plans as well as advanced policies and institutional frameworks to support in exploiting the blue economy. The estimated annual economic value of goods and services in the marine and coastal ecosystem of the Western Indian Ocean is estimated to be US$ 22 billion, and Kenya’s share is only 20 per cent, mainly from tourism, which means that a lot more is required to realize the full benefits of the blue economy.

Kenya has started prioritizing the blue economy as the seventh sector to drive the achievement of Vision 2030 development agenda. This is also in-line with African Union Agenda 2063 Aspiration 1, particularly goal 6 on blue/ocean economy for accelerated economic growth whose priority is on marine resources and energy; and ports operations and marine transport. The need to develop the blue economy is also consistent with achievement of Sustainable Development Goal (SDG) 14 to conserve and sustainably use the oceans, seas and marine resources for sustainable development, as well as  SDG 1 (end poverty in all its forms everywhere) and SDG 2 (end hunger, achieve food security and improved nutrition, and promote sustainable agriculture).

The establishment of the Department of Fisheries and Blue Economy in the Ministry of Agriculture in September 2016 marked the Kenya’s commitment to developing the blue economy. The Department is mandated to steer development and guide policy development and implementation on matters of blue economy. To facilitate development of the blue economy, the Ministry of Agriculture, Livestock and Fisheries spearheaded the development of Tuna Fisheries Development and Management Strategy 2013-2018, which was launched in November 2014. The strategy aims to transform tuna fisheries from artisanal-based fisheries to modern commercially-oriented coastal and oceanic fisheries.

In addition, in January 2017, the government established the Blue Economy Implementation Committee through Gazette Notice CXIX No. 2, 6th January 2017 to coordinate and oversee the implementation of the programme.

Further, the Fisheries Management and Development Act 2016 was enacted into law on 3rd September 2016, and this has seen the establishment of three authorities, namely Kenya Fisheries Advisory Council, Kenya Fisheries Service, and the Fish Marketing Authority, although these are yet to become operational. The Act also stipulates establishment of the Fisheries Research and Development Fund and the Fish Levy Trust Fund to support fisheries management in a sustainable manner, and implement obligations under international law concerning fisheries, which are yet to be established.

Other interventions include purchase of 55.6 meter long Deep Sea Research Vessel to enhance the capacity on marine fisheries research, and commissioning the construction of an offshore patrol boat to deter illegal fishing activities in Kenya’s Exclusive Economic Zones (EEZs). Illegal fishing is estimated to deny the country revenue estimated at Kshs 10 billion annually.

In the current financial year 2017/18, the government in partnership with World Bank targets to invest Ksh10 billion in marine fisheries through a project focusing on improving the livelihood of the people living along the coast. Moreover, the government has set aside Kshs 100 million to kick-start operationalizing a fish laboratory in Mombasa to ensure high quality fish and fish products for export market.

To spur growth of the blue economy, the government also proposes to allow a 150 per cent investment deduction allowance for capital expenditures in the sector, exempt from VAT packaging materials and other inputs intended to support primary, secondary and ancillary marine fisheries and fish processing, and reduce by 50 per cent port charges for fisheries vessels. Further, a total of Kshs 0.4 billion has been allocated for development of designated fish ports at the coast to facilitate the landing of the catch by deep sea fishing vessels, and Kshs 0.3 billion set aside for aquaculture technology.

However, there are several challenges requiring policy attention in developing the blue economy.

At global level, the challenges include, but not limited to, climate change particularly ocean acidification, sea surface temperature change, sea level rise and increased intensity of storms; inadequate human and technical capacity; and financial constraints particularly in shipping and transport that are capital-intensive. Furthermore, coastal environmental pollution from land-based and marine activities, unsustainable fishing practices, marine invasion species, habitat destruction from coastal development and extractive industries, poor governance and overfishing overseas remain key challenges facing countries exploiting potential of blue economy.

At a national level, Kenya is confronted with piracy in the Indian Ocean, illegal fishing and border disputes, specifically its dispute with Somali over maritime boundary. The dispute is on a potentially lucrative triangular stretch of 100,000 square kilometers offshore territory that is about 370 kilometers from the coastline, believed to be home to huge oil and gas deposits.

For Kenya to realize the full benefits of the blue economy, it needs to conduct thorough feasibility studies to quantify the opportunities of the blue economy and maximize returns from investments in the sector. This will help in exploring the potential for public-private partnerships in such areas as research, product development, concept development, exchange of intellectual property, and financial and human resources development. At the same time, it is important to clearly define indicators consistent with the United Nations SDGs and African Union Agenda 2063, to help in comparing growth of the blue economy with that of other countries across the region and globally.

Authors: Edith Wairimu and Dickson Khainga (Young Professionals, Productive Sector Division)

Photo: Courtesy of Kenya Maritime Authority

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