Broadening the Vision in Intermediary Cities to Diversify the Economy

Broadening the Vision to Diversify the Economy December 2022 - With

Photo:

A farmer in his Mango farm.

support from the UK Government through the Sustainable Urban Economic Development Programme (SUED), Malindi Municipality is among the121 Municipalities in Kenya that now have an Urban Economic Plan (UEP). The UEP outlines within it a climate resilient economic vision for the Municipality.

The vision is two-pronged, 1a tourism action plan that is aimed at developing a series of interventions that can advance the tourism offer within Malindi and 2- a diversification plan that considers opportunities within other key sectors such as agriculture. As a way to advance the vision, SUED worked closely with the Municipality to identify a viable sector by prioritising and refining the projects identified in the UEP. One of the most promising sectors identified was the fruit processing sector in the Municipality. There was need to see how the Municipality could work with the private sector to promote value addition and support the diversification of agricultural processing through this value chain.

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Lake Region Economic Bloc- Bungoma and Kisii, North Rift Economic Bloc – Eldoret and Iten, Frontier Counties Development Council- Isiolo and Mandera, Mt. Kenya and Aberdares Region Economic Bloc- Kathwana and Kerugoya/Kutus, South Eastern Economic Bloc- Kitui and Wote, Jumuiya Ya Kaunti Za Pwani- Malindi and Lamu.

Historically, Malindi has had a large tourism sector that has driven its economic advancement. However, with COVID-19 increasing the challenges that the sector faced, there was need to diversify the local economy through agriculture to increase resilience. Fruit processing not only in Malindi but Kenya and the wider East Africa region presents an attractive opportunity due to the large local and regional demand for fruit pulp and other processing products. With a demand in Kenya and Africa for processed fruit estimated to be about 425,000 tonnes and 2.2 million tonnes respectively. Despite the significant market size, the fruit processing value chain has faced numerous challenges such as limited access to inputs and technical assistance to improve production as well as limited access to market leading to reliance on brokers. This in turn has led to processor facilities to experience underutilization due to the seasonality and perishability of fruits. To address the challenges in the sector to drive success for fruit processing, SUED identified two key challenges: a) low -production yields due to small and medium sale farmers who do not have adequate inputs to increase the crop yield and b) high-post harvest loss due to the lack of proper storing facilities.

To assist in addressing these challenges, SUED engaged a private sector player in Malindi to help them set up and operate a new climate-friendly fruit drying facility. SUED is working with the fruit processor to reach more than 4,000 small holder farmers to link them with high-value markets and improve their productivity. With the programme’s support the private sector player will develop a 1,450 square metres climate friendly fruit drying facility in Malindi to produce dried mangoes, pineapples, and coconut primarily for export to Europe and Middle East. The facility will utilise solar dryers for 30% of its production and power. Once fully operated the plant will produce 760MT per year and will source 10,000 MT of fruit from farmers within Malindi. SUED’s work in the Municipality has demonstrated that while fruit processing is attractive, local investors need support to make the opportunity viable. As a result of the detailed outreach process and engagement with various private sector players, SUED is providing a seed fund investment of close to £500,000 to help the private sector player to set up a processing plant in Malindi which will accelerate job creation and climate resilience. The private investor is set to ground break at the proposed facility site early 2023 with anticipated completion in 9-12 months.

Once the facility is completed the private investor will be able to directly impact more than 4,000 farmers and work with them to tailor-

make agro-environmental programmes on land and crop management to enable them to become more climate resilient in their farming. In addition, the various challenges across the key stages of the value chain starting at fruit production will be collaboratively addressed ensuring the optimal utilisation of the facility by farmers. With SUED support, Malindi will have strengthened its economic diversification approach and economically empower farmers.