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FILE COPY i j t Report- No.:11143 Type: (PUB) v Title: THE ECONOMIC DEVELOPMENT OF KB+ Author: WORLD BANK 'K , Ext.: 0 Room: Dept.: OLD PUBLICATION 1963 Public Disclosure Authorized liSP ,f.iIiL~ 1 1143 w. ~~~~~~~~1963 ;° evelopment of Public Disclosure Authorized 2IVIIWPWIF -- ; -'b '_s I' Public Disclosure Authorized Johns •7-INTERNATIONAL BANK Hopkins FL _.ION AND DEVELOPMENT Public Disclosure Authorized $8.50 THE ECONOMIC DEVELOPMENT OF KENYA Report of a Mission Organized by the InternationalBank for Reconstruction and Development at the request of the Governments of Kenya and the United Kingdom This report is especially timely because it is published as the last of Britain's East African territories approaches independence. It was prepared by an independent economic survey mission whose task was to assist the Government of Kenya in development planning for the crucial period ahead and in the formulation of policies which would lead to higher standards of living. In addition, the mission has included enough background information and descriptive material, including maps, to make the report meaning- ful to the general reader. While there is scope for expan- sion of industrial activities and tour- ism, Kenya's economy is essentially agricultural and the report accords the highest priority to agricultural development over the next few years. In particular, strong support is given to a continuation of the Swynnerton Plan, which since the mid-I950's has encouraged the re- organization and modernization of (continued on back flap) Property of the International Bank for Reconstruction and Devolopment THE ECONOMIC DEVELOPMENT OF Kenya Report of a Mission Organized by the InternationalBank for Reconstruction and Development at the Request of the Governments of Kenya and the United Kingdom THE ECONOMIC DEVELOPMENT OF KENYA PUBLISHED FOR The International Bank for Reconstruction and Development BY The Johns Hopkins Press, Baltimore © 1963, The Johns Hopkins Press, Baltimore 18, Md. Distributed in Great Britain by Oxford University Press, London Printed in the U. S. A. by Connecticut Printers, Inc. Library of Congress Catalog Card Number 63-15811 THE MISSION Edmond H. Leavey, Chief of Mission C. H. Thompson, Chief Economist C. Arnold Anderson, Adviser on Education Michael Jordan, Economist Marc E. A. Langevin, Adviser on Transport and Communications Paul A. Morawetz, Adviser on Industry Theodore Morgan, Adviser on Fiscal Matters E. Paul Orcutt, Adviser on Livestock Sir Herbert Stewart, Adviser on Agricultural Production Thomas H. Strong, Agricultural Economist PREFA CE This is the report of an economic survey mission to Kenya which was organized by the International Bank for Reconstruction and Develop- ment at the request of the Governments of Kenya and the United King- dom. The task of the mission, as prescribed by its terms of reference, was to undertake a general review of the economic potential of Kenya and to make recommendations designed to assist the Government in development planning for the period to 1967, and in formulating policies which would further expand and stimulate the economy and so raise the stand- ard of living of the people. The mission consisted of ten members representing four nationalities, and included in its membership two representatives of the permanent staff of the Bank. The mission assembled in Washington in September 1961, was in Kenya from mid-September to mid-December of that year, and commenced the preparation of its report at the headquarters of the Bank in Washington at the beginning of 1962. In August 1962 the Mis- sion Chief and Chief Economist returned to Kenya for further consulta- tions. During the preparation of the report, the mission was requested in- formally to submit its views on problems concerning Kenya's recurrent budget and did so in March of 1962. At the same time, a member of the mission visited London for discussion concerning the results of the Kenya Constitutional Conference held there during the early months of the year. This report, as is evident from the dates quoted, was prepared at a time of important political changes accompanying Kenya's move toward independence. These changes were still continuing as this report was be- ing written. The Constitutional Conference, held in London in Febru- ary-April 1962, produced the framework of a new constitution for Kenya but much still depended on how the framework would be filled and on the subsequent decisions reached on material points. Future relationships between the three principal East African countries, now joined in a Common Services Organization and customs un- ion arrangement, were also yet to be decided. Throughout this report we have endeavored to refrain from making any recommendations which, if adopted, would impede the governments of the East African countries vii Viii PREFACE from making such changes in their political relationships as they might consider desirable. The mission wishes to acknowledge with sincere appreciation the complete cooperation it received from the Governments of Kenya and the United Kingdom, and from the East Africa High Commission (now the East Africa Common Services Organization). A special word of appreciation is, however, due the Minister of Finance, Mr. K. W. S. Mac- Kenzie and later Mr. J. S. Gichuru, for the assistance rendered by that Ministry in coordinating the mission's activities in Kenya. Representa- tives of the various statutory Boards and Commissions, and officials of all the local governmental organizations visited by members of the mission, were likewise most helpful. The mission also acknowledges with grateful thanks the generous assistance given it by a large number of persons in Kenya engaged in all segments of private business, profes- sional occupations and civic activities. In transmitting the report to the Governments of Kenya and of the United Kingdom, the President of the Bank noted that, since the Execu- tive Directors and the management customarily do not review the recommendations of missions in detail, the report as transmitted repre- sented the views of the mission rather than positive recommendations of the Bank. The letter of transmittal added, however, that the Bank be- lieved that the findings of the report deserved the most careful consider- ation and discussion. Similarly, while other international agencies were given an opportunity to comment on the portions of the report of particular interest to them, responsibility for the recommendations of the report is to be regarded as that of the mission alone. CONTENTS The Mission ............................ v Preface ................................ vii THE REPORT 1. THE PROBLEMS OF TRANSITION ..................................... 1 2. THE COUNTRY AND ECONOMY ................................... 4 Principal Geographic Features. 4 Political History. 7 Administration .11 The Structure and Growth of the Economy .15 External Economic Relations .23 East African Relationships .29 Problems of Economic Development .33 3. PROGRAM FOR ECONOMIC DEVELOPMENT .41 Measures to Promote Economic Growth During the Next Few Years .41 Development Planning in Kenya ....... ...................... 45 Resources and Priorities .47 Suggested Development Program 1963/64-1966/67 .51 Financing the Program .55 East African Common Services Organization .59 Concluding Remarks .61 4. AGRICULTURE .63 Pattern of Agriculture .63 The Role of Agriculture in Kenya's Economy .63 Land Use .64 Land Tenure .65 Availability of Land .67 Development of Farming .69 The Nonscheduled Areas .70 Development of the High-Potential Land .72 Land Consolidation and Enclosure .73 Farm Development .73 ix X CONTENTS Development of Lands of Medium and Low Potential . .................................... 75 Land Settlement ...................... .............. 76 Irrigation ........... ......................... 77 The Tana River Catchment .................................. 78 Kenya Nile Basin . .................................... 80 The Scheduled Areas .................................... 81 Land Settlement ...................... .............. 82 African Settlement in the Scheduled Areas ....... ............. 83 Government Assistance to Farming ............................... 86 Agricultural Extension .................................... 87 Agricultural Education ...................................... 89 Crop and Livestock Improvement ................................ 92 A Policy for Mineral Fertilizer ............................... 92 Crop Research ................ .................... 95 Livestock Performance ...................................... 97 Other Animals . ...................................... 102 Production and Marketing Policies ................................ 104 East African Relations ...................................... 106 Work on Economic Matters in the Ministry ....... ............. 107 Organization .............. ...................... 108 Prospects for Individual Commodities ............. ................ 116 Coffee .................................... 116 Tea .................................... 121 Sisal .................................... 123 Pyrethrum ............ ........................ 125 Dairying .......... .......................... 126 The Meat Industry .................................... 128 The Wool Industry .................................... 129 Sugar .................................... 130 Maize .................................... 132 The Other Grains ...................................... 134 Cotton

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