Discussion Paper No. 253 of 2021 on Constraints and Opportunities in the Cotton-Textile-Apparel Subsector in Kenya: A Value Chain Approach

Abstract

The cotton-textile-apparel value chain in Kenya is prioritized for job and wealth creation in the "Big Four" agenda given it is highly labour-intensive. The subsector has, however, performed below expectations, since it is being confronted by competitiveness challenges along the value chain. This study, therefore, explores the constraints stifling the sub-sector in a quest to harness the opportunities in the local, regional and global markets. This includes firm size and formality status of enterprises. The value chain approach is used for analysis. In addition, an in-depth review of policy framework was undertaken at both national and county levels. Further, the study explored constraints and opportunities across the value chain using rich firm-level secondary data sets, including the World Bank Enterprise Survey for Kenya 2018 and the 2016 Micro, Small and Medium Enterprises (MSMEs) Survey. Several constraints were revealed along the cotton-textile-apparel value chain. At the policy level, there are gaps in clearly articulating specific interventions along the value chain, weakening policy implementation and outcomes. At the input (farm level), constraints relate to inadequate budgetary allocation to agricultural extension services, coupled with weak farmer cooperatives, and declining returns for farmers. At the processing level, constraints relate to availability of quality cotton lint, access to relevant quality skills and high costs of production.