Enabling Environment Bottlenecks in Kenya’s Emerging Circular and Agrifood Economies
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International Water Management Institute
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Small and medium-scale enterprises (SMEs) are vital to Kenya’s transition toward climate-smart, circular agri-food systems. However, firms in novel value chains, such as insect-based biofertilizers, urban waste composting, and indigenous plant-based milks, face enabling environments poorly aligned with their regulatory needs. This paper examines three Kenyan enterprises—EcoRich, Rebug2Debug, and OnlyPlants—to highlight how outdated frameworks and fragmented agency mandates stifle innovation. Despite aligning with national priorities for soil restoration and waste valorization, these SMEs are constrained by regulatory "grey zones," lack of product certification pathways, and exclusion from public procurement and subsidies. These barriers increase compliance costs and delay approvals, particularly for firms lacking the financial bandwidth to navigate institutional complexity. To address these hurdles, the paper identifies critical technical assistance needs. For SMEs, priorities include support for food safety classification, Access and Benefit Sharing ompliance, and quality assurance. At the system level, the paper calls for urgent reforms: developing standards for insect-based fertilizers, clarifying plant-based food oversight, and improving national-county coordination. By providing new empirical evidence on regulatory fragmentation, this study outlines actionable reforms for partners like IWMI and WFP to unlock the potential of frontier SMEs in Kenya’s circular economy.
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circular economy, agrifood systems, small and medium enterprises, biofertilizers, climate-smart agriculture