Economywide and Distributional Impacts of Water Resources Development in The Coast Region of Kenya: Implications for Water Policy and Operations

The prominence of the agriculture sector in the Kenyan economy makes economic growth particularly vulnerable to erratic climatic patterns and limited water resources availability. Agriculture contributes about 24 percent of the gross domestic product (GDP), 75 percent of industrial raw materials, 65 percent of export earnings, and 60 percent of total employment. Thus, water resource investments are necessary to shield the economy against drought and flood risks. However, no major dams have been constructed since mid1990s. Consequently, Kenya’s current storage capacity is about 103 cubic meters per capita, of which 100 cubic meters are predominantly for hydropower production. Moreover, the Kenyan development profile reveals strong regional disparities. Differences in the share of income and social services are observed across regions. Five of the six counties in the Coast region are among the 14 counties regarded as the poorest and least developed nationwide in terms of access to key infrastructure and services. The Coast region has the secondhighest rural poverty levels in Kenya (after the northeastern region), while even urban poverty levels in Mombasa are somewhat higher than in other major cities in Kenya. Whereas poverty and access to services remain high across many regions in Kenya, the available statistics paint a clear picture of socioeconomic inequality and high levels of poverty in many rural and urban communities in the Coast region, especially with regard to access to key services such as water supply, sanitation, food security, health, and education. The dire poverty and inequality situation coupled with frequent droughts and the complex sociopolitical factors in Somalia that affect northeastern Kenya and other adjoining regions, has the potential to fuel conflict and reduce security, which can affect peace and sustainable development across the whole region. Realizing the seriousness of the prevailing poverty levels and the limited water infrastructure, which heighten the vulnerability of livelihoods in the region to frequent droughts and climatic shocks as well as the high economic potential of the region-the Government of Kenya (GoK) initiated water-centered infrastructure investments in the Coast region. The major premise for this initiative is that multipurpose water investment is the key to unlocking the potential of the Coast region and enhancing the ability to adapt to climate change.