A new policy brief from the O-Farms Project, examining Kenya’s progress towards a circular economy in agri-food systems, highlights the advances made in national policy development and the practical challenges that continue to limit the participation of small and medium enterprises (SMEs) in implementation.
The policy brief dubbed ‘Strengthening policy frameworks to empower agri-food SMEs towards a circular economy in Kenya’ is an analysis of policy enablers and inhibitors for SMEs in zero waste and circular economy products in Kenya.
The O-Farms Project is a regional initiative aimed at accelerating circular food systems in East Africa by supporting enterprises that design out food loss and waste.
Kenya continues to experience substantial food losses across its agricultural systems, linked to inefficiencies in storage, transportation, and market access rather than limitations in production.
Collectively, these losses have implications for national food security, reduce incomes for smallholder farmers, and contribute to avoidable greenhouse gas emissions.
The launch event of the policy brief on April 28, 2026 was convened under the O-Farms project, led by Bopinc and implemented in partnership with Biovision Africa Trust and Unconventional Capital and funded by the IKEA Foundation.
The event brought together representatives from agri-food and environmental organisations, development institutions, as well as policy, advocacy, and technical stakeholders working across the circular economy and agribusiness sectors.
Speaking during the launch, Bopinc Country Director Beryl Oyier, noted that Kenya has made notable progress in establishing an enabling policy environment for a circular economy.
Oyier said that legislative frameworks such as the Sustainable Waste Management Act of 2022, the Extended Producer Responsibility Regulations of 2024, and the Green Economy Strategy and Implementation Plan signal a clear commitment to advancing circularity within the agri-food system.
However, she said, for many small and medium enterprises, particularly those closely engaged in local food systems and community-based value chains, these frameworks are not yet fully accessible in practice.
“Despite this evolving policy landscape, only 18 percent of SMEs report familiarity with prevailing circular economy laws, evidencing an enormous policy-implementation gap,” she said.
The study draws on surveys of 45 Kenyan SMEs and consultations with 26 key informants. It highlights a range of interconnected operational challenges.
According to the policy brief, 93 percent report difficulties accessing stable and reliable markets. This limits their ability to plan, invest, and scale their activities. Many enterprises continue to depend on informal channels.
About 80 percent rely on word-of-mouth for customer acquisition, while 64 percent sell directly from their production sites. Certification processes present an additional barrier with a total of 78 per cent of respondents describing them as costly, complex, and largely centralized in Nairobi.
This limits participation for enterprises operating in other regions. Access to finance also remains constrained, with 60 per cent of SMEs identifying it as a key challenge.
In addition, 63 per cent of SMEs report limited access to appropriate production technologies, particularly in more remote areas.
A further 56 per cent indicate that they are not aware of existing policies and regulatory frameworks intended to support their participation in circular economy markets.
Senior Inclusive Business Advisor, Bopinc Jackson Kinyanjui noted that these challenges are further influenced by variations in regulatory frameworks across national and county levels. Enterprises operating in different counties may encounter differing requirements related to waste management and compliance.
“This increases administrative complexity and raises operational costs. It can also introduce uncertainty for businesses seeking to expand or replicate their models across locations,” said Kinyanjui, adding that this suggests that awareness and implementation support have not yet kept pace with policy development.
Ag. CEO of BvAT Frederick Ochieng noted that “When SMEs are unable to participate effectively in circular economy markets, food loss continues at scale. This contributes to greenhouse gas emissions and leads to inefficient use of water and land resources.”
He further added that it also reduces the value that could otherwise reach farmers and local communities; at the same time, employment opportunities linked to circular agri-food innovation remain underdeveloped.
“As a result, Kenya’s green growth agenda, however well- designed at the national level, loses its most powerful delivery mechanism, the entrepreneurs and small enterprises already operating at the heart of the food system,” said Ochieng.
Senior Program Manager at Bopinc and lead for Strategy 4 on advocacy under the O-farms project Ebenezer Amadi highlighted the need to close the gap between policy frameworks and day-to-day business realities.
“What we are seeing in Kenya is that SMEs are already innovating, turning waste into value and building markets, often through informal channels. The challenge is not a lack of effort but navigating systems that are complex and not always well understood,” he said
He said priority now is to make these systems more practical through clearer guidance, assisted compliance, and targeted support that helps SMEs understand and meet certification requirements.
Recommendations from the policy brief include improving access to tailored financing by engaging financial institutions on the business case for circular economy SMEs, scaling consumer and policymaker awareness through targeted campaigns, product labelling, and strategic messaging and raising SME awareness of existing policies, standards among others.
By Anita Omwenga
