Kenya Finalises $10M Investment Deal to Cut Palm Oil Import Bill

Kenya is finalising discussions for a $10 million investment deal in Lamu County to establish local palm oil production facilities.

Principal Secretary (PS) for Investment Promotion Abubakar Hassan Abubakar announced the ongoing talks through an official social media statement following high-level consultative meetings with stakeholders.

The country currently spends $1 billion annually on crude palm oil imports, making the commodity Kenya’s second-largest import expenditure after petroleum oil.

Government officials are targeting Lamu County as the primary region to lead efforts aimed at reversing this heavy trade deficit through domestic farming and industrial processing initiatives.

The proposed $10 million project focuses on developing local palm oil value chains within the coastal region. Officials intend to establish agricultural frameworks and manufacturing capabilities that will reduce reliance on foreign supply chains while strengthening regional economic activities within the country.

Crude palm oil remains a critical raw material for Kenya’s domestic manufacturing sector, particularly in edible oil production, soap manufacturing, and associated consumer goods.

The high import expenditure has consistently placed pressure on national foreign exchange reserves over recent fiscal years.

Lamu County offers strategic advantages for large-scale agricultural projects due to its geographic position and transport connectivity via the Lamu Port-South Sudan-Ethiopia

Transport (LPSSET) corridor infrastructure. Localized processing facilities are expected to interface directly with existing maritime logistics networks along the Kenyan coastline.

Government representatives met with prospective investors and development partners to conclude key terms surrounding land access, infrastructure support, and operational timelines.

The Ministry of Investment, Trade and Industry (MITI) continues to coordinate with regional authorities in Lamu to ensure project requirements align with national industrialisation goals.

Kenya's broader industrial policy prioritises import substitution across critical sectors to retain capital within the domestic economy.

By developing domestic oil palm plantations and processing mills, policymakers aim to secure essential raw materials locally while creating employment opportunities across the agricultural and manufacturing supply chains.

The finalisation of the $10 million framework marks a structured shift towards regional crop diversification in coastal Kenya.

Further announcements regarding site acquisition, private sector participation, and construction schedules are expected once administrative approvals and formal agreements are fully executed by the participating entities.