Irrigation in Kenya: Economic Viability of Large-Scale Irrigation Construction

During the past decade, investments in large-scale irrigation development in sub-Saharan Africa (SSA) have re-emerged. Given past experiences, this revival is not without controversy. This chapter examines whether large-scale irrigation construction in SSA is economically viable by estimating how much it would cost if the Mwea Irrigation Scheme in Kenya, one of the best-performing irrigation schemes in SSA, were to be constructed today. The results show that constructing the Mwea Scheme today would be economically viable except in a situation where (1) the shadow price of modern rice varieties falls as low as the world price that prevailed during the late twentieth century, i.e., in 1986–2004, when large-scale irrigation projects mostly disappeared at any project cost level; or (2) the shadow price is at the medium level prevailing in 2014–2018 for a high project cost. There is undoubtedly untapped physical potential in SSA for large-scale irrigation development, but the economically viable potential remains limited. International donor agencies and national governments wanting to construct large-scale irrigation projects are recommended to assess whether their plan is likely to be economically profitable. In addition to proper operation and maintenance, Mwea’s success also points to the importance of adopting modern inputs and improved rice cultivation practices, facilitated by thorough land preparation using tractors and oxen, and improving returns from irrigation investments.