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Lamu County is experiencing a significant economic resurgence driven by the operationalisation of Lamu Port and associated infrastructure projects, leading to growth in business, property, tourism, and agriculture.
Lamu County is undergoing a notable economic transformation, primarily propelled by the operationalisation of the Lamu Port and the broader Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor project. This development is stimulating growth across various sectors, including business, property, tourism, and agriculture, attracting investors and creating new opportunities for residents.
The LAPSSET corridor, a multi-billion dollar infrastructure initiative, aims to establish Kenya's second transport corridor, connecting Lamu to South Sudan and Ethiopia through a network of roads, railways, and pipelines. The first three berths of Lamu Port became operational in 2021, and Kenya is actively expanding the facility to enhance its role as a regional trade hub.
The operationalisation of Lamu Port has spurred significant business activity, particularly in towns like Hindi, Mokowe, Magogoni, Mpeketoni, Kibaoni, and Witu, which have evolved into key commercial hubs. Investors are increasingly venturing into real estate, hospitality, and transport sectors, capitalising on the improved infrastructure and increased clientele. The port's development is expected to stimulate local businesses, especially in construction and services, by increasing demand for goods, services, and supplies.
Furthermore, the planned Lamu Special Economic Zone (SEZ) adjacent to the port is anticipated to bolster economic development by promoting the establishment of industries, creating significant employment opportunities, and supporting value addition for export. This SEZ aims to address the high demand for steel in the region and leverage the massive, underutilised oil and gas reserves.
Lamu's property market is experiencing steady growth in 2025, driven by ongoing LAPSSET infrastructure development and increasing interest from both European and Middle Eastern buyers. The county offers diverse real estate opportunities, from traditional Swahili architecture to modern coastal living. Prices for traditional Swahili houses range from KSh 10-25 million, while modern villas in gated communities can fetch between KSh 30-70 million. Premium beachfront estates are priced upwards of KSh 80-120 million.
Shela Village and Manda Island are particularly sought-after, attracting short- and long-term renters, digital nomads, artists, and expats. The LAPSSET project is expected to further boost property values in the coming decade, positioning Lamu as an emerging northern frontier for tourism, logistics, and high-end development.
Lamu's tourism sector, a significant contributor to the local economy, is showing strong signs of recovery. Over 30% of Lamu's population depends on tourism as their main source of income. Stakeholders reported a remarkable year in 2024, with high tourist arrivals and optimism for reaching 100% performance in the high season. The Lamu Cultural Festival, a key attraction, plays a crucial role in boosting the sector and attracting both local and international visitors.
Despite a dip in international tourist numbers between April and June, the sector is confident of hitting full capacity, especially with the ongoing high season. Efforts are also underway to encourage countries with active travel advisories on Lamu to lift them, which would further boost international arrivals.
Agriculture remains a vital sector in Lamu County, contributing significantly to household incomes. The county is endowed with vast agricultural opportunities, including large tracts of arable land and potential for irrigation in areas like the Tana basins, Lake Kenyatta, and Lake Moa. The completion of LAPSSET is expected to facilitate the export of agricultural products, giving Lamu a comparative economic advantage.
Key opportunities lie in value addition for crops such as cashew nuts, coconuts, fruits, and vegetables, which remain largely untapped. There is also potential for biofuel production from sugarcane, maize, millet, sorghum, and jatropha. However, the sector faces challenges such as insufficient transport and market infrastructure, low adoption of modern technologies, and limited access to credit.
Analysts highlight the need for clarity on timelines, costs, and safeguards for ongoing development projects. The Lamu County Integrated Development Plan (CIDP) 2023-2027 serves as a strategic framework, outlining the county's vision, goals, and objectives for sustainable development across various sectors. This plan, which aligns with national development frameworks like Vision 2030, aims to attract investments, create employment, and stimulate economic growth.
The dilemma of balancing economic development with environmental protection and community sustainability is a critical challenge that policymakers in Lamu must address. The county's unique ecological and cultural significance, including its UNESCO Biosphere Reserve and World Heritage Site status, necessitates a sound policy framework and strong institutional capacity to mitigate potential disruptions to the lives and livelihoods of its residents.
