ILO Market Systems Development approach boosts sustainable livelihoods in Kenya

NAKURU (ILO News) – The International Labour Organisation (ILO) is moving beyond traditional aid in Kenya by adopting a Market Systems Development (MSD) approach that strengthens local markets rather than replacing them. The initiative, implemented through the Public-private development partnerships for inclusive decent employment and productive livelihoods project, is enabling women, youth and persons with disabilities in Nakuru, Narok and Kajiado counties to secure more resilient livelihoods in fodder production and community-based tourism.

Moving past direct interventions

Conventional development projects often provide direct support, such as distributing inputs to farmers or funding temporary infrastructure. While these measures address immediate needs, they can create dependency and collapse when external funding ends. The MSD approach tackles the underlying causes of weak markets, positioning local actors as drivers of lasting change.

Instead of supplying fodder or running farms directly, the project facilitates connections, builds capacity and encourages investment so that communities can sustain growth without external dependency.

Three pillars of sustainability

The MSD model rests on three principles:

• Co-investment: Sharing resources between development actors and local businesses reduces risks, builds ownership and demonstrates viable market solutions.
• Partnerships: Public, private and community actors collaborate to pool strengths and deliver scalable outcomes.
• Crowding-in: Once early adopters succeed, other market players replicate approaches, creating a ripple effect of systemic change.

This approach complements the PPDP model, which fosters joint ventures between the public and private sectors that improve business opportunities while advancing social outcomes.

Building a sustainable fodder market

© ILO

© ILO

A market study revealed that fodder production in the three counties is critical to rural livelihoods but constrained by limited mechanization, poor storage, low-quality standards and weak market information systems. Women and youth producers often face the greatest disadvantage, selling fodder at low prices due to lack of timely market data.

During dry seasons, unsafe fodder practices (such as adulterating hay with sawdust) caused livestock deaths and severe losses for farmers. At the same time, some large producers held unsold stocks in barns because buyers did not know they were available.

Rather than distributing hay directly, the project is facilitating systemic change. By support youth- and women-led enterprises to produce and store high-quality fodder, develop digital platforms to share real-time market information, and strengthen cooperatives to aggregate and negotiate better prices. These measures are building a transparent, fairer and more resilient fodder market that benefits both producers and buyers.

At the same time, the project is supporting cooperatives to produce silage fodder, a preserved animal feed produced by fermenting green crops like corn, sorghum, and grass under anaerobic (oxygen-free) conditions. This fermentation process maintains the fodder's nutritional value for extended periods, often up to two years, while recycling elements that might otherwise go to waste.

Unlocking the potential of community tourism

© Canva

© Canva

The project is also focusing on the tourism sector. Tourism is a major economic driver in the region, but many community-based tourism operators (CBTOs) struggle to access high-value markets. Despite offering authentic cultural and environmental experiences, they often lack visibility in mainstream booking systems and face complex regulatory barriers. As a result, middlemen frequently capture much of the revenue, leaving communities with limited benefits.

The ILO-supported project helps community-based tourism organizations expand into domestic and international markets by enhancing digital marketing skills, particularly for young people, and ensuring that services are accessible to locals rather than individuals from other urban centres.

Simplifying licensing processes and providing tailored business development support enables operators to formalise and grow their enterprises. Partnerships with banks and financial institutions are also opening new channels for investment, helping CBTOs to scale sustainably.

Inclusive and lasting impact

By addressing root causes rather than symptoms, the MSD approach will enable communities to drive their own progress. Women, youth and persons with disabilities are not only participating but taking leadership roles in cooperatives, digital enterprises and tourism initiatives.

Supporting local entrepreneurs and cooperatives ensures that change comes from within the community. This approach strengthens resilience, creates decent jobs and ensures that markets continue to deliver long after the project ends

Isaac Kiema Muema, the ILO PPDP project manager

Looking ahead

By strategically combining the PPDP model with the MSD approach, the ILO is helping to create an enabling environment for inclusive economic growth. In Nakuru, Narok and Kajiado counties, communities are building markets that are more transparent, resilient and fair, laying the foundation for lasting decent work and shared prosperity.