Institute for Development Studies, University of Nairobi

Multi-disciplinary concern has been aroused by the increase of small-scale activities commonly labelled as the 'informal' sector among which the charcoal industry can be classified. This paper aims at establishing the main role of charcoal in the Kenyan economy with comparative analysis of alternative fuels taking price as the arbiter. Charcoal is the dominant fuel used by the low and medium income household in urban and some rural areas. Its use extends to industrial, educations, commercial and provision of services as a source of energy. Until recently, it was a foreign exchange earner but continues to provide employment opportunities both at formal and informal levels. The paper also discusses charcoal as a product of limited scarce forest and scrubland resources in Kenya to highlight possible future supply constraints of raw-materials and environmental imbalance. Finally focus is made on some factors controlling charcoal price and trade channels as basis for further research and policy recommendations.