The government is targeting to mobilize at lest Ksh 11 billion to lend to farmers across the country and bridge financing gaps affecting productivity in the sector.
This comes amid withdrawal of financial assistance by the United States Agency for International Development (USAID) which has seen the government increase the agriculture sector budget for the 2025/26 fiscal year by Ksh 3.8 billion.
“The impact under USAID is a very small portion which we are already addressing. When you look at the budget there is an increase from ksh 73.9 billion to Ksh 77.7 billion to address challenges the government might face in terms of that withdrawal,” said Dr Paul Ronoh, Agriculture Principal Secretary during the launch of the Financing Agri-food Systems Sustainably (FINAS) 2025 Summit.
Additionally, the National Treasury has also commenced discussions with Afreximbank for a Ksh 10 billion loan which will be channeled through the Agriculture Finance Corporation (AFC) to support lending to farmers across the country.
AFC Managing Director George Kubai said corporation’s current loan book is being financed by loan repayments by farmers as it targets recapitalization of the institution.
“We are also trying to see from a budgetary support whether we are able to get at least Ksh 1 billion that has been earmarked for AFC in the FY2025/26 that is supposed to becoming to AFC. There is a lot of government goodwill in terms of resourcing AFC so that they are able to expedite on its mandate to the farmers of Kenya.
The government is now exploring ways to address challenges that are facing agriculture in a bid to derisk the sector and encourage funding.
Increased agriculture sector financing is expected to help farmers purchase farm inputs such as seeds, fertilizers and chemicals, pay for lease of additional agricultural land, buy livestock, meet their harvesting and cover marketing costs.
“The upcoming FINAS summit provides a platform and an opportunity to explore innovative financial solutions and pathways to securing the growth and sustainability for agri-food systems on the continent. It holds the promise of shaping the future of food systems transformation across Africa,” added Dr Ronoh.
Dr Ronoh said the inaugural summit last year resulted to the development of developing a policy framework for sustainable financing and subsidy management in agriculture and the Public Finance Management (Agriculture Development Fund) framework in collaboration with Germany’s GIZ.
