Kisumu inks Sh30bn agriculture investment deal with UK firm

The Kisumu government in partnership with a UK-based company has signed a Sh30 billion agriculture investment programme.

The partnership is between UK investment group United Green and Kisumu County 42 Lake Ventures Company.

Governor Anyang Nyong’o said the Sh30 billion agriculture and food security investment programme will revolutionise food production and agriculture in the entire Lake region.

He spoke during the signing of the partnership on Tuesday.

The shareholders' agreement was signed by Kisumu County 42 Lake Ventures Company chairman and county secretary Godfrey Kigochi and United Green chief investment officer Albrecht Frischenschlager.

Nyong'o said the partnership will deliver agri-fintech services for rural communities, high productivity climate-smart farming and state-of-the-art agro-industrial facilities.

It will also create new markets for farmers in the Lake Victoria basin region over the next five years. 

The programme will adopt a rigorous development approach not yet seen before in the agriculture sector, which seeks to contribute materially to food security for Kenya and the region. 

The governor said Kenya needs a champion organisation to provide leadership and prudent investment.

"Also, to develop inclusive, scalable, market-based, environmentally sustainable and high productivity agri-food systems," he said.

Nyong’o said the programme has an incredible alignment to the county's strategy and with the national government's Agricultural Sector Transformation and Growth Strategy 2019-2029.

"We will significantly contribute to all nine ASTGS flagships,” he said.

The governor further said the programme resonates with his manifesto for the revitalisation of agriculture in the next five years.

"In my manifesto, I am committed to putting more land under production in Nyando, Kisumu East, Muhoroni, Nyakach, Kisumu West and Seme subcounties," he said.

Nyong'o also committed to revamp rice production and invest in horticulture and floriculture in Nyamthoe, Mboha valley and Kano plains.

He said the project will also help accelerate growth in other agricultural subsectors, including revival of the cotton industry, dairy and fish production.

Frischenschlager said they are proud to have found such committed partners and look forward to building the sector together.

He said this investment would not have been possible without the market orientation, business process guidance and support from the UK government.

Frischenschlager cited the invaluable support from the British High Commission, Agricultural Transformation Office and Ministry of Agriculture, Livestock, Fisheries and Cooperatives, Kenya.

The country director at the UK Department for International Trade Alexander Milne said the UK government lauds the strong commitment and close collaboration between the British company United Green and Kisumu county.

He said it is truly a transformative investment in Kenya’s agriculture sector.

Milne said they are proud to support and are confident of the expected positive outcomes, that could be extended to other regions in Kenya.

This include in job creation, improved crop production for the outgrower community and enhanced livelihoods.

"The investment will support the Kenyan governments’ strong commitment to agricultural transformation, increased productivity and output and inclusive growth of local agriculture and associated industries,” he said.

Milne said the collaborative development approach over five years will deliver the largest and most modern integrated crop and agro-industrial processing system in Kenya, as well as strengthen Kenya’s food security in the face of global threats. 

The venture is expected to reduce Kenya’s dependence on importing food commodities by approximately US$200 million (Sh24 billion) annually, thus reducing Kenya’s trade deficit. 

An array of high value crops will generate foreign exchange with a focus on servicing local consumer and industry demand with consumer value addition done within Kenya.

This will include at least 100,000 tonnes (16 per cent of local demand) of locally produced rice products and at least 100,000 bales (160 per cent of current local production) equivalent of cotton products to support the Kenyan textile industry and edible oil such as sunflower and soybean.

Others include cotton seed, soybean and maize by-products to support the livestock sector.

The project will be implemented in two phases and upon completion the venture will be the largest and most modern integrated agri-food and services programme in Kenya.

The project will be the leading strategic player in the development of Kenya’s high potential agricultural sector.

The venture’s primary farms integrate with 100,000 hectares (247,105.38 acres) of surrounding farming communities via a unique smallholder farmer scheme, with the aim of increasing their productivity and providing them with support on sustainable farming methods.

The venture will subsequently commit to off-take agreements with the farmers to ensure financial security for these farmers.

Some 20,000 rural households are targeted to be incorporated in the new agri-food operating system and more than 5,000 indirect jobs will be created when the integrated enterprise is at full capacity.

It is approximated that more than 2,000 people will be directly employed when the enterprise is fully operational.

The investment will support Kenyan governments’ strong commitment to increasing productivity, youth participation and employment within the development of local agriculture and associated industries.

Further, the strong demand for high quality, safe food products and the collaborative development approach over five years will deliver the largest and most modern integrated crop and agro-industrial processing system in Kenya.

(Edited by Bilha Makokha)