Agriculture Cabinet Secretary Mutahi Kagwe has proposed the creation of a dedicated agricultural fund modelled on successful government-backed financing programs like the Constituencies Development Fund (CDF) and the Political Parties Fund.
Kagwe argued that a permanent, exchequer-funded mechanism is necessary to recapitalise the Agricultural Finance Corporation (AFC) and unlock greater access to affordable credit for farmers.
“If we have funds enshrined in law for political parties and constituencies, why not for agriculture? This is the sector that feeds us, employs millions, and powers half of our economy,” he said.
Speaking when he officially opened the Financing Agrifood Systems Sustainability (FINAS) 2025 summit in Nairobi, the CS noted that AFC currently serves only 25 per cent of the sector’s credit needs despite having a proven business model.
Kagwe also announced a planned merger between AFC and the Commodities Fund to achieve economies of scale and operational efficiency.
“We are building a stronger institution, better capitalised, more agile, and more capable of serving the evolving needs of our farmers,” he explained.
The proposed fund would provide long-term, single-digit interest loans to farmers and agri-enterprises, especially smallholders and youth-led agribusinesses.
He said the fund would complement Kenya’s broader agricultural finance reforms, including digital farmer registration, targeted subsidies, and blended finance models.
“This is about transforming capital access in rural Kenya. We need to shift from episodic interventions to predictable, sustained financing,” he emphasised.
Stakeholders welcomed the proposal as timely, especially in light of persistent credit access challenges in the agricultural value chain.
FINAS, is a high-level meeting scheduled to take place from May 20-22.
The landmark summit brings together a diverse mix of African and international stakeholders to explore sustainable pathways for financing the continent’s food systems.
Under the theme “Taking Ownership: Rethinking Sustainable Financing for Africa’s Food Systems,” the summit builds on momentum from the FINAS 2024 dialogue and months of focused pre-summit engagement.
Over three days, the summit will spotlight the urgent need to close the agricultural financing gap while fostering innovative, inclusive, and resilient investment solutions.
Discussions will centre on practical ways to strengthen farmer cooperatives, promote inclusive finance, de-risk agri-food investments, improve policy and regulatory environments, and leverage digital technologies to scale access and impact.
The ultimate goal is to drive transformative change across Africa’s food systems by turning dialogue into action.
The summit has attracted participation from across the board, including farmers, entrepreneurs, digital innovators, the private sector, and government representation from national and regional bodies.
Among the major partners in the African dialogue are Kenya’s cutting ministries, GIZ, AGRA, FSD Kenya, Aceli Africa, Finance in Motion and the Africa Development Bank.
Others are Netherlands Food Partnership, Transformational Investing in Food Systems (TIFS), Heifer International, Digifarm, and several financial lending institutions.
It is expected that the three-day conference will delve into crucial aspects of transforming Africa’s agri-food systems, addressing the significant financing gap and fostering innovative solutions for resilient and inclusive agricultural growth on the African continent.
Prime Cabinet Secretary Musalia Mudavadi is expected to attend the conference.
It will officially be closed by the Cooperatives and MSMEs Development Cabinet Secretary, Wycliffe Oparanya.
