Kenya: African Development Bank Approves a €63 Million Loan to Increase Cereals and Oil Seed Production – African Business

The Board of Directors of African Development Bank Group (www.AfDB.org)  has approved a €63 million loan to Kenya to significantly boost cereals and oil seeds production by over 1.5 million metric tonnes over the next two years. This will boost national food security as well as economic resilience.

The loan is part of the African Development Bank’s $1.5 billion African Emergency Food Production Facility, an Africa-wide initiative to avert a looming food crisis exacerbated by the war in Ukraine.

The loan will support the country’s Ministry of Agriculture, Livestock, Fisheries and Cooperatives (MoALFC). It will allow the government to quickly provide affordable fertilizer to farmers before the October-December 2022 short rainfalls and into the 2022/2023 crop production season. 

“We are pleased to present the Kenya African Emergency Food Production Facility,” said Dr. Beth Dunford, the Bank’s Vice President for Agriculture, Human and Social Development. “Successful implementation of the Facility will see some 650,000 farmer direct beneficiaries, resulting in the production of 1.5 million tonnes of cereals and oil seeds. In all, the Facility will positively impact some 2.8 million people,” she added.

To increase productivity, the project will see 650,000 farmers receive certified seeds, fertilizers, and agricultural extension. An e-voucher system will be used to ensure that subsidies for inputs are “smart”.

Another component of this project will provide trade financing guarantees and leverage the private industry to ensure adequate fertilizer availability to farmers.  The project, which targets smallholder farmers and is expected to increase staple food availability, will also benefit youth and women. 

“The government is looking into ways and means of addressing the cost of ‘unga’ (maize flour) to bring it down so that consumers can afford it,” said Peter Munya, Cabinet Secretary for the MoALFC.

Despite its decline in recent years, the agriculture sector is still the backbone of Kenya’s economy. It employs 70% of the rural population, and accounts for approximately 65% of export earnings.

Still, Kenya—and other countries in East Africa and the Horn of Africa — have been hit hard by not only the inflationary effects of the war in Ukraine, but also locust swarms and climate- and drought-related impacts. The number of food-insecure people in the country’s pastoral and marginal areas rose by 48% between August 2021 and February 2022, according to estimates.

These overlapping shocks—together with the Covid-19 pandemic–have set back Kenya’s progress towards achieving the sustainable development goals.

On May 20, the Bank Group’s Board of Directors approved the African Emergency Food Production Facility, which will provide agricultural seeds to 20 million African farmers. The goal is to produce an additional 38,000,000 tonnes of food, primarily wheat and maize, which will generate $12 billion over two years.

Distributed by APO Group for African Development Bank Group (AfDB).

Contact:  
Olufemi Terry
Communication and External Relations Department
African Development Bank
email: [email protected]

About the African Development Bank Group
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It is composed of three distinct entities, the African Development Bank(AfDB), African Development Fund(ADF)and the Nigeria Trust Fund. The AfDB has an office in Japan and is present in 44 African countries. This office contributes to economic development as well as the social progress of 54 of its member states. For more information, please visit: www.AfDB.org