Agriculture Cabinet Secretary Mutahi Kagwe has proposed the creation of a dedicated agricultural fund to provide predictable and sustainable financing for farmers, echoing successful models such as the Constituencies Development Fund (CDF) and the Political Parties Fund.
Speaking during the official opening of the Financing Agrifood Systems Sustainability (FINAS) 2025 summit in Nairobi, Kagwe argued that a legally entrenched, exchequer-funded mechanism is long overdue for the agriculture sector.
“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.
The CS noted that the Agricultural Finance Corporation (AFC), Kenya’s leading agricultural credit institution, currently addresses only 25 per cent of the sector’s financing needs. To bridge this gap, Kagwe announced a forthcoming merger between AFC and the Commodities Fund, aimed at enhancing scale, capitalisation, and efficiency.
The proposed fund would offer long-term loans at single-digit interest rates, targeting smallholder farmers, agri-enterprises, and youth-led ventures. Kagwe emphasized the importance of moving from episodic financial interventions to a predictable, institutionalised system of support.
“This is about transforming capital access in rural Kenya,” he said, adding that the fund would complement ongoing agricultural finance reforms such as digital farmer registration, targeted input subsidies, and blended finance initiatives.
The proposal received strong support from stakeholders attending the FINAS summit, which runs from May 20–22 under the theme “Taking Ownership: Rethinking Sustainable Financing for Africa’s Food Systems.” The event gathers African and global experts to explore solutions to the continent’s agri-financing challenges.
Key discussion points at the summit include strengthening farmer cooperatives, de-risking agri-food investments, improving policy environments, and using digital technology to enhance access and impact.
Partners in the summit include GIZ, AGRA, FSD Kenya, Aceli Africa, AfDB, and several international and local organisations.
The summit aims to shift conversations into concrete actions that will close the financing gap, drive inclusive investment, and transform Africa’s food systems for long-term sustainability.
