AfDB Extends Kes. 7.3 Billion Fertilizer Subsidy to Kenya.

Kenya is set to receive Kes 7.4 billion ($63M) loan from the African Development Bank (AfDB) to support food security efforts amid the rising cost of inputs and prevailing drought.

The loan facility which was approved Thursday by the AfDB Board of Directors will see at least 650,000 cereal and oil seeds farmers across the country access subsidized fertilizer, certified seeds, and agriculture extension as the cost of inputs soar.

According to the bank, the loan will help Kenya significantly boost cereal and oil seeds production over the next two years beginning the short rains season expected between October and December and into the 2022/2023 long rains crop production season.

“We are pleased to present the Kenya African Emergency Food Production Facility. Successful implementation of the Facility will see some 650,000 farmers as 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,” said Dr. Beth Dunford, AfDB Vice President for Agriculture, Human and Social Development.

The new funding which will bolster food security and economic resilience is a shot in the arm for the government which had already released Kes 5.7 billion through the Ministry of Agriculture, Livestock, Fisheries and Cooperatives in April to subsidize fertilizer prices which have been soaring.

Cabinet Secretary Peter Munya attributed escalating prices to logistical constraints attributed to COVID-19 and some key producers restricting exports as a result of the Russia-Ukraine war.

AfDB’s $1.5 Billion African Emergency Food Production Facility

AfDB says the loan is part of its $1.5 billion African Emergency Food Production Facility, an Africa-wide initiative targeting to avert a looming food crisis exacerbated by the war in Ukraine.

The bank says an e-voucher system will be used to ensure that subsidies for inputs are “smart”.

The loan will provide trade finance guarantees and leverage the private sector to ensure sufficient volumes of fertilizer are available to farmers. In addition to boosting staple food availability, the project, which targets smallholder farmers, is expected to particularly benefit women and youth, the lender said.

“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 Munya.

As a result of the prevailing drought, rising inflation which reached 7.9pc in May-a five-year high-AfDB estimates the number of food-insecure people in the country’s pastoral and marginal areas has risen by 48% between August 2021 and February 2022.

The African Emergency Food Production Facility targets to provide agricultural seeds to 20 million African farmers thereby producing additional 38 million tonnes of food, primarily wheat, maize, rice, and soybeans that will generate $12 billion over the next two years.

Also Read: AfDB Launches Initiatives to Build Financial Acumen of African Cities.

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