The Kenyan government is ramping up efforts to bolster the agriculture sector, seeking an additional Ksh 11 billion to finance farming activities across the country. This move follows the withdrawal of financial assistance from the United States Agency for International Development (USAID), which had been supporting key agricultural initiatives.
To mitigate the impact of this funding gap, the government has increased the agriculture sector budget for the 2025/26 fiscal year by Ksh 3.8 billion, raising it from Ksh 73.9 billion to Ksh 77.7 billion. Agriculture Principal Secretary Dr. Paul Ronoh assured stakeholders that the government is proactively addressing the shortfall.
“The impact under USAID is a very small portion which we are already addressing. When you look at the budget, there is an increase to address challenges the government might face in terms of that withdrawal,” Dr. Ronoh stated during the launch of the Financing Agri-food Systems Sustainably (FINAS) 2025 Summit.
Beyond budgetary increases, the National Treasury has initiated discussions with the African Export-Import Bank (Afreximbank) for a Ksh 10 billion loan. These funds will be channeled through the Agriculture Finance Corporation (AFC) to enhance lending to farmers nationwide. AFC Managing Director George Kubai emphasized that the corporation’s loan book is currently sustained by repayments from farmers, and additional funding is needed to strengthen its lending capacity.
“We are also trying to secure at least Ksh 1 billion earmarked for AFC in the FY2025/26 budget. There is strong government goodwill in resourcing AFC to expedite its mandate to farmers,” Kubai noted.
Increased financing for the agriculture sector is expected to help farmers purchase essential inputs such as seeds, fertilizers, and pesticides, lease additional land, acquire livestock, and cover harvesting and marketing expenses. The government is also focusing on de-risking the sector to attract more investments and financial support.
The FINAS 2025 Summit provides a platform to explore innovative financial solutions for sustainable agricultural growth. Dr. Ronoh highlighted that the previous summit led to the development of a policy framework for sustainable financing and subsidy management, in collaboration with Germany’s GIZ. The government remains committed to transforming Kenya’s food systems to ensure sustainability and growth in the agricultural sector.
