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Kenya: AfDB grants loan for Grain production

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AfDB has raised $540million for Agro-industrial

The African Development Bank Group’s board of directors has authorized a €63 million loan to Kenya to help it increase its production of grains and oilseeds by more than 1.5 million tonnes over the next two years. The increased output will support the country’s food security and economic resiliency. The loan is a component of the $1.5 billion African Emergency Food Production Facility, a pan-African effort to stop a coming food crisis made worse by the conflict in Ukraine.

According to data published by the UN, from 2018 to 2020, African nations imported 44% of their wheat from Russia and Ukraine. The Bank believes that wheat prices on the continent have increased by 45 percent as a result of the war cutting off supplies from the Black Sea, making wheat-based goods much more expensive.

The money from the loan will go toward assisting the nation’s Ministry of Agriculture, Livestock, Fisheries, and Cooperatives (MoALFC). It will make it possible for the government to quickly get seeds and fertilizer to farmers in time for the short rains of October to December 2022 and the long rains of 2022 to 23.

“Dr. Beth Dunford, the Vice President of the Bank for Agriculture, Human and Social Development, stated that she was thrilled to introduce the Kenya African Emergency Food Production Facility. “If the facility is successfully implemented, about 650,000 farmers will directly benefit, leading to the production of 1.5 million tonnes of grains and oilseeds. An estimated 2.8 million individuals will benefit from the facility overall.

To increase productivity, the effort involves providing 650,000 farmers with approved seeds, fertilizer, and agricultural extension. The implementation of an electronic voucher system will guarantee “smart” input subsidy programs.

To ensure that farmers have access to sufficient quantities of fertilizer, another project component will offer trade finance guarantees and leverage the private sector. The program, which targets smallholder farmers, will increase access to staple foods while also helping women and young people in particular.

According to Peter Munya, cabinet secretary for the MoALFC, “the government is looking into methods and means of addressing the cost of unga (maize flour) to bring it down so that consumers can afford it.”

Although its percentage of the GDP has recently decreased, the agriculture sector still serves as the foundation of the Kenyan economy, providing jobs for 70% of the rural population and around 65% of export revenues.

However, in addition to the inflationary consequences of the war in Ukraine, other nations in East Africa and the Horn of Africa, including Kenya, have also been severely impacted by locust swarms, climate change, and drought. According to estimations, the proportion of people living in food insecurity increased by 48% between August 2021 and February 2022 in the pastoral and peripheral regions of the nation.

Together with the COVID-19 epidemic, these converging shocks have slowed Kenya’s progress toward meeting the sustainable development goals.

The African Emergency Food Production Facility, which would offer agricultural seeds to 20 million African farmers, was approved by the Bank Group’s board of directors on May 20. The objective is to increase food production by 38 million tonnes over the next two years, principally from wheat, maize, rice, and soybeans, which will earn $12 billion.

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