Cabinet Secretary for Agriculture Mutahi Kagwe has called for the establishment of a dedicated agricultural fund, adapted after successful state-backed initiatives like the National Government-Constituencies Development Fund (NG-CDF).

The proposed fund, according to Kagwe, would be stipulated in law and financed by the exchequer, with the goal of recapitalizing the Agricultural Finance Corporation (AFC) and expanding affordable credit access for farmers.

“If we have guaranteed funds for political parties and constituencies, why not for agriculture, the sector that feeds us, employs millions, and drives half of our economy?” Kagwe posed.

Speaking during the official opening of the Financing Agrifood Systems Sustainabilityity (FINAS) 2025 summit in Nairobi, the CS said that AFC currently meets just 25 per cent of the sector’s financing needs, despite having a solid operational model.

The FINAS 2025 summit, held from Tuesday, May 20, to Friday, May 23, 2025, in Nairobi, brings together African and international stakeholders under the theme “Taking Ownership: Rethinking Sustainable Financing for Africa’s Food Systems.” The event builds on momentum from previous dialogues and months of targeted consultations.

Over three days, participants—including farmers, innovators, private sector players, and government representatives—are set to discuss practical ways to close Africa’s agricultural financing gap. Key topics include strengthening cooperatives, de-risking investments, improving policies, and leveraging digital tools to enhance access and impact.

Boosting farmers’ funding

To boost agricultural financing, he said there is a planned merger between AFC and the Commodities Fund to enhance operational efficiency and scale.

“We are building a stronger, more agile institution capable of meeting the evolving needs of our farmers,” he said.

Kagwe noted that the suggested agricultural fund would offer long-term loans at single-digit interest rates, targeting smallholder farmers and youth-led agribusinesses. It is designed to complement wider reforms such as digital farmer registration, targeted subsidies, and blended finance approaches.

“This is about creating sustained and predictable access to capital, especially in rural Kenya,” Kagwe added.

Stakeholders at the summit welcomed the proposal, noting its timeliness amid ongoing challenges in accessing credit within the agricultural value chain.

Major partners include Kenya’s key ministries, GIZ, AGRA, FSD Kenya, Aceli Africa, Finance in Motion, the African Development Bank, Heifer International, Digifarm, and others.