Kenya secures 7.5 billion shillings AfDB loan for fertilizers and seeds

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Economy

Kenya secures 7.5 billion shillings AfDB loan for fertilizers and seeds


Headquarters of the African Development Bank. PICTURES | COURTESY

Kenya has received a 7.48 billion shillings loan from the African Development Bank (AfDB) to support the acquisition of fertilizers and seeds for 650,000 local farmers to boost food production and control inflation consumer prices.

The loan is part of the AfDB’s $1.5 billion (177 billion shillings) African Emergency Food Production Facility, an Africa-wide initiative aimed at averting a looming food crisis exacerbated by the war in Ukraine.

“The loan ($63 million) will support the country’s Ministry of Agriculture, Livestock, Fisheries and Cooperatives,” the AfDB said in a statement.

“This will enable the government to rapidly provide affordable fertilizer and seeds to farmers ahead of the short rains of October-December 2022 and into the long rains 2022/23 agricultural production season.”

The AfDB loan includes the delivery of certified seeds, fertilizers and agricultural extension to 650,000 farmers to boost productivity, he said. An e-voucher system will be used to ensure that input subsidies are “smart”.

“Successful implementation of the facility will see some 650,000 farmers direct beneficiaries, resulting in the production of 1.5 million tonnes of grains and oilseeds. In total, the facility will positively impact some 2.8 million people,” said Dr. Beth Dunford, AfDB Vice President for Agriculture, Human and Social Development.

Another component of the project will provide trade finance guarantees and mobilize the private sector to ensure that sufficient volumes of fertilizers are available to farmers.

“The government is looking at ways and means to reduce the cost of unga (maize meal) to bring it down so consumers can afford it,” Cabinet Secretary for Agriculture Peter Munya said in a statement. a statement.

Kenya is among the African countries that have been hit hard not only by the inflationary effects of the war in Ukraine, but also by the swarms of locusts and the impacts related to climate and drought.

“These overlapping shocks – together with the Covid-19 pandemic – have set back Kenya’s progress towards achieving the Sustainable Development Goals,” the AfDB said.

The spike in global fertilizer prices began in early 2021 due to the impact of the Covid-19 pandemic. The ongoing war between Russia and Ukraine has aggravated the situation.

Currently, fertilizer prices in Kenya stand at 6,000 shillings per 50-kilogram bag, an increase of 71% from the previous year.

The price hike is also due to producing countries such as China, Russia and Turkey restricting exports to protect their farmers, compounded by strong consumer demand from India, Brazil and the United States. who buy large quantities, reducing the available global supply.

Inflation in Kenya hit a 58-month high in June due to soaring food prices, exceeding the government’s upper limit target for the first time since August 2017.

Inflation – a measure of annual changes in the cost of living – hit 7.9% in June from 7.1% in May, Kenya’s National Bureau of Statistics reported.

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