NAIROBI, Kenya- Agriculture Cabinet Secretary Mutahi Kagwe has called for urgent and sustained investment in Kenya’s agricultural sector, describing it as an economic imperative and a moral responsibility.
Kagwe, who spoke at the FINAS-2025 Summit (Financing Agri-Foods System) in Nairobi, Kagwe underscored the critical role agriculture plays in ensuring food security, economic stability, and equitable development.
He urged stakeholders, including financial institutions, policymakers, and the private sector, to “move beyond dialogue to action.”
“This is a critical moment, not just for dialogue but for action,” the Agriculture Cabinet Secretary said.
“Financing food systems is not just an investment but a moral right.”
Despite agriculture contributing a significant portion to Kenya’s GDP, Kagwe lamented that the sector remains heavily underfunded.
Currently, only 3% of Kenya’s national budget is allocated to agriculture, far below the African Union’s recommended 10%.
He proposed that 80% of the agriculture budget be directed to farmers and only 20% towards administrative costs, emphasizing the need for direct impact at the grassroots.
Kagwe also spotlighted the significant financing gap that continues to plague African farmers, especially smallholders.
Despite the agriculture sector’s importance, only 3% of commercial bank loans in Kenya in 2023 were directed to agriculture out of a US$49 billion loan book.
He called on financial institutions to be more innovative and develop products that align with the realities of farming.
Likewise, Kagwe proposed reinstating a previously abandoned rule requiring financial institutions to allocate a percentage of their assets to agricultural lending.
The CS highlighted the critical role of smallholder farmers in sustaining Kenya’s food systems. He called for tailored financial products that address their specific challenges and realities, especially those in rural and underserved regions.
To address the capital deficit, Kagwe proposed establishing a government-backed agricultural fund similar to the Constituencies Development Fund (CDF) and the Political Parties Fund.
The fund would be managed through the Agricultural Finance Corporation (AFC), which he noted has a proven record but currently only services 25% of sector demand.
Kagwe concluded by calling for a supportive environment for private sector investment in agriculture, noting that sustainable food systems require a collaborative effort.
The summit brought together a diverse range of stakeholders, including government officials, development partners, financial institutions, and farmer representatives, all echoing the call for deeper investment and reform in Kenya’s agriculture sector.
