Africa fertiliser financing mechanism $2M enhance for Kenya

• Africa Fertiliser Financing Mechanism will avail 8000 tons of fertiliser.
• 5.533 million Kenyan farmers are registered for the federal government’s subsidised fertiliser programme.
• African Improvement Financial institution granted Kenya $67 million in 2022-2023 by way of its African Emergency Meals Manufacturing Facility.

The Africa Fertiliser Financing Mechanism has launched a undertaking to assist ship 8,000 tons of fertilisers to 100,000 smallholder farmers in Kenya to spice up harvests and incomes.

Via its Fertiliser Financing for Sustainable Agriculture Administration Mission, the Mechanism will present a $2 million partial commerce credit score assure and a grant of $219,000 to Apollo Agriculture Restricted, a Kenyan company, to facilitate the corporate’s fertiliser gross sales.

The Norwegian Company for Improvement Cooperation, by way of a contribution of $10.15 million to the Africa Fertiliser Financing Mechanism, can be supporting the undertaking.

Representatives of the African Improvement Financial institution, which manages the Mechanism, Apollo Agriculture and the Kenyan and Norwegian governments attended the launch occasion in Nairobi.

Kenyan smallholder farmers typically lack the collateral to safe financing to purchase the required fertilisers. By sharing credit score danger with suppliers like Apollo Agriculture, the Mechanism bolsters their confidence in providing fertiliser on credit score.

Africa fertiliser financing mechanism

Marie Claire Kalihangabo, Coordinator of the Africa Fertiliser Financing Mechanism, mentioned, “The credit score danger assure additionally offers finance on to smallholder farmers on the final mile of supply. It affords fertiliser, licensed seed crop safety, and insurance coverage in opposition to crop failure.”

The 2-year-long undertaking will use Apollo’s digital platform to attach farmers in search of fertiliser and different inputs on credit score with a community of 150 retail agro-dealers and 800 village-based brokers. Kenya’s fertiliser market includes importers, blenders, and a authorities subsidy program.

“This support is in line with the Bank’s Feed Africa Strategy. It will ensure long-term private sector engagement in financing fertiliser, ultimately increasing food production and security in Kenya,” said Nnenna Nwabufo, Director General of the African Development Bank’s East Africa regional office.

Benjamin Njenga, co-founder of Apollo Agriculture, explained that Kenyan farmers can obtain high-quality farming supplies by paying a small deposit upfront, with the full loan being due when the farmer has harvested and sold the produce.

“We believe increased and proper fertiliser use can significantly impact food supply and household income,” Gunnar Holm, Norwegian Ambassador to Kenya, said at the launch.

Peter Owoko, Director of Policy at the Ministry of Agriculture and Livestock Development, announced new initiatives to strengthen Kenyan food security.

“During the 2024 cropping seasons, the government targets to avail up to 12.5 million tons of fertilisers to farmers under the subsidy program.”

He thanked the African Development Bank for granting Kenya $67 million in 2022-2023 through its African Emergency Food Production Facility.

Apollo Agriculture has already begun implementing the Fertiliser Financing for Sustainable Agriculture Administration Mission in Kenya’s Bungoma and Uasin Gishu counties, focusing on maize manufacturing. Excessive expectations are that yields will improve for the harvest season beginning in September 2024.

The undertaking aligns with Kenya’s Imaginative and prescient 2030, which identifies agriculture as a key driver of the nation’s financial development and meals safety.

The offers come at a time when a scarcity of fertiliser has hit most elements of Kenya’s North Rift area as grain farmers rush to make purchases for the upcoming planting season.

Final month, the Nationwide Cereals and Produce Board (NCPB) admitted that the demand for the enter is outstripping provide.

“We have now to this point distributed 378,000 luggage of fertiliser for the lengthy season planting train however there may be excessive demand for the farm enter, particularly within the maize rising zones of the North Rift area,” mentioned Titus Maiyo, NCPB’s company affairs supervisor.

In line with the most recent information from the Ministry of Agriculture, 5.533 million Kenyan farmers are registered for the federal government’s subsidised fertiliser programme. Some 313,959 fertiliser luggage have been redeemed for the upcoming planting season.

“Some 418,267 luggage of fertiliser valued at Sh790 million are at NCPB and Kenya Nationwide Buying and selling Company warehouses,” states the report.

The report states that About 314,000 luggage have been redeemed in 23 counties. Some 69,333 distinctive farmers have redeemed the fertiliser.

“It’s only 4,000 out of the ten,000 registered farmers within the North Rift area who’ve acquired the federal government subsidised fertiliser,” mentioned Mr Kipkorir Menjo, Kenya Farmers Affiliation director.

The fertiliser goes at Sh2,500 per bag, whereas retailers in most elements of the North Rift area are promoting planting fertiliser at greater than Sh6,200 per bag.