Agriculture Cabinet Secretary Sen. Mutahi Kagwe delivered a landmark address today at the Financing Agri-Food Systems Sustainably (FINAS) 2025 conference, pledging a transformative shift in Kenya’s agricultural financing and budgetary priorities.
In a bold commitment to elevate the status of agriculture in Kenya’s economic planning, Kagwe announced plans to work in concert with the National Treasury, Parliament, and other policy-making bodies to significantly raise the sector’s share of the national budget.
“Despite contributing a staggering 50% to our GDP—22.5% directly and an additional 25-30% through indirect linkages—agriculture currently receives only 3% of the national budget,” Kagwe stated. “This is unacceptable. I am making an undertaking to increase this allocation gradually to 10%.”
Kagwe noted that this increase would align Kenya with the Malabo Declaration of 2014 and the Kampala Declaration of January 2025, while enabling transformational outcomes including a 45% boost in agricultural productivity, elimination of post-harvest losses, and a threefold increase in intra-African trade in agricultural products by 2035.
Turning to the issue of agricultural credit, Kagwe decried the negligible support from commercial banks, revealing that only 3% of the US$49 billion in loans issued by banks in 2023 went to the agriculture sector.
“This is a sad indictment,” he said. “We know the reasons—high perceived risk, lack of collateral, and underdeveloped rural capital markets—but it no longer needs to be this way.”
In response, Kagwe called on financial institutions to rethink their approach and innovate around the real needs of farmers. He urged banks to move away from short-term, high-interest credit models and embrace long-term, low-interest financing solutions tailored to the unique cycles of agricultural production.
He proposed a return to policies requiring financial institutions to allocate a fixed percentage of their assets to agriculture. “This rule was once in place, and I am today calling for its reinstatement,” Kagwe declared. “This aggregated pool of funds could provide the affordable, accessible capital the sector desperately needs.”
Kagwe also backed the creation of a dedicated exchequer-funded agriculture finance facility, modeled after existing structures like the Constituency Development Fund (CDF). He revealed plans to recapitalize the Agricultural Finance Corporation (AFC) and merge it with the Commodities Fund, aiming to scale up the institution’s ability to meet capital demands in the sector.
The CS emphasized that sustainable agricultural transformation would require collaboration across government, financial institutions, and the private sector, supported by a robust digital and data-driven ecosystem. He highlighted innovations such as the Kenya Integrated Agriculture Management Information System (KIAMIS), which has already digitally profiled over 6.4 million farmers.
Concluding his remarks, Kagwe issued a rallying call to stakeholders: “Let us be bold. Let us build a more inclusive, innovative, and sustainable financing ecosystem. Let us leave no farmer behind.”
His speech set a decisive tone for FINAS 2025, signaling a renewed focus on strategic investment and systemic reform in Kenya’s agricultural sector.
