President William Ruto's administration, on Wednesday, May 3, got a shot in the arm after signing a Ksh9.5 billion (Euro 63 million) loan agreement from African Development Bank.
The loan agreement was signed for the Kenya Emergency Food Production Facility (AEFPF-K) to increase agricultural productivity and improve food security in Kenya.
Treasury Cabinet Secretary Njuguna Ndung'u and Nnenna Nwabufo, Director General for Regional Development and Business Delivery of East Africa at the African Development Bank, signed the agreement.
According to the regional bank, the loan facility was expected to support President Ruto's administration in increasing agricultural production.
The facility from the development partner was also secured to help the Kenya Kwanza regime fast-track the adoption of the e-voucher system to distribute seeds.
"We plan to increase production by 1.5 million metric tonnes of cereals and oilseeds between 2023-2025, distribute 65,000 MT of fertilizers and 17,000 MT of seeds, and institutionalize the e-voucher system," Nnenna stated.
"Our goal is to mitigate the impacts of drought and the Russia-Ukraine war and support farmers and the government with the necessary resources. Let's work together to achieve a more resilient and food-secure future for Kenya," she added.
The National Treasury, on the other hand, insisted that the financing was critical in bolstering agriculture which is one of President Ruto's development agendas.
Treasury added that the loan programme was critical in supporting the government to fulfil the fertiliser subsidy scheme.
"The loan agreement will support fertiliser imports by local firms to bolster the agricultural sector for increased food production," the Treasury insisted.
Beneficiaries of the credit facility would include small-scale farmers who will receive certified seeds and fertilisers at affordable rates along with extension services.
Other secondary beneficiaries would include various stakeholders along the production value chain for the selected crops, wheat, maize, rice, and soybean.
Aggregators, fertiliser and seed companies, financial institutions, agro-processors, and producer associations would also benefit from the credit facility secured by Ruto.
Headwinds and Debt Situation
The loan acquisition came after MPs rejected a proposal by Treasury CS Njuguna Ndung'u to alter the debt ceiling and replace the numerical valuation with the Gross Domestic Product.
During a committee hearing, CS Njuguna was quizzed over the current debt, with MPs arguing that the Kenya Kwanza administration was struggling to pay salaries on time.
"We cannot allow you to continue to pile more debt in a situation where you can not pay salaries in time. You are being unfair," Samuel Atandi (Alego Usonga) stated.
However, CS Njuguna vowed to find a better explanation to convince the lawmakers to adopt the new strategy on addressing the country's debt situation.
