The government is looking within the continent to be able to foster Agricultural Trade, Prime Cabinet Secretary in charge of Foreign and Diaspora Affairs, Musalia Mudavadi has said.
Africa, he added, has immense potential to feed itself and become a major player in global agricultural markets and therefore it is important to work together to break down trade barriers and promote regional integration to unlock this potential.
Speaking when he officially opened a two-day Financing Agriculture Sustainably (Finas) Conference at Safari Park, Mudavadi said his priority is to work with international partners to expand market access for Kenyan agricultural products and promote investment in the sector.
‘Investment support is required to facilitate agricultural production and trade. We must invest in infrastructure, such as rural access roads, storage facilities and irrigation systems, to reduce post-harvest losses and improve market access’, Mudavadi reiterated.
He noted that Digitization of agricultural value ch
ains presents a significant opportunity to improve efficiency and increase transparency adding that by leveraging technology, we enhance traceability, reduce transaction costs and improve access to finance for smallholder farmers and other value chain actors.
Mudavadi opined that the private sector has a critical role to play in financing agriculture, hence, the government is obliged to create an enabling environment for private sector investments and this includes improving the regulatory framework, reducing bureaucracy and increasing access to credit.
He observed that banks and other financial institutions can work together to provide innovative financial solutions for small-scale farmers.
‘By leveraging mobile technology and alternative data sources, we can improve access to credit and other financial services for small-holder farmers who have traditionally been underserved by the traditional formal financial sector,’ he said.
The Prime CS noted that under this tech-driven new push, we must also promot
e financial literacy and capacity building to ensure that farmers are empowered to make informed financial decisions.
Mudavadi noted that the Agriculture and Rural Financial Inclusion Project which is a government funded program aims to enhance access, efficiency and stability of agricultural and rural finance in order to transform agriculture into a modern, innovative and commercially oriented sector.
Mithika Linturi, Cabinet Secretary, Ministry of Agriculture and Livestock Development said despite being the largest sector in terms of GDP contribution, agriculture loans and investments portfolios currently are disproportionately low compared to the agriculture sector’s share of GDP.
He added that the agricultural sector has been left largely to informal sector financing mechanisms and these sources have limited capacity to provide the right finance to the sector in terms of quality and quantity.
‘According to Financial Access Household Survey 2019, formal borrowing to service agriculture is used by aroun
d 3.2 percent of Kenyans and the situation has hardly changed and this has created a gap that has resulted in the mushrooming of informal financing mechanisms that lack the capacity, quality, and quantity to respond to the needs’, Mithika said.
The CS noted that the outcomes of the conference which has brought together actors in the agricultural sector to engage in financing the sector and also on the appropriate models for funding agricultural activities, are expected to validate resources for the Government and the private sector to enable design and plan for resourcing initiatives in the agricultural sector.
‘This conference will also propose actionable areas on how to improve agricultural financing, on an improved policy environment to grow agricultural sector investment and financing and on alignment between the sector needs and public and private sector financing solutions’, Mithika said.
The two-day FINAS conference is running under the theme ‘Positioning Kenya for Resilient Agricultural Enterprises
‘.
Source: Kenya News Agency