The African Fertilizer Financing Mechanism (MAFDE) is extending a partial commercial credit to Apollo Agriculture Limited, a Kenyan company. The collaboration’s goal is to improve access to fertilizers for small-scale farmers, ultimately enhancing Kenya’s agricultural productivity.

Kenyan soil : Between plains and mountains

Kenya’s agricultural landscape spans approximately 47 % of its total area, yet only 9.8 % is actively cultivated. With agriculture heavily reliant on rainfall, the sector remains vulnerable to climate fluctuations. Nearly 80 % of agricultural land falls within arid or semi-arid zones, leaving just 17 % with moderate agricultural viability.

Across Kenya’s diverse agro-ecological zones, unique conditions shape agricultural potential. The eastern regions, marked by desert climates, are ideal for nomadic livestock husbandry. Conversely, the elevated plateaus experience more temperate conditions, fostering diverse agricultural activities.

Kenya’s key crops

Kenya boasts a rich array of crops within its agricultural sector, with traditional practices like mixed farming and agroforestry playing pivotal roles. The nation achieves self-sufficiency in staple foods, notably maize, which covers 62 % of arable land. Additionally, industrial crops such as sugar cane, sisal, cotton, tea, and coffee contribute significantly to the economy.

In Kenya’s primary agricultural regions and highlands, crops like sorghum, potatoes, beans, peanuts, and tobacco flourish. Along the coastal plains, sugar cane, wheat, cassava, cotton, and cashew nuts dominate cultivation. Despite challenging climatic conditions in certain areas, farmers successfully cultivate fruits like pineapple.

Kenya : Leading producer of red roses

Horticulture holds notable significance in Kenya’s agricultural landscape. Floriculture, primarily focused on rose production, stands as the nation’s third-largest foreign currency earner. This sector sustains approximately 500,000 Kenyan livelihoods and injects a substantial 200 million USD annually into the national economy.

Since its inception in 1972, Kenya has swiftly risen to become the global leader in rose supply. The bulk of this output is earmarked for export, primarily to Western Europe and Russia. Nevertheless, domestic consumption is on the rise, particularly among Nairobi’s urban elite.

Contribution of agri-food to GDP

Agriculture stands as a cornerstone of Kenya’s economy, wielding significant influence. Contributing nearly 34 % to the national GDP, its impact extends further, generating an additional 27 % through interconnected industries such as manufacturing, production, services, and the agri-food sector. As the primary job creator, the agricultural sector sustains over 70 % of rural employment, accommodating the needs of the 75 % of the population residing in these areas. Simultaneously, it serves as a vital source of formal employment alongside trade and manufacturing.

Inclusive agriculture for sustainable growth

Despite its pivotal role in the national economy, agriculture grapples with pronounced investment disparities. Small-scale farmers frequently encounter hurdles in securing the necessary financing to procure high-quality inputs. In addressing this issue, the Boards of Directors of the African Development Bank (AfDB) have greenlit fertilizer financing initiatives aimed at fostering sustainable development in Kenya.

Partnership for a commercial credit guarantee

MAFDE extends a 2 million USD loan to Apollo Agriculture Limited, accompanied by a grant totaling 219,000 USD. This collaborative effort spanning two years aims to enhance the accessibility and affordability of vital agricultural inputs for smallholder farmers across Kenya. By doing so, the initiative seeks to optimize their yields, bolster commercial agriculture, and fortify food security.

Further bolstering this endeavor, the Norwegian Agency for Development Cooperation underscores the significance of judicious fertilizer use in enhancing food availability and household incomes. Leveraging Apollo’s digital platform, the project facilitates credit-based access to inputs for Kenyan farmers. This platform interfaces with a robust network comprising 150 retailers and 800 village agents.

The partnership covers four key areas :

• Supporting farmers’ access to finance through the credit guarantee facility
• Support for increasing the availability of fertilizers
• Soil health management and advice
• Data collection and analysis.

Increasing access to agricultural inputs

This financing program is geared towards amplifying harvests and incomes by supplying nearly 8,000 tonnes of fertilizer to benefit 100,000 small-scale farmers. Apollo, leveraging its extensive network of dedicated agents and resellers, shoulders the responsibility of distribution. The initiative encompasses fertilizer dissemination, crop safeguarding through certified seeds, and crop loss insurance.

Already underway in Bungoma and Uasin Gishu counties, the project initially targets maize cultivation. Benjamin Njenga, co-founder of Apollo Agriculture, underscores that farmers can access top-tier agricultural inputs with a minimal initial payment. The loan’s full repayment is contingent upon the harvest and subsequent sale of the produce.

Other agricultural policy efforts and reforms

Kenya is actively pursuing agricultural reforms as part of its Vision 2030 agenda, aimed at propelling the nation towards becoming a middle-income economy. Central to this vision is the recognition of agriculture as a pivotal driver of economic growth in Kenya and national food security. These reforms are also geared towards mitigating socio-economic disparities and alleviating poverty.

Kenya attributes a significant focus to harnessing digital agricultural technologies (Ag Tech) to address various challenges, including enhancing productivity and facilitating access to inputs and financing. Tangible steps are being taken to curb greenhouse gas emissions within the agricultural sector.

Peter Owoko, Director of Policy at the Ministry of Agriculture and Livestock Development, unveils new initiatives geared towards bolstering Kenya’s food security. For the upcoming 2024 cropping season, the government pledges to provide up to 12.5 million tonnes of fertilizer to farmers through a subsidy program.