Kagwe calls for increased funding to agriculture sector

Agriculture Cabinet Secretary Mutahi Kagwe has called for increased funding to the agriculture sector, saying its current allocation is disproportionate to its contribution to Kenya’s economy.

Kagwe noted that while agriculture accounts for nearly 50 percent of the country’s Gross Domestic Product (GDP), with 22.5 percent directly and an additional 25 to 30 percent through indirect linkages, the ministry receives only 3 percent of the national budget.

"Despite contributing a staggering 50 per cent to our GDP—22.5 per cent directly and an additional 25- 30 per cent through indirect linkages, agriculture currently receives only 3 per cent of the national budget.”

“This is unacceptable. I am making an undertaking to increase this allocation gradually to 10 per cent,” said the CS.

Kagwe made the remarks at the opening of the 2025 Agri-Food System Sustainability Financing Summit, a three-day event at the Kenyatta International Convention Centre (KICC).

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He pledged to work with the National Treasury, Parliament, and other policymaking bodies to raise the sector’s budget share.

He said the increased funding would help Kenya align with both the 2014 Malabo Declaration and the January 2025 Kampala Declaration, while enabling transformational outcomes, including a 45 per cent boost in agricultural productivity, elimination of post-harvest losses, and a threefold increase in intra-African trade in agricultural products by 2035.

The Agriculture CS further criticised commercial banks for offering only short-term agricultural loans at high interest rates, some as high as 30 percent.

“In Kenya, out of the total commercial banks loan-book of US$49bn in 2023, only three percent was lent to the agricultural sector. This is a sad indictment,” he said.

Kagwe attributed the shortfalls high risks, lack of collateral, poor access to financial services, and underdeveloped rural capital markets, but said it no longer needs to be the case.

He called for long-term financing options with low or single-digit interest rates to better support farmers and agribusinesses.