Poland gives Kenya Sh10.5bn loan for farming equipment

Politics and policy

Treasury secretary Henry Rotich. PHOTO | FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• The loan will be used to obtain equipment for meat and milk processing, embryo transfer, veterinary, grain storage silos, horticulture and mobile grain dryers from Poland.
• The loan, which attracts 0.7 per cent interest, has a five-year grace period and will be paid over 25 years.

Kenya’s quest to grow its agricultural sector has received a major boost after Poland extended a Sh10.5 billion soft loan for procurement of equipment.

Treasury secretary Henry Rotich on Tuesday said the concessionary loan would be used to obtain equipment for meat and milk processing, embryo transfer, veterinary, grain storage silos, horticulture and mobile grain dryers from Poland.

The loan, which attracts 0.7 per cent interest, has a five-year grace period and will be paid over 25 years.

“Mechanisation of the sector through this project is a very important step towards increasing food production in the country,” said Mr Rotich at the signing ceremony in Nairobi, adding that the project would “cascade to counties and boost jobs creation.”

Kenya has for long relied on rain-fed agriculture to produce its food but is slowly turning to irrigation with a project in Galana-Kulalu expected to cover one million acres at the Coast.

Unreliable rain-fed agriculture has condemned the country to perennial food shortages despite having large tracts of arable land.

Agriculture, however, still accounts for slightly more than a quarter of Kenya’s gross domestic product and over half its exports, meaning the country is set to reap huge economic benefits with increased value addition.

READ: NIB plans dam to irrigate 500,000 acres at Galana

Government records show that only 16 per cent of Kenya’s agricultural exports are processed.

The Ministry of Industrialisation last week launched Kenya’s first industrialisation roadmap that seeks to make Mombasa a food processing hub to supply the export markets.

Poland ambassador to Kenya Marek Ziolkowski said the credit line would help sharpen the country’s competitive edge in agribusiness and improve its current account.

“We are happy to be Kenya’s partner in agriculture modernisation,” said Mr Ziolkowski.

Agriculture officials in attendance said the equipment would reduce post-harvest losses of farm produce blamed on poor storage and eliminate poor breeds with low yields.

Other equipment to be supplied include honey processors and liquid nitrogen plants.

Kenya has also contracted Japanese firm Toyota Tsusho Corporation to build a $1.2 billion (Sh126 billion) fertiliser plant in Uasin Gishu, opening a window for farmers to buy the critical input cheaply from the maiden factory next year