AfDB commits over US$2M to fast-track fertilizer distribution in Kenya

KENYA – The Africa Fertilizer Financing Mechanism (AFFM), a special AfDB fund has pledged Sh304.9 million (US$2M) partial trade credit guarantee and Sh33.3 million (US$219,000) grants funding to fast-track fertilizer distribution in Kenya.

The funds will be channeled through the Nairobi-based Apollo Agriculture Limited to support the distribution of over 7,000 tonnes of fertilizer targeting at least 100,000 smallholder farmers.

The three-year program begins next year with Apollo tasked to sell fertilizer throughout the country.

According to The Standard, the project will support Apollo Agriculture Limited to sell fertilizer through a part of its network, covering around 150 retail agro-dealers and 800 village-based agents using digital platforms.

It said most smallholder farmers in Kenya buy fertilizer through informal credit, microfinance institutions, and commercial banks, but access to fertilizer financing remains a challenge, as some cannot provide collateral.

“This partnership with the Africa Fertilizer Financing Mechanism comes in handy to make essential farming inputs accessible and affordable to small-scale farmers, thereby boosting farmer income and Kenya’s food security,” said Benjamin Njenga, co-founder of Apollo.

Marie Claire Kalihangabo, Africa Fertilizer Financing Mechanism coordinator said the funds would be channeled through the fertilizer financing for sustainable agriculture management project, with a main focus on women and the youth.

The fertilizer market’s leading players include importers, blenders, and the Kenyan government, which runs a fertilizer subsidy program.

The fertilizer subsidy program was initiated by the current administration with the aim of boosting food security in the nation.

Recently, President Ruto while delivering his first State of the Nation address in Parliament noted that the move to subsidize the cost of fertilizer was a masterstroke in the plan noting it has reduced from the previous KES 6, 500 (US$42.72) to now KES 2, 500 (US$16.43) per bag.

The head of state added that the move has now seen the maize production, in the country, go up by 200,000 per care this year with 18 million additional bags of maize set to be harvested.

AfDB said the move aligns with the bank’s Feed Africa Strategy because it will stimulate the private sector’s fertilizer financing in Kenya, improving food productivity and security.