Kenya to raise US$250m to set up value-addition hubs under industrialisation initiative

KENYA – The government of Kenya is seeking to raise US$250 million (Shs25 billion) through partnership with development partners to facilitate establishment of value-addition hubs for agriculture produce.

Mwangi Kiunjuri, the Agriculture Cabinet Secretary, said that the value-addition centers will initially target dairy, avocado and the livestock sectors, to be implemented under the industrialisation pillar of the Big Four agenda.

He said focus was on creating small cottage industries run by organised producer groups under strong cooperatives, reports Business Daily.

“We are reaching out to private sector and other partners to help us raise the cash and roll out first end-products of the drive by 2022.

“We want to see many milk producing counties packaging their milk and its by-products for the market to maximise on returns,” he said.

Food security is part of President’s Kenyatta’s big four agenda which aims at a 48% increase in agriculture sector’s contribution to GDP as well as create 1,000 agro-processing small and medium enterprises and 600,000 new jobs.

The initiative recently received a US$66.2 million (Kshs6.62 billion) boost from the European Union which entered into a partnership with Equity Bank through the European Investment bank to tackle specific investment gaps in the agriculture sector.

Dubbed as Kenya Agriculture Value Chain Facility, the aim is to help agriculture companies to modernise and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders.

Agriculture export market

As one of the leading avocado producers in Africa, Kenya has also secured an export market to China which the country counts as an additional benefit the agriculture sector.

However, China has set stringent conditions for the export of the produce to the Asian country

The Ministry of Agriculture launched an initiative that seeks to expand the country’s market, which Mr Kiunjuri said that the State would help farmers to meet the export conditions.

Among the conditions given by China is that exports should be of ripe avocados, which have been frozen at minus -30 degrees centigrade after peeling and transported to China when frozen at -18 degrees centigrade or below.

The agreement also requires that the peeling, packing and freezing should be done at pack houses that have been approved by Kenya Plant Health Inspectorate Service (Kephis).

“We cannot beg to be given lenient terms of compliance because business is a competitive field where if we fail to meet the conditions, another country will. We are duty bound to help our farmers meet the conditions,” he said.

According to statistics from the Economic Survey 2019, the value of horticultural exports increased by 9.6 percent to US$1.243 billion (Sh124.3 billion) and accounted for 22.9 percent of total domestic exports in 2018.

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