Kenyan agriculture is set for a substantial boost after the European Union and the European Investment Bank – operating together as Team Europe – agreed to pump €120 million (£103 million) into the African country.
The cash, being channelled through the Equity Bank, is meant for companies worse hit by the Covid-19 pandemic.
The financial package – consisting of a €100m loan from the European Investment Bank and a €20m (£17.3 million) grant from the EU – is to be made available to small businesses – with agriculture likely to be among the main beneficiaries.
Agriculture contributes about 51 per cent to Kenya’s GDP, 60 per cent of employment and 65 per cent of the exports.
However the growth of agriculture has been constrained by limited long-term financing, delaying development and modernisation.
Europe’s International Partnerships Commissioner Jutta Urpilainen said: “The EU is working to revamp our co-operation with our African partners to tackle the common challenges that affect people’s lives, in particular the youth.
“We want to build back better together from the Covid-19 pandemic to guarantee a sustainable, green and just recovery.
“The SME sector is a lifeline for employment, including for the most vulnerable populations and in particular in critical sectors such as agriculture.
“Agreements like the one signed today to support Kenyan SMEs to mitigate the negative impact of Covid-19 will help us to achieve this.”
Thomas Ostros, vice president of the European Investment Bank, said the support being provided would help entrepreneurs, business and agricultural small holders across Kenya.
According to its national treasury, Kenya suffered its worst year in more than a decade during 2020, with its growth rate dropping from 6.1 per cent to 2.5 per cent.
Over the past 10 years the EIB has worked with 17 Kenyan banks and financial institutions to increase access to finance by entrepreneurs, small holders and business expansion through targeted credit lines and financing initiatives.
Since 1976 the European Investment Bank has provided more than €1.5 billion (£1.3 billion) of financing to support private and public investment across Kenya.
The EU and Kenya also have a long-standing partnership.
The EU’s co-operation with Kenya amounts to €435 million (£376 million) for the period 2014-2020, covering the sectors of job creation and resilience, sustainable infrastructure and governance.
The country is also supported by the EU Emergency Trust Fund for Africa, with over €58.3 million (£46.5 million) for 2015-2019.
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