Kenya has launched an ambitious KSh1.08 trillion five-year investment strategy aimed at transforming the country’s agricultural sector, with private sector participation expected to finance nearly half of the program’s total cost as the government pushes to modernize food production systems and boost sector productivity.
Under the newly introduced “National Agri-Food Systems Investment Plan”, “Kenya 2026-2030”, the government has outlined a financing structure where national and county governments will contribute 35.0% equivalent to Kshs 378.4 bn, private investors will provide 45.0% or Kshs 486.5 bn, while development finance institutions and bilateral partners are expected to fund the remaining 20.0%, totaling Kshs 216.2 bn. The funds will be deployed progressively over five years, with the highest allocations scheduled for the second and third years of implementation.
The strategy, unveiled during the “Financing Agri-Food Systems Sustainably Summit”,“FINAS Summit Nairobi 2026” will serve as the government’s primary investment framework for the second phase of the Agricultural Sector Transformation and Growth Strategy through 2030. The initiative comes as agriculture, which contributes approximately 22.0% of Kenya’s GDP and supports nearly 60.0% of rural employment, continues to underperform, recording average growth of just 2.7% between 2019 and 2024 against the government’s target of 6.0%.
The largest funding allocation of Kshs 175.0 bn has been directed toward expanding medium and large-scale irrigation infrastructure and mechanization through public-private partnerships, with the goal of adding between 150,000 and 200,000 hectares under irrigation while increasing agricultural yields by up to 50.0%. To support financing efforts, the government is also considering the issuance of a Kshs 100.0 bn green bond, alongside expanding development finance guarantees and adopting innovative land-for-equity partnership structures.
Agricultural financing will receive Kshs 148.0 bn through a blended finance facility designed to lower lending risks by guaranteeing up to 50.0% of loans issued by participating institutions. The program is expected to improve credit access for nearly 2.5 mn smallholder farmers across the country. In addition, Kshs 120.0 bn has been allocated toward agro-industrialization and value addition initiatives, including the development of agro-processing zones along six major economic corridors aimed at increasing agricultural export earnings and reducing Kenya’s edible oil import bill.
To improve production efficiency, the government has earmarked Kshs 90.0 bn for farmer productivity programs, including the establishment of 500 Farmer Enterprise Clusters, expansion of the “Kenya Integrated Agricultural Management Information System” digital farmer identification system, and livestock genetic improvement initiatives. The government also plans to replace the universal fertilizer subsidy program with a Kshs 51.0 bn targeted digital e-voucher system to support vulnerable farmers, pastoralists, and fisherfolk through subsidized access to seeds, mechanization services, insurance, extension support, and agricultural credit.
Additional allocations include KSh85 billion for climate resilience and agricultural insurance, Kshs 55.0 bn for food safety and traceability systems, Kshs 45.0 bn for agricultural research, artificial intelligence, and data infrastructure, as well as Kshs 30.0 bn to strengthen agricultural institutions, county-level implementation, and extension services nationwide.
Through the investment plan, the government projects agricultural GDP growth will accelerate to between 6.0% and 7.0% annually while generating an estimated benefit-cost ratio of 1.9 times investment value and portfolio returns ranging between 12.0% and 19.0%. Authorities also estimate that de-risking mechanisms within the strategy could unlock an additional Kshs 500.0 bn in private capital beyond the private sector’s initial funding commitment.
The plan seeks to address persistent structural challenges within the sector, including irrigation coverage on less than 5.0% of arable land, maize yields that remain significantly below global averages, post-harvest losses of up to 40.0%, and limited value addition, with only 16.0% of agricultural output currently processed locally.
Despite the ambitious targets, the government estimates a financing gap of between Kshs 250.0 bn and Kshs 300.0 bn, mainly driven by cautious public expenditure projections and uncertainty surrounding donor commitments. To strengthen accountability, implementation will be managed through a three-tier governance framework comprising a national steering committee under the Ministry of Agriculture, county implementation committees, and continental oversight.
