Nairobi Chamber calls for creation of Agricultural Development Bank
The Nairobi Chamber of Commerce, a chapter of the Kenya National Chamber of Commerce and Industry (KNCCI), has asked the government to allocate funds for the creation of an Agricultural Development Bank.
Speaking during the sixth Agritec International Exhibition and Conference held at KICC on Wednesday, Nairobi Chamber Chairman Mr. Jimnah Mbaru said a well-capitalized Agricultural Development Bank would help in improving total factor productivity in the agricultural sector.
“I recommend the creation of an Agricultural Development Bank funded by the government to the tune of 100 billion to finance activities in the entire agricultural value chain,” he said.
Mr. Mbaru noted that that the agricultural sector remains chronically under-resourced, under-invested and unproductive with less than four percent in annual budgetary allocation and below five percent of commercial lending.
“I urge a change of pension fund regulations to allocate at least five percent towards investments in the agricultural sector. With pension funds estimated at over Ksh. 1.2 trillion, a five percent allocation towards the agricultural sector would immediately unlock additional capital of about 60 billion that the Agricultural Development Bank can tap by issuing corporate bonds through the Nairobi Securities Exchange,” said Mbaru.
Mbaru argued that the agricultural sector is as important as infrastructural projects such as the Standard Gauge Railway (SGR) in which the government had spent over Sh.360 billion.
He also called for the transformation of the National Cereals and Produce Board (NCPB) into a warehouse receipting corporation where farmers can store their grains in exchange of warehouse receipts.
He said the move would position farmers to derive maximum benefit from their produce by shielding them from typical price gyrations that are occasioned by changes in supply.
He called upon the government the government to expedite the creation of Kenya National Multi Commodities Exchange Limited (KOMEX) where farmers can trade the warehouse receipts and to help in the elimination of unnecessary middlemen in the value chain.
The annual event was also attended by Nairobi Chamber Vice Chairman Geoffrey Kimani and Director Charles Gitau who discussed how the chamber could intervene in solving problems affecting youth and women in agribusiness.