Nairobi Sh10bn tractors deal with India ends in June without purchase

A Sh10 billion loan that Nairobi inked with India for agricultural mechanisation will expire in June without Kenya buying a single tractor.

India High Commissioner to Kenya Rahul Chhabra said New Delhi last month informed the Treasury that it would need to apply afresh for the funding following delays in offering a plan to access the loan.

President Uhuru Kenyatta and Indian Prime Minister Narendra Modi signed the loan deal in 2017 to increase production from small-scale farmers through mechanisation and training.

“There are only three months left and it has nearly lapsed. The Kenyan Treasury will have write to us seeking a renewal and then we will go through approvals in New Delhi,” Mr Rahul said.

The Indian High Commissioner said the Kenyan government had requested to change some of the terms of the loan.

The changes were to include cold storages for perishable items such as fish and training to boost the farmers’ skills.

The Sh10 billion concessional loan came with an annual interest of 1.5 per cent and was to be repaid over a period of 25 years.

The delays by Treasury to submit the plan come a year after Agriculture PS Richard Lesiyampe directed all 47 counties to submit proposals on their equipment and technology needs for approval.

Agriculture is Kenya’s biggest employer but low levels of mechanisation have hurt production and earnings from the sector.

Experts have called for increased budgetary allocations for the industry.

In 2017, Food and Agriculture Organisation said while volume of maize production and area under cultivation have expanded since independence, Kenya has only managed to raise its yield per hectare by 40,000.