Low-cost fertilizers set to boost Kenyan agriculture industry
The Kenyan Government and Toyota Tsusho East Africa have partnered to fund the construction of a US$ 1.2 billion fertilizer plant to ease manufacturing, distribution and supply of fertilizers across the country.
The project kicked off in Uasin Gishu and will be implemented in two phases. The first stage entails constructing a Nitrogen Potassium Calcium (NPK) production plant and the second will be targeted at building the Diammonium Phosphate (DAP) urea and Calcium Ammonium Nitrogen (CAN) production plant.
The partnership aims to reduce the cost of fertilizers to the bare minimum. The Kenyan Government currently spends at least Sh3 billion to provide farmers with low-cost fertilizers at Sh1, 600 compared to the actual market rate of Sh3, 500. Failure to subsidize fertilizers could amount to food scarcity in the long run.
In this light, the first aim of this Toyota-Kenyan Government funded project is to open a window of opportunities to farmers to massively cut down the cost of this critical farming input. Professor Gitura Wainaina, Acting Director of the Vision 2030 Delivery Secretariat said that, the expected dividend of the venture upon completion of the local plant, is to reduce an estimated 40% rate, which is mainly due to port handling and freight charges earlier.
It is also anticipated that the plant should end ceaseless fertilizer shortages, which have hitherto been very expensive. This is because of the strategic location of the plant in Uasin Gishu which should be infrastructure ready as a Kenyan farmer said that “The location is great, close to Kenya’s bread basket.”
More importantly, the fertilizer plant is envisioned to be a solution to food insecurity which is currently threatening about 10 million Kenyans. The Ministry of Agriculture is actively involved in the process as the principal secretary reportedly said, “farmers should expect to receive fertilizer for the short rainy season by next month,” as they await the proceeds of the partnership next year.
Through this deal, government spending on subsidizing fertilizers for farmers will drastically reduce and the government should be able to move previously allocated shillings for fertilizer to other resources for the east African country.
Although this plant is first of its kind in Kenya, it is not the country’s first attempt at building a fertilizer plant. The MEA Limited is a Kenyan owned fertilizer blending firm that has planned to set up a plant in Nakuru in October with a Sh3 billion budget dependent on a loan from the International Finance Corporation (IFC). Both plans are set to have a positive impact on Kenya.