Diaspora food security bond will unlock Kenya’s agriculture potential

Robert Chiuri, President & CEO, Food Security Consortium-USA & Kenya

Kenya needs about $30 billion (Sh3.9 trillion) to create long term food security for its people that is not dependent primarily on seasonal rain regime or negative forces of Climate Change, a research by the Food Security Consortium – USA and Kenya has said.

The amount can be raised through government guaranteed Food Security Bond (FSB) or Diaspora-raised food security bonds.

There's a lot of goodwill in the Kenyan Diaspora community to participate in poverty alleviating projects in Kenya. The best way to defeat centuries-long poverty in Kenya is a concerted effort, all hands-on deck approach, by all Kenyans including the Government of Kenya, private enterprises and private investors and Kenyan Diaspora, among others.

We propose that the Government of Kenya forms a Food Security Authority to work with us in order to provide leadership on food, agriculture, value chains, natural resources, climate change, rural development, nutrition, and related issues based on public policy, the best available science and effective management to enhance food security.

Kenyans living abroad are keen to invest back home in irrigated agriculture. We are ready to contribute to financing, provide expertise, innovation, technology and other inputs in projects geared to solving perennial food insecurity in Kenya and thus enable economic freedoms for all Kenyans.

Basic economic freedom we envisage with this initiative is a Kenya where every citizen has adequate food nutrition, clothing, affordable sanitary, shelter and enhanced food security. We are glad the Government of Kenya, through the State Department for Irrigation, has launched the National Irrigation Sector Investment Plan, an ambitious blueprint that aims to coordinate efforts around irrigation.The goal is to put an additional 1,000,000 acres of land under irrigation and optimise utilisation in the next ten years.

We followed keenly this launch from the Diaspora as the Cabinet Secretary for Water, Sanitation and Irrigation stated that a total cost of 598 billion shillings shall be required to actualise these targets with 61 per cent coming from the private sector and 39 per cent from public funding. The government went ahead to list various pathways or initiatives through which investors can venture into irrigation including corporate schemes, public schemes, community irrigation projects, farmer-led projects and Arid and Semi-Arid (ASAL) projects.

We believe that this is the right time for the government to consider our proposed Diaspora Food Security Bond as an additional pathway to achieving food security. Bonds are financial instruments that can be issued by governments and water companies to raise capital to fund water-related projects. The proceeds can be used to develop or improve water infrastructure like treatment plants, sewer management systems and distribution networks.

The opportunity will help water companies fulfil their development projects on a larger scale without heavy reliance on government and development partners funding. The President is committed to raising money from the capital markets and this initiative and the issuance of green finance and ESG frameworks are the future of the capital markets.

Normally, Water Service Providers get funding from tariffs, taxes and transfers and repayable finances like loans, bonds and equity investments. Previously, the State attempted to attract private contributions through the Kenya Pooled Water Fund, which was incorporated in the Water ministry's 2018-22 strategic plan.The project aimed to raise Sh10 billion from local bond markets but did not achieve its goal. We can do it differently and make it work.

Dr Robert Chiuri is the President & CEO, Food Security Consortium-USA & Kenya - [email protected]