Livestock sector draws increased investor interest

A recent study has uncovered promising prospects for significant growth within Kenya’s livestock sector, fueled by escalating investor interest and a burgeoning availability of funding.

Conducted by Gatsby Africa, the International Livestock Research Institute (ILRI), and AgThrive, the study, named The Kenya Livestock Investor Landscape, highlights a newfound recognition among investors of the vast potential inherent in the industry. This recognition sets the stage for a potential exponential expansion in Kenya’s livestock sector.

The report indicates a growing interest from impact investors in funding opportunities within the livestock sector, particularly those prioritizing benefits for smallholder and pastoralist producers. Additionally, commercial banks are showing a willingness to increase their exposure to the livestock and agriculture sectors, albeit with a cautious approach due to perceived risks. Some banks are tailoring financial products to suit specific subsectors, such as offering working capital loans for operations within the beef value chain.

The findings of the study were unveiled at the Livestock Investors Convening and Pitch Event, where industry stakeholders converged to exchange insights and explore collaborative opportunities aimed at unlocking further investment for Kenya’s livestock sector.

Despite the sector’s significant contribution to the country’s Gross Domestic Product (GDP), nutrition, and livelihoods, it remains chronically underfinanced in Kenya and across Africa. To meet the escalating demand projected for 2030, investment in the sector is deemed essential.

Shirley Tarawali, Assistant Director General at ILRI, emphasizes the critical role of finance in driving sustainable growth within the livestock sector, benefiting smallholder farmers, climate adaptation efforts, and Kenya’s overall economic development agenda. However, challenges such as the lack of structured offtake markets, informality within the sector, and inadequate traceability and quality standards hinder investment traction.

Moreover, the absence of “investor-ready” businesses, coupled with a lack of essential documentation and weak financial projections, poses additional challenges to potential investors. Addressing these challenges requires collaborative efforts between businesses, investors, donors, and development practitioners to mitigate risks and reduce financing costs.

While past investments have primarily focused on established value chains like poultry and dairy, the study indicates diverse investor interests across all value chains and supply chain stages. However, there is a need for concerted efforts to address barriers to investment and foster a conducive environment for sustainable growth within Kenya’s livestock sector.

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