Sapling of growing plants on stacked coins and fertile soil, the concept for investment for agriculture and cultivation. [Getty Images]
In development discussions, the challenge of “sealing the leaking pipeline” in the financing of agriculture and food systems is gaining prominence.
Conversations, such as those recently hosted by PwC with experts from government, farmer organisations, financial institutions, development partners, agribusinesses, and governance, consistently reveal a key paradox: a significant discrepancy exists between agriculture’s vital economic contributions—for instance, its substantial share of Kenya’s GDP (33 per cent) and its employment of a large portion of the population (70 per cent of Kenya’s rural population)—and the limited financial resources allocated to it, including the small portion of national budgets it receives and the low levels of private sector lending it attracts.
We specifically examined whether and how financial leakages—such as diversion of funds, wastage, fraud, or corruption—contribute to the chronic underfunding and under-prioritisation of agriculture. Three key questions emerged during the insightful deliberations.
The first was: To what extent does corruption influence the diversion of public resources from agriculture? A story shared by veteran anti-corruption advocate Jack Blum in a Tax Justice Network podcast provided a striking analogy. He recalled a case where a US aircraft manufacturer had bribed a South American government to purchase a cargo plane—a model for which they were the sole producer.
When asked why a bribe was necessary without any competitors, the manufacturer’s response was enlightening: they weren’t competing with other suppliers, but with the country’s other budgetary priorities. This resonates with Kenya’s situation—our agricultural budget often competes with other priorities, and without transparency and accountability, agriculture consistently loses. The second question was: Do third-party financiers—such as private banks, agro-processors, development finance institutions (DFIs), and private equity firms—avoid agriculture because they mistrust its ability to offer fair and competitive returns?
Agriculture is undeniably risky, with exposure to unpredictable weather and volatile commodity prices. Yet participants highlighted promising de-risking initiatives, such as crop insurance, digital e-vouchers, and market stabilisation mechanisms.
However, from the forensics and insolvency work we do, we’ve seen numerous cases that erode investor confidence. These include borrowers falsifying loan application data, colluding with credit appraisers, providing fake collateral, diverting revenue earmarked for debt service, or contract farmers breaching agreements to sell their produce elsewhere.
Such practices discourage funders, though it’s worth noting that credit fraud is not unique to agriculture and shouldn’t be a blanket excuse for avoiding the sector.
The third and perhaps most fundamental question was: Should agriculture be funded not only for financial returns, but as a public good essential to national well-being?
Agriculture is central to realising the right to food. It employs the majority of Kenyans and supports access to education, healthcare, housing, and sanitation. A thriving agriculture sector also lays the foundation for industrialisation, catalysing broader economic transformation. Indeed, many of the world’s most successful economies used agriculture as the launchpad for industrial development. It is therefore troubling that, six decades after independence, Kenya is still struggling to feed all its citizens.
It’s time we, as government, private sector, civil society, and citizens, ask ourselves what we must do—individually and collectively—to make Kenya food secure and to realize the full potential of our agricultural sector.
From the perspective of financial leakage, potential solutions must begin with a fundamental cultural shift, where doing the right thing becomes a shared value. Strengthening data collection, analysis, and transparency is also critical. Presently, data on agricultural financing is fragmented, often siloed, and rarely accessible for meaningful decision-making or accountability.
We need systems that enable tracking of funds to ensure they reach their intended beneficiaries. Community groups, if empowered with accurate and timely data, can become agents of social accountability, holding institutions and officials to account.
Digitisation also holds great promise. Tools like e-procurement systems, biometric farmer registration, and digital voucher platforms are already improving trust and efficiency in agri-food value chains. Technology, when applied with the right governance structures, can help plug many of the leaks. The FINAS conversations have laid a critical foundation. Going forward, it is vital that policymakers, community leaders, financial institutions, and development actors continue to engage and take concrete steps. Kenya’s agricultural potential is not in question.
What remains is our collective will to ensure that financing reaches where it is most needed, leakages are addressed, and agriculture is positioned as the growth engine it truly can be.
The author is a Partner at PwC Kenya and Forensics Lead for the Eastern Africa Region
Sapling of growing plants on stacked coins and fertile soil, the concept for investment for agriculture and cultivation.
[Getty Images]
In development discussions, the challenge of “sealing the leaking pipeline” in the financing of agriculture and food systems is gaining prominence.
Conversations, such as those recently hosted by PwC with experts from government, farmer organisations, financial institutions, development partners, agribusinesses, and governance, consistently reveal a key paradox: a significant discrepancy exists between agriculture’s vital economic contributions—for instance, its substantial share of Kenya’s GDP (33 per cent) and its employment of a large portion of the population (70 per cent of Kenya’s rural population)—and the limited financial resources allocated to it, including the small portion of national budgets it receives and the low levels of private sector lending it attracts.
We specifically examined whether and how financial leakages—such as diversion of funds, wastage, fraud, or corruption—contribute to the chronic underfunding and under-prioritisation of agriculture. Three key questions emerged during the insightful deliberations.
The first was: To what extent does corruption influence the diversion of public resources from agriculture? A story shared by veteran anti-corruption advocate Jack Blum in a Tax Justice Network podcast provided a striking analogy. He recalled a case where a US aircraft manufacturer had bribed a South American government to purchase a cargo plane—a model for which they were the sole producer.
When asked why a bribe was necessary without any competitors, the manufacturer’s response was enlightening: they weren’t competing with other suppliers, but with the country’s other budgetary priorities. This resonates with Kenya’s situation—our agricultural budget often competes with other priorities, and without transparency and accountability, agriculture consistently loses. The second question was: Do third-party financiers—such as private banks, agro-processors, development finance institutions (DFIs), and private equity firms—avoid agriculture because they mistrust its ability to offer fair and competitive returns?
Agriculture is undeniably risky, with exposure to unpredictable weather and volatile commodity prices. Yet participants highlighted promising de-risking initiatives, such as crop insurance, digital e-vouchers, and market stabilisation mechanisms.
However, from the forensics and insolvency work we do, we’ve seen numerous cases that erode investor confidence. These include borrowers falsifying loan application data, colluding with credit appraisers, providing fake collateral, diverting revenue earmarked for debt service, or contract farmers breaching agreements to sell their produce elsewhere.
Such practices discourage funders, though it’s worth noting that credit fraud is not unique to agriculture and shouldn’t be a blanket excuse for avoiding the sector.
The third and perhaps most fundamental question was: Should agriculture be funded not only for financial returns, but as a public good essential to national well-being?
Agriculture is central to realising the right to food. It employs the majority of Kenyans and supports access to education, healthcare, housing, and sanitation. A thriving agriculture sector also lays the foundation for industrialisation, catalysing broader economic transformation. Indeed, many of the world’s most successful economies used agriculture as the launchpad for industrial development. It is therefore troubling that, six decades after independence, Kenya is still struggling to feed all its citizens.
It’s time we, as government, private sector, civil society, and citizens, ask ourselves what we must do—individually and collectively—to make Kenya food secure and to realize the full potential of our agricultural sector.
From the perspective of financial leakage, potential solutions must begin with a fundamental cultural shift, where doing the right thing becomes a shared value. Strengthening data collection, analysis, and transparency is also critical. Presently, data on agricultural financing is fragmented, often siloed, and rarely accessible for meaningful decision-making or accountability.
We need systems that enable tracking of funds to ensure they reach their intended beneficiaries. Community groups, if empowered with accurate and timely data, can become agents of social accountability, holding institutions and officials to account.
Digitisation also holds great promise. Tools like e-procurement systems, biometric farmer registration, and digital voucher platforms are already improving trust and efficiency in agri-food value chains. Technology, when applied with the right governance structures, can help plug many of the leaks. The FINAS conversations have laid a critical foundation. Going forward, it is vital that policymakers, community leaders, financial institutions, and development actors continue to engage and take concrete steps. Kenya’s agricultural potential is not in question.
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What remains is our collective will to ensure that financing reaches where it is most needed, leakages are addressed, and agriculture is positioned as the growth engine it truly can be.
The author is a Partner at PwC Kenya and Forensics Lead for the Eastern Africa Region
By John Kamau