Lobby to set up Sh98b coffee fund

A coffee worker at Gacatha Coffee Factory on July 4, 2019. [Kibata Kihu/Standard]

Kenya’s struggling coffee value chain is set for a makeover as investors come calling.

The Inter-African Coffee Organisation (IACO) said it has set up a Sh98 billion Africa Coffee Facility (ACF) to address the obstacles facing the sector’s growth on the continent, including Kenya.

The 10-year plan involves a $500 million (Sh51.5 billion) investment in building a sustainable coffee supply chain, $100 million (ShSh10.3 billion) on improving demand and market linkages as well as  $200 million (ShSh20.6 billion) on putting in place climate change adaptation and environmentally resilient practices.

Another $150 million (ShSh15.4 billion) will go towards promoting knowledge management and dissemination. The lobby said the funds will be raised through loans and grants.

“We intend to professionalise the whole coffee value chain by working with individual producers, producer organisations or aggregators, local roasters, exporters and the regulatory bodies within the countries,” said IACO in a concept paper released during a partners’ and donors’ forum in Nairobi on Tuesday.

The announcement comes at a time when the sector is experiencing a myriad of challenges that have seen output among key producers, including Kenya, decline drastically in recent years.

“The contribution of Africa’s coffees to the world trade has significantly declined since the 1970s, falling from  a total production of 22 million 60kg bags in 1970, which represented 30 per cent of global production, to the 16 million 60kg bags produced currently, reflecting a 23 per cent decline,” said IACO Secretary General Fred Kawuma.

Dr  Kawuma further noted that the volume of exports from the continent fell from 17 million bags in 1970 to 12 million bags, representing a 28 per cent decline.

Agriculture and Livestock Cabinet Secretary Mwangi Kiunjuri said coffee production systems in Africa are still inefficient and require urgent and effective interventions.