Investors now warm up to Kenya's livestock sector after years of neglect

Kenya’s vibrant livestock sector, which supports an estimated 25 million livelihoods and contributes 42 per cent to the national agricultural Gross Domestic Product (GDP), has not been attracting investment finances for years.

While private-sector investments in agriculture have been growing, private-sector investments in the livestock sector remain negligible and underfinanced.

Since 2015, investors have made over $500 million (Sh73 billion) in agriculture, with only 10 per cent of this being in livestock-related ventures, according to a recent study on Kenya’s livestock investor landscape.

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The study sheds light on key factors that hindered investment in livestock financing.

The Livestock Investor Landscape study, conducted by Gatsby Africa, the International Livestock Research Institute (ILRI) and AgThrive, which assessed over 80 investors ranging from impact investors to commercial banks, reveals specific concerns such as informality of the sector, risks at the production level like disease outbreaks and weather-related risks as the main hindrance to livestock financing in Kenya. The study findings were unveiled at the Livestock Investors Convening and Pitch Event, which brought together livestock businesses, investors, and development agencies to share insights on the livestock investment ecosystem in Kenya.

The forum provided a platform for industry stakeholders to showcase innovative livestock business ventures, exchange insights and explore collaborative opportunities to unlock further investment for the Kenya livestock sector.

 “Dairy and poultry received more than 50 per cent of the deals reviewed in our study, underscoring investors’ perception of lower risk in these value chains. Their established businesses, strong revenue streams and reliable consumer demand through formal marketing outlets such as supermarkets make them particularly attractive,” explained Director at AgThrive Kristin Girvetz.

However, of late, there’s renewed interest, and the livestock sector has started attracting the attention of investors despite significant financial hurdles.

This is due to the demand for livestock products projected to grow by up to 50 per cent by 2030, which shows there’s a clear opportunity for strategic investments to drive growth and innovation in the sector and ensure that livestock production is done sustainably to mitigate environmental and social harms.

The study’s findings funded by the Bill & Melinda Gates Foundation through the Global Livestock Advocacy for Sustainable Development (GLAD) project implemented by ILRI and Gatsby Africa, indicate increasing demand for investments, suggesting the need for active pipeline development and collaboration among investors, while businesses must ensure they are “investment ready.”

“Capital is plenty, at least in the short term, but identifying viable investment opportunities remains a challenge for investors,” said Arjun Bhoopal from Gatsby Africa. “Through collaboration with investors and businesses, we can explore new avenues to mitigate risk and reduce financing costs, driving investments across Kenya and the continent.”

Arjun was speaking during the Livestock Investor Convening and Pitch event in Nairobi, where various entrepreneurs working on solutions within livestock and poultry value chains in Kenya also showcased their innovative businesses and pitched for financial support.

One of the entrepreneurs is Dr Chris Silali, founder and CEO of GenePlus, a last-mile distribution company of animal health technologies including bovine genetics and vaccines.

The company focuses on underserved smallholder farmers in rural and remote areas. Farmers can conveniently access GenePlus products and services via USSD, enhancing affordability and accessibility.

By sourcing products directly from manufacturers, GenePlus achieves a 40 per cent reduction in prices for customers. The company plans to start manufacturing liquid nitrogen, to cut costs during the expansion of its operations to other areas in Kenya.

Another entrepreneur is Ibrahim Hilowle, co-founder and CEO of M-Nomad, a trading marketplace that connects pastoralists selling livestock to buyers, cutting out brokers and other middlemen to improve prices and trading efficiency.

With a user-friendly interface, the platform enables transparent transactions enabling pastoralists to easily sell their livestock and buyers to access high-quality livestock.