IFAD - Afrikan Heroes

African Countries Commit to Double Agricultural Productivity

May 2, 2021

A coalition of multilateral development banks and development partners has pledged over $17 billion in financing to address rising hunger on the African continent, and to improve food security. These funds were pledged on the final day of a two-day high-level dialogue called Feeding Africa: leadership to scale up successful innovations. The African Development Bank and the UN’s International Fund for Agricultural Development (IFAD) hosted the event in partnership with the Forum for Agricultural Research in Africa (FARA) and the CGIAR System Organization on 29 and 30 April.

Seventeen African heads of state signed on to the commitment to boost agricultural production by doubling current productivity levels through the scaling up of agro-technologies. This will include investing in access to markets, and promoting agricultural research and development. The various parties adopted a communiqué outlining these commitments at the end of the event.

Of the overall amount pledged, more than $10 billion came from The African Development Bank, which said it would invest $1.57 billion on scaling up 10 selected priority commodities over the next five years. This will help countries achieve self-sufficiency. Another $8.83 billion will go towards building strong value chains for these commodities over the next five years. This will include programs to create opportunities for young people – particularly women.

African Development Bank President Dr. Akinwumi A. Adesina said: “Let us now create today, a stronger partnership: a partnership for greater scale; a partnership to take technologies and innovations to hundreds of millions of farmers.”

The International Fund for Agricultural Development said it aimed to provide an additional $1.5 billion to support national efforts to transform food and agricultural systems in Africa over the next three years. IFAD will also invest more in creating the pre-conditions for increased agricultural productivity. The organization is helping to develop a growing pipeline of investments to restore land, create jobs and build resilience to climate change in the Sahel region. This will contribute to the Green Great Wall objectives, and will create 10 million jobs in the region by 2030.

IFAD President Gilbert F. Houngbo said: “We praise the African leaders’ commitment to increase agricultural productivity and improve food security for millions of Africans. By modernizing African agriculture, small-holder farmers will be in a better position to bring more affordable food to consumers and create decent livelihoods for millions of young Africans involved in the processing, storage and marketing of food.”

The Arab Bank for Economic Development in Africa (BADEA), committed up to $1.5 billion over the period 2020-2024 in agriculture. The Islamic Development Bank Group said it would earmark $3.5 billion to develop the agriculture sector in Africa in the next three years. It said these investments will develop commodity value chains for both staple food and cash crops.

In an additional show of solidarity, The Bill & Melinda Gates Foundation, joining a coalition of development partners, declared that it will invest $652 million in the next three years. This will support agricultural research and development initiatives in Africa. This funding is expected to empower 300 million farmers with a host of new innovations.

President Macky Sall of Senegal summed up interventions by African heads of state on Thursday with the following seven-point action list: Accelerate agricultural production by taking technologies to scale. Increase investment in research and development. Optimize technology. Improve business language in agriculture to open up to the world. Support access to markets and the installation of basic infrastructure and equipment.Invest in new businesses to transform agricultural produce to support small producers. Create a financing facility for food security and nutrition in Africa.

The forum communiqué reflected these action points, emphasizing the call for a financing facility for food security in Africa. It was felt that this would be an appropriate channel for scaling up climate resilience and successful agricultural technologies. It will include digital innovations to farmers across Africa, and will allow countries to better address malnutrition and stunting.

Sub-Saharan Africa has a quarter of the world’s arable land but only produces 10% of its agricultural output. The low productivity of staple crops makes African agriculture uncompetitive. As a result, the continent imports one-third of the calories that it consumes. This makes food systems more vulnerable and dependent on external food supply chains.

The outcomes from this week’s Leaders’ Dialogue will be communicated to the UN Secretary General as Africa’s commitments towards the UN Food Systems Summit in September this year. They will lay the foundation for Africa to present a unified voice to step up efforts and partnerships towards reaching the Sustainable Development Goals by 2030.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

IFAD Invests US$9 million In Fund Helping Rural SMEs In Africa

April 24, 2020

In a continuation of its efforts to help small-scale farmers and micro-, small and medium size rural enterprises in developing countries create jobs and increase incomes, the International Fund for Agricultural Development (IFAD) has announced an investment of US$9 million (€8.4 million) into the Agri-Business Capital (ABC) Fund, a blended capital impact fund.

“The private sector’s involvement in the eradication of hunger and poverty was crucial before the COVID-19 crisis. Now it has become even more important as we work to reduce some of the immediate impacts of the crisis and plan for a longer-term recovery when it is over,” said Gilbert F. Houngbo, President of IFAD. “More than ever, we need to join forces with the private sector to help small-scale producers and rural SMEs preserve and create jobs for those who are more likely to be left behind.”

Here Is All You Need To Know

The investment was made possible thanks to a contribution from the Swiss Agency for Development and Cooperation. It is the first time that IFAD, a specialized United Nations agency and international financial institution, is investing directly into a private sector entity.
Under its private sector engagement strategy adopted in September 2019, IFAD can now directly fund private sector entities and invest in funds targeting rural small and medium size enterprises (SMEs) and small-scale producers’ cooperatives.
This enables IFAD to fund a wider range of projects increasing poor rural peoples’ productive capacities, improving their benefits from market participation and promoting the use of climate-smart practices. IFAD’s strategy also aims to attract more private sector funding to the small-scale agriculture sector.
Small-scale producers and rural SMEs have always faced real difficulties in accessing the funding they need to grow their businesses. With COVID-19, their situation could become even more precarious without necessary support.
Prior to the COVID-19 crisis, the demand of $240 billion far exceeded the available supply of about $70 billion, leaving a funding gap of roughly $170 billion. About 70 per cent of the demand of approximately 270 million small producers in Latin America, sub-Saharan Africa, and South and South-East Asia was unmet.

“Small-scale farmers and rural SMEs are the backbone of the economy of their countries. They have a very high potential for growth and can create jobs — especially for the youth — and drive development in their communities and countries, but they need resources to invest,” added Houngbo.

Why IFAD Chose To Invest In Agri-Business Capital (ABC) Fund

The Agri-Business Capital (ABC) Fund catalyses blended capital and invests in underserved segments of agribusiness value chains focusing on farmer organizations, financial intermediaries and agribusiness SMEs.
It particularly targets commercially viable ventures that can help create employment, in particular for youth and women, and improve rural livelihoods.
The fund also prioritizes climate-smart projects that promote sustainable production.
Originally sponsored by IFAD in 2019, the ABC Fund, now an independent private investment fund, is structured to blend public with private capital.
It also provides technical assistance to investees through a dedicated facility.
It received contributions from the European Commission, the Organisation of Africa, Caribbean and Pacific States, Luxembourg and the Alliance for a Green Revolution in Africa. It has a target size of €200 million.

How Agri-Businesses In Africa May Go About Accessing The Fund

The ABC Fund is managed by Bamboo Capital Partners, a commercial private equity firm with a specialisation in impact investments.
In December 2019, the ABC Fund disbursed its first investment to a cooperative in Côte d’Ivoire collecting and marketing cocoa from and for its small producer members, benefiting over 2,700 cocoa farmers.
Additional investments have been since approved and more are planned in the coming months benefiting cooperatives, SMEs, savings and credit cooperatives and micro-finance institutions.
IFAD’s investment in the ABC Fund is part of a wider plan to scale up IFAD’s engagement with the private sector and design innovative instruments to help increase investments in rural areas and help the private sector overcome the challenges of investing in small-scale agriculture, recognising that rural SMEs constitute an untapped business opportunity.

About IFAD

The International Fund for Agricultural Development (IFAD) invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided US$22.4 billion in grants and low-interest loans to projects that have reached an estimated 512 million people. IFAD is an international financial institution and a United Nations specialized agency based in Rome — the United Nations food and agriculture hub.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer