In a move to tackle Africa’s critical financing gap in agriculture, the African Development Bank Group (AFDB) President, Dr. Akinwumi Adesina, has announced plans to launch a $500 million facility aimed at unlocking $10 billion in financing for smallholder farmers and small agribusinesses across the continent.
The initiative, designed to address the financial challenges faced by the backbone of Africa’s agriculture, is currently under consultation with the bank’s Board of Directors.
Speaking at the High-Level Conference on Scaling Finance for Smallholder Farmers in Nairobi, Adesina revealed that the new facility would deploy innovative financial instruments, such as trade credit guarantees, first-loss coverage, blended finance mechanisms, and origination incentives.
Hde revealed that these tools aim to reduce the high transaction costs associated with financing small-scale enterprises, with technical assistance playing a key role in the overall strategy.
Adesina in his keynote address, emphasized the importance of a concerted effort to unlock Africa’s agricultural potential stating that the bank stand on the threshold of making history by pushing the boundaries of innovation and building extensive collaborative alliances to bridge the financing gap faced by smallholder farmers and agribusinesses on the continent.
The conference, organized in partnership with the Pan African Farmers’ Organization (PAFO), highlighted the alarming $75 billion annual financing gap faced by farmers and agricultural enterprises across Africa.
Adesina then called for global action; urging international stakeholders to unite in making Africa the “breadbasket of the world,” while emphasizing the importance of feeding the continent with pride.
With the introduction of this new $500 million funding facility, the AFDB is set to take another significant step toward transforming Africa’s agricultural landscape, boosting food security, and empowering smallholder farmers across the continent.
