O BAD mobiliza financiamentos para os pequenos agricultores

Monday, 24th March 2025

Por inAfrika Reporter

The African Development Bank (AfDB) is preparing to launch a groundbreaking $500 million financing facility designed to unlock $10 billion in support for smallholder farmers and small agribusinesses across Africa. The move, announced by Bank President Dr. Akinwumi Adesina during the High-Level Conference on Scaling Finance for Smallholder Farmers in Nairobi, aims to tackle one of Africa’s most persistent development challenges: financing the people who feed the continent.

“We stand on the threshold of making history,” Adesina said in his keynote, stressing the urgency of building alliances to close the financing gap for Africa’s farmers. The new facility is currently under review by AfDB’s Board of Directors and is expected to deploy a mix of financial instruments such as trade credit guarantees, first-loss coverage, blended finance mechanisms, and origination incentives. These will be supported by technical assistance to reduce high transaction costs.

The announcement comes amid growing recognition that agriculture in Africa remains severely underfinanced, despite its vast economic and social importance. Smallholder farmers, who produce about 80% of the continent’s food, are often locked out of formal financing due to perceived risks, poor infrastructure, and limited collateral. Only 6% have access to credit, and fewer than 20% use improved seeds.

The conference, organized in partnership with the Pan African Farmers’ Organization (PAFO), brought together policymakers, financial experts, and farmer representatives to address Africa’s estimated $75 billion annual agriculture financing gap. Adesina’s call to action was echoed by several leaders, including PAFO President Ibrahima Coulibaly, who declared, “If we want to save our continent from hunger, malnutrition, and poverty, we must create jobs in the agricultural sector.”

Dr. Beth Dunford, AfDB’s Vice President for Agriculture, Human, and Social Development, urged faster progress. “We must act now to change this reality,” she said, describing the current access levels as frustrating and unacceptable.

Significant strides have been made since the 2023 Dakar 2 Feed Africa Summit, where 34 African heads of state committed to prioritizing food security. Financial commitments to agriculture have jumped from $30 billion to $72 billion, with the African Development Bank alone pledging $10 billion. As part of this push, the Bank has already approved 77 projects worth $3.9 billion across 32 countries, with another $1.72 billion in approvals expected this year.

In terms of delivery, the Bank’s initiatives are having a visible impact. Its Technologies for African Agricultural Transformation (TAAT) program has reached 25 million farmers, increasing food production by 120 million tons through climate-resilient crops. The $1.5 billion African Emergency Food Production Facility has delivered seeds and fertilizers to 12.3 million farmers, generating over 37 million metric tons of food.

Other efforts include nearly $1 billion invested in Special Agro-Industrial Processing Zones and over $2.5 billion in funding through the Affirmative Finance Action for Women in Africa (AFAWA) program. The African Fertilizer Financing Mechanism has enabled access to 125,193 metric tons of fertilizer for nearly 777,000 farmers in nine countries.

To further de-risk agricultural value chains, AfDB’s Inputs Supplier Risk Sharing Program is active in Uganda, Kenya, Tanzania, Ghana, and Zambia, while the $300 million MADE Alliance Africa, in partnership with Mastercard, is digitally integrating 3 million farmers in Kenya, Tanzania, and Nigeria.

Kenya’s Cabinet Secretary for Agriculture and Livestock Development, Senator Mutahi Kagwe, captured the urgency: “If we prioritize innovative, practical measures, we will transform agriculture into a thriving business. Let’s commit to ensuring that no farmers are left behind due to lack of finance.”

As the conference closed, a panel of global and African financial experts called for better alignment between financial systems and farmers’ realities, reinforcing the need for government leadership in enabling a financial environment that supports rural growth. With the proposed facility, AfDB hopes to bridge the financing divide and transform African agriculture from a subsistence activity into a modern, sustainable, and thriving economic engine.