AfDB’s $500m facility to unlock $10bn for farmers, agribusinesses in Africa

The President of the African Development Bank Group (AfDB), Dr Akinwumi Adesina, has concluded plans to launch a $500 million facility designed to unlock $10 billion in financing for smallholder farmers and small agribusiness enterprises across Africa.  Speaking at the high-level Conference on Scaling Finance for Smallholder Farmers in Nairobi, Adesina revealed that the bank’s […]

The President of the African Development Bank Group (AfDB), Dr Akinwumi Adesina, has concluded plans to launch a $500 million facility designed to unlock $10 billion in financing for smallholder farmers and small agribusiness enterprises across Africa. 

Speaking at the high-level Conference on Scaling Finance for Smallholder Farmers in Nairobi, Adesina revealed that the bank’s management is currently consulting with its board of directors on establishing the facility.

The conference was organised in partnership with the Pan African Farmers’ Organization (PAFO) with the aim to address Africa’s critical $75 billion annual financing gap for farmers and agricultural enterprises. 

The facility, according to a statement, will deploy multiple financial instruments, including trade credit guarantees, first-loss coverage, blended finance mechanisms, and origination incentives to reduce the high transaction costs of serving enterprises, complemented by technical assistance. 

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“We 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,” Adesina said in the statement shared by APO Group.

The AfDB president, who was recently awarded Kenya’s highest national honour by President William Ruto, called for global action: “Together, let us unleash the potential of agriculture in Africa. Let us make Africa the breadbasket of the world. And together, let us feed Africa with pride!” 

The bank has launched several major initiatives to strengthen smallholder farmers. 

The Technologies for African Agricultural Transformation (TAAT) initiative has reached 25 million farmers with high-yield, climate-resilient crops, boosting the continent’s food production by 120 million tons. 

The African Emergency Food Production Facility, a $1.5 billion programme, has delivered 459,000 tons of seed and 2.8 million tons of fertilizer to 12.3 million farmers, producing 37.6 million metric tons of food. 

The Special Agro-Industrial Processing Zones initiative has invested $934.51 million, with $938.27 million in co-financing, supporting 27 projects in 11 countries. 

The Affirmative Finance Action for Women in Africa (AFAWA) programme has approved $2.52 billion in funding for 24,000 women-led businesses. 

The African Fertilizer Financing Mechanism has implemented trade credit guarantees in nine countries, distributing 125,193 metric tons of fertilizer worth $62.8 million to 776,971 smallholder farmers. 

The Inputs Supplier Risk Sharing Programme, a $600 million initiative, is working to de-risk input supply chains in Uganda, Kenya, Tanzania, Ghana, and Zambia.

The Mobilising Access to the Digital Economy (MADE) Alliance Africa, in partnership with Mastercard, has seen the bank commit $300 million to integrate three million farmers in Kenya, Tanzania and Nigeria into the digital economy.