The African Development Bank is working hard to connect farmers to market off takers and to accelerate the processing and value addition to food and agricultural commodities.
Dr. Akinwumi A. Adesina, President and Chairman of the Boards of Directors African Development Bank Group said this they are doing through the development and roll out of Agro-Industrial Processing Zones.
Speaking today at the two-day High-Level Conference on “Scaling Finance for Smallholder Farmers” conference in Nairobi that started yesterday, Adesina said that AfDB has committed USD 934.51 million to the Special Agro-Industrial Processing Zones,
The funds have also been matched with co-financing from their partners amounting to USD 938.27 million.
“Currently, we have 27 ongoing Special Agro-Industrial Processing Zones projects across 11 countries”, he added
However, Adesina said that despite lots of progress being made, one area that continues to remain a challenge for farmers, especially smallholder farmers, and small and medium sized agribusinesses, is lack of access to finance.
There exists an annual financing deficit of USD75 billion for farmers and small and medium enterprises.
Data from 35 lenders also found a perception of higher risks and lower returns by commercial banks to lending to agriculture-linked small and medium enterprises.
“We must find efficient ways to “de-risk” lending to farmers and small and medium enterprises. This can be achieved by absorbing incremental risk and thereby increasing lenders’ risk appetite and by leveraging outside private sector finance into the agricultural sector”, Adesina said .
He noted that the African Development Bank is also working with Mastercard and other partners on developing the “Mobilizing Access to the Digital Economy,” or the MADE Alliance Africa.
The Bank’s first phase commitment includes USD300 million to the MADE Alliance Africa’s initial five years of programming aiming to bring three (3) million farmers in Kenya, Tanzania and Nigeria into the digital economy.
“We will be consulting with our Board of Directors of the African Development Bank to establish a USD 500 million facility to unlock USD 10 Billion of financing for smallholder farmers, as well as small and medium sized agribusiness enterprises”, Adesina confirmed.
This will include the use of trade credit guarantees, first loss coverage, blended finance, and origination incentives that defray the high transaction costs of serving enterprises, as well as technical assistance.
The African Development Bank, Adesina said remains fully committed to collaborating with the Pan African Farmers’ Organization and its subsidiary farmers’ organizations, as well as development partners and financial institutions, to fully unlock financing for smallholder farmers and small and medium sized agribusiness enterprises.
Yesterday President William Samoei Ruto also conferred the country’s highest honour, Chief of the Order of the Golden Heart CGH, to Dr Akinwumi Adesina becoming the 20th recipient of the honour that was established in 1967
Agriculture and Livestock Cabinet Secretary Mutahi Kagwe making his remarks at the conference said the two-day meeting was the unique opportunity to place the farmer at the focal point of deliberations and crucially, transition the discussions from high-level interrogations of food security, food independence, nutrition, subsidies and financing into tangible, impacting deliverables for the farmer.
By Wangari Ndirangu
