The African Development Bank (AfDB) is connecting farmers to market offtakers to enhance food processing and agricultural value addition through Agro-Industrial Processing Zones. President Dr. Akinwumi A. Adesina announced a USD 934.51 million commitment, alongside a USD 75 billion financing gap challenge for farmers. Initiatives like the MADE Alliance aim to bring farmers into the digital economy, while proposed funding facilities could unlock USD 10 billion for smallholder farmers and agribusinesses.
The African Development Bank (AfDB) is actively enhancing the connectivity between farmers and market off takers to promote food processing and value addition in agricultural commodities. This initiative includes the rollout of Agro-Industrial Processing Zones, as highlighted by AfDB President Dr. Akinwumi A. Adesina during the “Scaling Finance for Smallholder Farmers” conference in Nairobi.
AfDB has pledged a financial commitment of USD 934.51 million to develop these Special Agro-Industrial Processing Zones, which is complemented by USD 938.27 million from co-financing partners. Currently, there are 27 active projects across 11 countries aimed at improving agricultural productivity and market access for farmers.
Despite significant advancements, access to finance remains a critical barrier for smallholder farmers and small to medium-sized agribusinesses, with an observed annual financing gap of USD 75 billion. A study by 35 lenders indicated a tendency among commercial banks to perceive higher risks and lower returns when financing agriculture-linked businesses.
Adesina emphasized the need to “de-risk” lending practices by mitigating risks to increase appetites for agriculture investments and by engaging private sector finance. The AfDB is partnering with Mastercard on the MADE Alliance Africa to integrate three million farmers into the digital economy over the next five years, with an initial investment of USD 300 million.
Furthermore, AfDB plans to consult its Board on establishing a USD 500 million facility aimed at generating USD 10 billion in financing for smallholder farmers and agribusinesses using trade credit guarantees, blended finance, and technical assistance. AfDB reiterates its commitment to collaborating with farmers’ organizations and financial institutions to minimize barriers to financing.
During the conference, Kenyan President William Samoei Ruto awarded Dr. Akinwumi Adesina with the Chief of the Order of the Golden Heart, the country’s highest honor, recognizing his contributions since the award’s inception in 1967. Agriculture and Livestock Cabinet Secretary Mutahi Kagwe noted the conference as a vital platform for centering farmer discussions on essential topics like food security, independence, and financing, translating these conversations into actionable outcomes for farmers.
The AfDB’s initiatives focus on connecting farmers to markets, enhancing financial access, and promoting agricultural value addition through Agro-Industrial Processing Zones. Despite efforts to tackle financing challenges, commercial banks continue to be hesitant in lending to agriculture. Collaborative projects like made Alliance Africa aim to digitalize farming efforts, while new funding facilities are being proposed to unlock substantial financing for smallholder farmers. The commitment to enhancing agricultural productivity and supporting farmers is crucial for improving food security in Africa.
Original Source: www.kenyanews.go.ke
