The African Development Bank is working to link farmers with market offtakers to enhance food processing and value addition. Dr. Akinwumi A. Adesina highlighted a commitment of USD 934.51 million to Special Agro-Industrial Processing Zones, a significant investment aimed at resolving financing gaps. Collaboration with partners, alongside plans for a USD 500 million facility, aims to bolster support for smallholder farmers.
The African Development Bank (AfDB) is striving to connect farmers with market offtakers to enhance the processing and value addition of food and agricultural commodities. During the High-Level Conference on “Scaling Finance for Smallholder Farmers” in Nairobi, Dr. Akinwumi A. Adesina, President of the AfDB, highlighted the development and implementation of Agro-Industrial Processing Zones.
AfDB has allocated USD 934.51 million to these Special Agro-Industrial Processing Zones, complemented by an additional USD 938.27 million in co-financing from partners. Currently, 27 projects are underway across 11 countries. Despite significant progress, a critical challenge remains in the form of poor access to finance for smallholder farmers and small to medium-sized agribusinesses, with an annual financing gap of USD 75 billion identified.
Research from 35 lenders reveals a perception among commercial banks of heightened risks and diminished returns when lending to agricultural small and medium enterprises. “We must find efficient ways to ‘de-risk’ lending to farmers and small businesses,” stated Dr. Adesina, emphasizing the need to increase lenders’ willingness to finance the agricultural sector.
Moreover, the AfDB is collaborating with Mastercard and other partners to establish the MADE Alliance Africa, aiming to integrate three million farmers in Kenya, Tanzania, and Nigeria into the digital economy with an initial investment of USD 300 million. Dr. Adesina announced plans to consult the AfDB Board regarding a USD 500 million facility designed to unlock USD 10 billion in financing for smallholder farmers and agribusinesses.
This initiative will employ trade credit guarantees, blended finance, and technical assistance, focusing on reducing transaction costs associated with serving these enterprises. The AfDB remains dedicated to collaborating with the Pan African Farmers’ Organization and financial institutions to enhance access to funding for smallholder farmers.
In recognition of his contributions, Dr. Adesina was awarded Kenya’s highest honor, the Chief of the Order of the Golden Heart, by President William Samoei Ruto. Agriculture and Livestock Cabinet Secretary Mutahi Kagwe remarked that the conference serves as an important platform to center discussions on food security and agriculture around the needs of the farmer.
The African Development Bank is committed to bridging the financial gap for farmers through strategic initiatives such as the Agro-Industrial Processing Zones and the MADE Alliance Africa, aiming to enhance digital access and processing capabilities. Despite existing challenges in financing smallholder farmers, the bank’s proposed funding insights showcase a determination to expand support for agricultural enterprises and improve food security in Africa.
Original Source: www.kenyanews.go.ke
