Nairobi, Kenya
February 17, 2009
IFC and AGRA to develop
market-based incentives and tools to increase agricultural
productivity and food security
The International Finance Corporation (IFC), a member of the
World Bank Group, joined forces with the
Alliance for a Green
Revolution in Africa (AGRA) today in Nairobi to unlock
credit and financing for small-scale farmers and agribusinesses
across sub-Saharan Africa. The amount of agricultural lending in
Africa is very low, one of the reasons hindering farmers’
ability to achieve their full potential, and escaping hunger and
poverty.
The partners’ collaboration will help expand or scale up AGRA’s
existing innovative financing projects to reach more countries
and key stakeholders in the African agricultural value chain.
AGRA and IFC both pursue practical solutions to help alleviate
poverty.
Specifically, the partnership between IFC and AGRA focuses on
developing market-based incentives and tools to increase
agricultural productivity. For example, IFC and AGRA will work
together in various ways to scale up AGRA’s partnerships with
investors and national commercial banks to make loans available
to farmers and agribusinesses like smaller seed companies,
expand and finance agro-dealer networks to increase availability
of farm inputs and expertise in rural areas, and support
‘fertiliser value chain’ financing, including regional
procurement of fertiliser.
“AGRA’s partnership with IFC will harness the strengths of both
organisations to scale up AGRA’s innovative programs across the
agricultural value chain. We will improve the livelihoods of
many more small-scale farmers and be able to do it sooner,” said
Namanga Ngongi, AGRA’s President. “The growth of the
agricultural sector will strengthen the continent’s food
security as well as create employment and raise living standards
for millions of smallholder African farmers.”
“The challenges to growing Africa’s agribusiness are great. But
so are the opportunities. IFC is committed to helping Africa
capitalise on these opportunities by playing a catalytic role of
bringing a wide range of partners together to deliver practical
market based solutions. Our alliance with AGRA is a very
important step in this direction,” said Lars Thunell, Executive
Vice President and CEO of IFC.
AGRA has responded to the lack of access to credit for farmers
and smaller agribusinesses in sub-Saharan Africa by working with
financial institutions and investors to make low-interest loans
available to key operators along the agricultural value
chain—agro-dealers, fertiliser wholesalers, and seed companies –
and to make financing available for warehouse receipt systems,
farmer groups and agro-processing facilities.
AGRA’s work to increase farm productivity and incomes
complements IFC’s support for private sector development through
mobilising private capital and providing advisory and risk
mitigation services to businesses and governments.
AGRA and IFC will work together on the following ventures:
- Providing credit
guarantees to Africa-based financial institutions in order
to leverage significant private sector financing for
agriculture.
- Expanding AGRAs
Agro-dealer Development Programme to recruit and train
significantly more agro-dealers.
- Providing financing to the
African Seed Investment Fund (ASIF), which provides
reimbursable loans to small to medium African seed
companies. AGRA has already made a $12 million investment in
the ASIF.
- Developing and funding a
financing mechanism for fertiliser wholesale companies.
- Exploring the feasibility
of establishing the West African Agribusiness Investment
Fund (WAAIF) to provide long-term commercial risk capital to
small and medium agribusinesses.
- Supporting, with financial
assistance if viable, the African Fertiliser Procurement
Facility.
- Developing, funding and
implementing an advisory services programme to provide
technical advice and support to farmers or businesses that
will benefit from this initiative.
IFC, a member of the World Bank
Group, creates opportunity for people to escape poverty and
improve their lives. We foster sustainable economic growth in
developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk
mitigation services to businesses and governments. Our new
investments totaled $16.2 billion in fiscal 2008, a 34 percent
increase over the previous year. For more information, visit
www.ifc.org.
AGRA is a dynamic partnership working across the African
continent to help millions of small-scale farmers and their
families lift themselves out of poverty and hunger. AGRA
programmes develop practical solutions to significantly boost
farm productivity and incomes for the poor while safeguarding
the environment. AGRA advocates for policies that support its
work across all key aspects of the African agricultural value
chain from seeds, soil health and water to markets and
agricultural education.
AGRA's Board of Directors is chaired by Kofi A Annan, former
Secretary-General of the United Nations. Dr Namanga Ngongi,
former Deputy Executive Director of the World Food Programme, is
AGRA's president. With support from The Rockefeller Foundation,
the Bill & Melinda Gates Foundation, the UK's Department for
International Development and other donors, AGRA works across
sub-Saharan Africa and maintains offices in Nairobi, Kenya, and
Accra, Ghana. |
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