African Development Bank Initiatives to Enhance Farmers’ Market Access and Financing

The African Development Bank aims to improve market access and financing for farmers through Agro-Industrial Processing Zones, committing significant funds to enhance agricultural value addition. Initiatives include partnership with Mastercard for digital integration and plans for a new financing facility. Despite challenges, the bank emphasizes the essential need for innovative lending solutions.

The African Development Bank (AfDB) is actively working to connect farmers to market off takers, enhancing food processing and value addition in agricultural commodities. Dr. Akinwumi A. Adesina, President of the AfDB, emphasized the bank’s commitment to developing Agro-Industrial Processing Zones during a recent conference in Nairobi focused on financing smallholder farmers. The AfDB has allocated USD 934.51 million toward these zones, matching funds with partners contributing USD 938.27 million.

Currently, AfDB supports 27 ongoing Special Agro-Industrial Processing Zones projects across 11 countries. Despite significant advancements, challenges persist, particularly regarding access to finance for smallholder farmers and agribusinesses. There exists an annual financing gap of USD 75 billion for these entities, compounded by commercial banks’ perceptions of higher risks associated with agricultural lending.

Dr. Adesina highlighted the necessity for innovative solutions to minimize lending risks, thus increasing banks’ willingness to finance the agricultural sector. He mentioned the AfDB’s collaboration with Mastercard on the MADE Alliance Africa initiative, designed to integrate three million farmers from Kenya, Tanzania, and Nigeria into the digital economy with an initial commitment of USD 300 million.

Additionally, Dr. Adesina revealed plans to consult the AfDB Board for establishing a USD 500 million facility aimed at unlocking USD 10 billion in financing for smallholder farmers and agribusinesses, utilizing trade credit guarantees and blended finance solutions.

The AfDB remains dedicated to partnerships with the Pan African Farmers’ Organization and other stakeholders to enhance financing opportunities. During the conference, President William Samoei Ruto awarded Dr. Adesina the Chief of the Order of the Golden Heart, recognizing his significant contributions to agriculture.

Agriculture and Livestock Cabinet Secretary Mutahi Kagwe remarked on the conference’s aim to put farmers at the center of discussions about food security and practical outcomes for the agricultural sector.

The African Development Bank is endeavoring to enhance agricultural productivity and financing for smallholder farmers through the development of Agro-Industrial Processing Zones and strategic partnerships. Despite existing challenges such as financing gaps and perceived risks associated with agricultural lending, the AfDB is committed to innovative solutions and collaborations to improve access to finance for agricultural stakeholders. Moreover, recognition of leadership in the field, as evidenced by the award conferred upon Dr. Adesina, further emphasizes the importance of these initiatives.

Original Source: www.kenyanews.go.ke