IFC and AGRA Develop Market-based Incentives to Raise Agricultural Productivity in Africa
Washington D.C./Nairobi, Kenya —IFC, a member of the World Bank Group, is joining forces with the Alliance for a Green Revolution in Africa (AGRA) to unlock credit and financing for small-scale farmers and agribusinesses across Sub-Saharan Africa.
“AGRA’s partnership with IFC will harness the strengths of both organizations 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.”
Agricultural lending in Africa is low, which prevents farmers from achieving their full potential production and escaping hunger and poverty.
“The challenges for Africa’s agribusiness are great and so are the opportunities,” said Lars Thunell, IFC Executive Vice President and CEO. “IFC is committed to bringing a wide range of partners together to deliver practical market-based expertise and to help Africa make the most of these opportunities. Our alliance with AGRA is a very important step in this direction.”
The partnership between IFC and AGRA will focus on developing market-based incentives and tools to increase agricultural productivity. For example, the two institutions will work together to scale up AGRA’s partnerships with investors and national commercial banks to make loans available to farmers and agribusinesses like smaller seed companies. IFC and AGRA aim to expand and finance agro-dealer networks to increase availability of farm inputs and expertise in rural areas, and support financing along the fertilizer value chain, including regional procurement of fertilizer.
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 programs develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. Since its inception, AGRA has responded to the lack of access to credit for smallholder farmers by working with financial institutions to make low-interest loans available to key operators along the value chain—agro-dealers, fertilizer wholesalers, seed companies and smallholder farmers. AGRA also makes financing available for warehouse receipt systems, farmer groups and agro-processing facilities. For more information, visit www.agra-alliance.org.
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 made a $12 million investment in the ASIF.
* Developing and funding a financing mechanism for fertilizer 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 Fertilizer Procurement Facility.
* Developing, funding and implementing an advisory services program to provide technical advice and support to farmers or businesses that will benefit from this initiative.
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