IFC, AGRA sign new deal to boost agricultural growth in Africa

The organizations said the 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. "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," Namanga Ngongi, AGRA's President told journalists in Nairobi. "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." Ngongi said 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 partnership between IFC and AGRA specifically focuses on developing market-based incentives and tools to increase agricultural productivity. For example, IFC and AGRA said they 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 'fertilizer value chain' financing, including regional procurement of fertilizer. "The challenges to growing Africa's agribusiness are great. But so are the opportunities," said Lars Thunell, Executive VP and CEO of IFC. "IFC is committed to helping Africa capitalize 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," Thunell said. 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, fertilizer 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 mobilizing private capital and providing advisory and risk mitigation services to businesses and governments. According to deal, the two will provide credit guarantees to Africa-based financial institutions in order to leverage significant private sector financing for agriculture; Kazinform cites Xinhua. They will also expand AGRAs Agro-dealer Development Program to recruit and train significantly more agro-dealers. Tnunnel said the two organizations will also provide financing to the African Seed Investment Fund (ASIF), which provides reimbursable loans to small to medium African seed companies. AGRA has already made 12 million U.S. dollars investment in the ASIF. They will also develop and fund a financing mechanism for fertilizer wholesale companies and explore the feasibility of establishing the West African Agribusiness Investment Fund (WAAIF) to provide long-term commercial risk capital to small and medium agribusinesses.