DAR ES SALAAM, Tanzania (PAMACC News) - Despite the historical inadequacy of commercial banks in supporting agriculture across Africa, stakeholders are optimistic. This was a major talking point at the 2023 Sustainable Food Systems Forum (AGRF 2023) in Dar es Salaam.
Speaking at the event, Binta Touré Ndoye, a seasoned banker and AGRA’s Board Member, expressed concerns about the financial sector's hesitation to support agriculture. "Banks have not been able to effectively support agriculture on the continent, particularly due to many risks involved," she stated.
Yet, all is not bleak. Carolyne Gathinji, Associate Partner at McKinsey & Company Ltd, highlighted the success of blended finance and other pioneering models. Among them is the warehouse receipting system and the budding partnerships between telecommunication companies and banks benefiting smallholder farmers.
“The share of blended finance going into agriculture has more than doubled over the past five years,” remarked Gathinji. However, she added a caveat: “the big concern is the scale at which it is happening,” noting that many of these initiatives are localized, serving small communities across different African countries.
Blended finance is gaining traction as it fuses public and private sector funds to back ventures with societal or environmental agendas. Such projects often struggle to find private financiers exclusively. AGRA’s application of the blended finance model has notably aided small agri-businesses in weathering challenges, including climate change and calamities like COVID19.
In another progressive move, AGRA is acquainting numerous African farmers with the warehouse receipting system. This mechanism enhances the transparency and efficiency of agricultural commodity storage and trade.
On the ground, examples of effective agricultural financing abound. In Kenya, the Cash Transfer model, driven by UN Women, the Food and Agriculture Organization (FAO), Village Enterprise, and the County Government of West Pokot, stands out. Their initiative, named the Women Economic Empowerment through Climate Smart Agriculture (WEE-CSA), targets impoverished women, educating them on climate-resilient farming. Furthermore, these women are granted seed capital for agri-business ventures, and many have achieved financial stability and food security within just a year.
They are also educated about savings, where and after accumulating tangible amount; members are allowed to borrow twice their savings to scale up their agribusiness ventures. This has given women a new source of livelihoods because some have delved into poultry keeping while others are now keeping goats and sheep.
Gathinji believes that the key lies in scaling up such agricultural finance models across Africa, given their proven success. The momentum at AGRF 2023 suggests that a paradigm shift in African agricultural finance may well be on the horizon, but in small quantities.
Generally, agriculture can be a high-risk sector due to factors such as weather, pest infestations, and market volatility, and that is why many commercial banks may be hesitant to provide loans to farmers or agricultural businesses because of the uncertainty involved.
Addressing this challenge often requires a combination of financial innovations, policy reforms, and capacity-building efforts to make agricultural finance more accessible and sustainable for farmers and agribusinesses.
DAR ES SALAAM, Tanzania (PAMACC News) - Despite the historical inadequacy of commercial banks in supporting agriculture across Africa, stakeholders are optimistic. This was a major talking point at the 2023 Sustainable Food Systems Forum (AGRF 2023) in Dar es Salaam.
Speaking at the event, Binta Touré Ndoye, a seasoned banker and AGRA’s Board Member, expressed concerns about the financial sector's hesitation to support agriculture. "Banks have not been able to effectively support agriculture on the continent, particularly due to many risks involved," she stated.
Yet, all is not bleak. Carolyne Gathinji, Associate Partner at McKinsey & Company Ltd, highlighted the success of blended finance and other pioneering models. Among them is the warehouse receipting system and the budding partnerships between telecommunication companies and banks benefiting smallholder farmers.
“The share of blended finance going into agriculture has more than doubled over the past five years,” remarked Gathinji. However, she added a caveat: “the big concern is the scale at which it is happening,” noting that many of these initiatives are localized, serving small communities across different African countries.
Blended finance is gaining traction as it fuses public and private sector funds to back ventures with societal or environmental agendas. Such projects often struggle to find private financiers exclusively. AGRA’s application of the blended finance model has notably aided small agri-businesses in weathering challenges, including climate change and calamities like COVID19.
In another progressive move, AGRA is acquainting numerous African farmers with the warehouse receipting system. This mechanism enhances the transparency and efficiency of agricultural commodity storage and trade.
On the ground, examples of effective agricultural financing abound. In Kenya, the Cash Transfer model, driven by UN Women, the Food and Agriculture Organization (FAO), Village Enterprise, and the County Government of West Pokot, stands out. Their initiative, named the Women Economic Empowerment through Climate Smart Agriculture (WEE-CSA), targets impoverished women, educating them on climate-resilient farming. Furthermore, these women are granted seed capital for agri-business ventures, and many have achieved financial stability and food security within just a year.
They are also educated about savings, where and after accumulating tangible amount; members are allowed to borrow twice their savings to scale up their agribusiness ventures. This has given women a new source of livelihoods because some have delved into poultry keeping while others are now keeping goats and sheep.
Gathinji believes that the key lies in scaling up such agricultural finance models across Africa, given their proven success. The momentum at AGRF 2023 suggests that a paradigm shift in African agricultural finance may well be on the horizon, but in small quantities.
Generally, agriculture can be a high-risk sector due to factors such as weather, pest infestations, and market volatility, and that is why many commercial banks may be hesitant to provide loans to farmers or agricultural businesses because of the uncertainty involved.
Addressing this challenge often requires a combination of financial innovations, policy reforms, and capacity-building efforts to make agricultural finance more accessible and sustainable for farmers and agribusinesses.
DAR ES SALAAM, Tanzania (PAMACC News) - Africa's smallholder farmers have been urged to adopt technology, innovative agricultural practices, and use of kitchen gardens to ensure the affordability, availability, and accessibility of healthy diets.
Dr. Obai Khalifa, Director of Agricultural Development at the Bill & Melinda Gates Foundation (BMGF), emphasized the pressing need for farmers to incorporate, for instance, bean varieties enriched with crucial micronutrients, orange fleshed sweet potatoes rich in beta carotene, a plant-based compound that is converted to vitamin A.
“Some of the overlooked foods such as finger millet, pearl millet, sorghum, and indigenous leafy vegetables can be innovatively used to supply affordable nutritious diets, especially for rural communities,” remarked Khalifa during a side event at the Africa Food Systems Forum (AGRF) held in Dar es Salaam, Tanzania.
Prof. Joachim von Braun, a Professor at the Center for Development Research (ZEF) in Germany, highlighted the importance of recognizing what constitutes a healthy diet. He defined it as a diet that not only sustains physical health but also wards off diseases.
Echoing this sentiment, Dr. Grace Magembe, the Deputy Permanent Secretary in the Ministry of Health in Tanzania, noted that many African communities are reliant on staples due to their availability. She mentioned, “Very few individuals in rural settings can afford proteins like fish, and they mainly consume what their farms produce.” She further observed the unhealthy diet trends in urban locales such as Dar es Salaam, commenting, “If you take a stroll, you will encounter French fries everywhere, usually accompanied by deep-fried chicken and a large soda.”
Magembe championed the adoption of kitchen gardens, particularly by women, as a sustainable means to offer diverse and nutritionally rich foods for their households.
Meanwhile, in Kenya, the cultivation of biofortified beans, packed with iron and zinc, is gaining traction, especially in semi-arid regions. This initiative, spearheaded by AGRA in partnership with the Cereal Growers Association (CGA) and various County Governments, aims to combat nutritional deficiencies. The target is to supply these fortified foods to students in Kenya, and also Tanzania and Malawi, through school meal programs.
Recent studies have highlighted the nutritional challenges in Kenya, revealing a significant number of children and adults suffering from deficiencies in iron, zinc, and vitamin A. The United Nations Children's Fund (UNICEF) reports that over 25% of children, particularly those under five, experience stunted growth due to micronutrient deficiencies. UNICEF underscores the grave long-term repercussions this has, including compromised cognitive and physical development in children.
Highlighting the significance of these micronutrients, zinc is vital for a well-functioning immune system, metabolism, wound recovery, and the senses of taste and smell. Iron is crucial for the generation of new red blood cells that distribute oxygen throughout the body.
Farmers in Eastern Kenya are now producing iron and zinc-rich bean varieties like Nyota, Faida, and Angaza. These were innovatively crafted by researchers from the University of Nairobi in collaboration with the Kenya Agricultural and Livestock Research Organisation (KALRO).
In another inspiring development, Makueni County farmers are reintroducing traditional crops with a modern twist to make them more appealing, especially to the younger generation. “We've initiated baking cakes for events and brown bread using sorghum flour, which has been well-received by those who have tasted them,” shared Immaculate Ngei, a smallholder farmer from Kenya’s Makueni County.
Dr. Susan Kaaria, Director of African Women in Agricultural Research and Development (AWARD), stressed the urgency for a behavioral change, particularly among the youth, to adopt healthier dietary habits.
DAR ES SALAAM, Tanzania (PAMACC News) - A newly published report focusing on agriculture in Africa warns that without locally led climate action, communities' distress will not only be confined to hunger and malnutrition, but it will extend to economic, social, and environmental domains, with the potential to undermine the progress made over the years.
The annual Africa Agriculture Status Report (AASR 2023), titled “Empowering Africa’s Food Systems” underscores the need to address the challenges affecting African food systems considering the imminent threat posed by climate change and the potential consequences of inaction.
"These findings are not just a reflection of the current challenges but also a roadmap for future actions, guiding the continent towards food systems where every African will have access to sustainable, healthy diets," said Dr. John M. Ulimwengu, the report's lead author.
So far, food systems in Africa face a range of challenges, which vary from one region to another and can be influenced by factors such as climate, infrastructure, limited access to technology, poor soil health, governance, limited access to markets, and inflation among others.
Part of the report shows that in many parts of Africa, farmers do not have access to agricultural inputs and services, which include quality seeds, fertilizers, agricultural machinery, irrigation systems, advisory services, credit, and insurance leading to failed impact on food systems.
"Without these, farming can become less efficient and productive leading to potential failures in food systems," said Dr. John Ulimwengu, the report’s lead author.
The report further points out that promotion of sustainable farming practices through organic farming, permaculture, and other climate-smart practices that improve soil health and biodiversity is also critical for sustainable food systems in Africa.
So far, AGRA has been promoting Regenerative Agriculture (RA) farming techniques in Kenya, particularly in semi-arid parts of the country. In Tanzania, Kenya, Ethiopia, and Rwanda, AGRA is promoting the use of lime to treat soils that have become acidic and are affected by aluminum toxicity.
"This report strives to show that Innovative Finance is not just a buzzword – it is an essential tool for Africa's journey towards sustainable, resilient, and inclusive food systems. As the continent faces the dual challenges of rapid population growth and climate change, finding new financing mechanisms will be paramount in shaping a prosperous and food-secure future for all its citizens," said AGRA President, Dr. Agnes Kalibata.
Intra Africa Trade
The report also highlights the potential of digital technology innovative financing, and the African Continental Free Trade Area (AfCFTA) to significantly transform food systems in Africa.
Operational since January 2021, AfCFTA is one of the largest free trade areas in the world by the number of participating countries. The Agreement aims to create a single continental market for goods and services with free movement of persons and investments.
According to the researchers, increased market access, particularly by reducing tariffs and non-tariff barriers, the AfCFTA can easily open up new market opportunities for farmers and food businesses, enabling them to reach consumers across the continent.
Off the Track on Food Systems Countdown Initiative
Out of the 50 indicators outlined in the Food Systems Countdown Initiative (FSCI) framework, sub-Saharan African countries are performing worse than the global average in a total of 32 indicators, mostly related to diets, nutrition, and health.
However, sub-Saharan African countries are performing better than the global average in the remaining 18 indicators, including those on food systems' greenhouse gas (GHG) emissions and biosphere integrity. The above is accentuated by the fact that up to 650 million Africans—half of the continent's population—lack economic or physical access to sufficient food to meet their minimum needs every day (BCG, 2021).
The findings reiterate that empowering African food systems requires a multi-faceted approach that includes technological advancements, innovation and knowledge, digital revolution, trade, and innovative financing for a sustainable future.
"The increasing threat of climate and non-climate shocks and stressors only make the promotion of practices that build resilience and sustainability even more essential," reads part of the report.
