The Global Agriculture and Food Security Program (GAFSP) has announced a $14 million allocation to the African Development Bank Group (AfDB) to unlock $200 million in private-sector financing to improve food security in low-income African countries.
The funding is the first disbursement from GAFSP’s new private-sector financing window, the Business Investment Financing Track, launched in 2024.
The window blends grants and concessional finance with multilateral bank resources to boost private investment in smallholder farming, producer groups, and agribusinesses.
The initial allocation will establish the Agro-Inputs Risk Sharing Facility, a $200 million fund hosted by AfDB.
The facility will include a $10 million tranche of de-risking capital and an additional $4 million in grant funding for technical assistance.
It encourages local banks to extend credit to small and medium-sized agricultural companies in Ethiopia, Uganda, Tanzania, Malawi, and Zambia.
Smallholder farmers and early-stage agrifood businesses across Africa often struggle to access credit, insurance, and investment capital due to high perceived risks.
The new facility will address this financing gap by providing guarantees to banks through the African Trade & Investment Development Insurance (ATIDI), a pan-African insurer offering political and credit risk coverage.
“This first allocation demonstrates the appetite for funders to work together in this new model to solve an age-old challenge of finance for smallholder farmers: risk,” said Natasha Hayward, Program Manager for the Global Agriculture and Food Security Program.
“By blending GAFSP donor funds with multilateral development and commercial finance, every Program dollar will leverage many more in private investment, multiplying the positive impact on food security and resilience to rising temperatures and unpredictable weather patterns,” she added.
The fund will help expand access to certified seeds, organic fertilisers, soil enhancers, mechanisation, and other key agricultural inputs, enabling farmers to cope with heatwaves, droughts, and other climate shocks.
More than 1.5 million smallholder farmers, 500 agro-dealers and cooperatives are expected to benefit from the initiative.
“By targeting agro-input dealers and smallholder farmers, this facility intends to strengthen the entire value chain, from input supply to market access, building food systems able to withstand market shocks, including environmental pressures.
With the establishment of the Agro-Inputs Risk Sharing Facility, we are planting the seeds of a more food-secure Africa,” said Philip Boahen, AfDB’s Coordinator of the GAFSP.
The initiative supports Africa’s broader drive to transform its food systems under the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration on Accelerating the Implementation of Africa’s Food Systems Transformation.
