The African Development Bank Group (AfDB) has received $14 million from the Global Agriculture and Food Security Program (GAFSP) under its newly launched private sector financing window to enhance food security in low-income African nations.
According to a statement released on Sunday in Washington D.C., the funding will serve as de-risking capital aimed at unlocking $200 million in private sector investments across the agricultural value chain.
The initiative, known as the Business Investment Financing Track, was introduced in 2024 to combine donor grants and concessional loans with multilateral and private financing. It is designed to catalyse private investment for smallholder farmers, agribusinesses, and start-ups in developing economies.
In a statement signed by Natasha Hayward, Programme Manager for GAFSP, the fund’s first allocation will support the creation of the Agro-Inputs Risk Sharing Facility — a $200 million initiative hosted by the AfDB, backed by $10 million in de-risking capital and an additional $4 million in grants for technical assistance.
The facility will encourage local banks in Ethiopia, Uganda, Tanzania, Malawi, and Zambia to provide more credit to small and medium-sized agribusinesses through risk-sharing guarantees.
He said: “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.”
The programme is expected to support over 1.5 million smallholder farmers and 500 agro-dealers and cooperatives, improving their access to certified seeds, organic fertilisers, mechanisation, and other climate-resilient inputs.
The implementation will be handled by the African Trade & Investment Development Insurance (ATIDI), a pan-African institution that provides political and credit risk insurance for investors.
According to Dr. Philip Boahen, AfDB’s Coordinator for GAFSP, the initiative will strengthen the entire agricultural value chain from input supply to market access while helping farmers withstand economic and environmental shocks.
“With the establishment of the Agro-Inputs Risk Sharing Facility, we are planting the seeds of a more food-secure Africa,” Boahen stated.
The project aligns with continental efforts to transform food systems under the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration on Accelerating the Implementation of Africa’s Food Systems Transformation.