US$13M boost set to support over 1.5M smallholder farmers across Africa

AFRICA – The Global Agriculture and Food Security Program (GAFSP) has approved the first allocation from its new private sector financing window to the African Development Bank Group.

The funding includes R246 million in de-risking capital expected to attract R3.5 billion in private sector investment to strengthen food security in low-income African countries.

GAFSP provides financial and technical support to some of the world’s poorest countries to strengthen the agriculture value chain.

The new funding aims to help more than 1.5 million smallholder farmers and 500 agro-dealers access finance and agricultural inputs across Ethiopia, Uganda, Tanzania, Malawi and Zambia.

New facility to unlock private investment

Launched in 2024, the Business Investment Financing Track combines GAFSP grants with funding from multilateral development banks. This approach seeks to draw more private investment into smallholder farming and early-stage agribusinesses.

The African Development Bank says the first allocation will support the creation of the Agro-Inputs Risk Sharing Facility, a US$201.43 million fund hosted by the Bank with US$9.50 million in de-risking capital. An additional US$3.99 million in grant funding will support technical assistance and advisory services for local banks and agricultural companies.

The Agro-Inputs Risk Sharing Facility will encourage local banks to lend to agro-input suppliers by providing risk guarantees. The facility will be managed by African Trade & Investment Development Insurance, which offers political risk and credit insurance to investors.

Closing the credit gap for farmers

Many smallholder farmers and small agribusinesses in low-income countries struggle to access loans, insurance or investment capital because banks view them as high-risk clients. This restricts their ability to expand production and meet the growing food demand across the continent.

“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, Programme Manager for the Global Agriculture and Food Security Program.

She added that “by blending GAFSP donor funds with multilateral development and commercial finance, every Programme rand will leverage many more in private investment, multiplying the positive impact on food security and resilience to rising temperatures and unpredictable weather patterns.”

Expanding access to climate-resilient inputs

According to the African Development Bank, the financing will help farmers access certified seeds, organic fertilisers, soil enhancers and mechanisation services that support climate-resilient farming. Over 1.5 million farmers and 500 agro-dealers are expected to benefit directly from the programme.

“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, and especially, 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, African Development Bank Coordinator of the GAFSP.

This initiative supports Africa’s broader commitment to transform its food systems under the Comprehensive Africa Agriculture Development Programme and the Kampala Declaration on Accelerating the Implementation of Africa’s Food Systems Transformation.

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