NAIROBI, March 22, 2025 — African Development Bank Group [AfDB] President Dr. Akinwumi Adesina has announced plans to launch a US$ 500 million facility designed to unlock US$ 10 billion in financing for smallholder farmers and small agribusiness enterprises across Africa.
Speaking at the High-Level Conference on Scaling Finance for Smallholder Farmers in Nairobi, Adesina revealed that Bank management is currently consulting with its Board of Directors on establishing this groundbreaking facility.
The facility will deploy multiple financial instruments, including trade credit guarantees, first-loss coverage, blended finance mechanisms, and origination incentives to reduce the high transaction costs of serving enterprises, complemented by technical assistance.
“We stand on the threshold of making history by pushing the boundaries of innovation and building extensive collaborative alliances to bridge the financing gap faced by smallholder farmers and agribusinesses,” said Adesina in his keynote address.
Organized in partnership with the Pan African Farmers’ Organization [PAFO], the conference sought to address Africa’s critical US$ 75bln annual financing gap for farmers and agricultural enterprises.
Adesina, who was recently awarded Kenya’s highest national honour by President William Ruto, called for global action: “Together, let us unleash the potential of agriculture in Africa. Let us make Africa the breadbasket of the world. And together, let us feed Africa with pride!”
Progress since Dakar 2 Feed Africa Summit
Adesina highlighted substantial progress since the 2023 Dakar 2 Feed Africa Summit, where 34 African heads of state committed to ensuring food security and sovereignty.
Financial commitments from development partners have surged from an initial US$30bln to US$ 72bln in less than a year, with the African Development Bank pledging US$ 10bln. The Bank has approved 77 projects valued at US$ 3.9bln to support the implementation of Country Food and Agriculture Delivery Compacts across 32 countries, with an additional US$ 1.72bln in planned approvals this year.
Key initiatives supporting smallholder farmers
The Bank has launched several major initiatives to strengthen smallholder farmers:
The Technologies for African Agricultural Transformation [TAAT] initiative has reached 25mln farmers with high-yield, climate-resilient crops, boosting Africa’s food production by 120mln tonnes.
The African Emergency Food Production Facility, a US$ 1.5bln programme, has delivered 459,000 tonnes of seed and 2.8mln tonnes of fertiliser to 12.3mln farmers, producing 37.6mln metric tonnes of food.
The Special Agro-Industrial Processing Zones initiative has invested US$ 934.51mln, with US$ 938.27mln in co-financing, supporting 27 projects in 11 countries.
The Affirmative Finance Action for Women in Africa [AFAWA] programme has approved US$ 2.52 billion in funding for 24,000 women-led businesses.
The African Fertilizer Financing Mechanism has implemented trade credit guarantees in nine countries, distributing 125,193 metric tons of fertiliser worth US$ 62.8mln to 776,971 smallholder farmers.
The Inputs Supplier Risk Sharing Program, a US$ 600mln initiative, is working to de-risk input supply chains in Uganda, Kenya, Tanzania, Ghana, and Zambia.
The Mobilising Access to the Digital Economy [MADE] Alliance Africa, in partnership with Mastercard, has seen the Bank commit US$ 300mln to integrate 3mln farmers in Kenya, Tanzania, and Nigeria into the digital economy.
Addressing persistent challenges
Currently, only 6 percent of African smallholder farmers have access to credit, and less than 20 percent use improved seeds. Financial institutions often perceive smallholder farmers as high-risk borrowers due to climate variability and lack of collateral. Bank lending to agriculture remains low, accounting for less than 5 percent of total loan portfolios in many African countries, despite the sector being a major economic driver.
“For some of you, these numbers may sound familiar; for the rest of us, they should be frustrating to hear. We must act now to change this reality,” urged Dr. Beth Dunford, Vice President for Agriculture, Human, and Social Development at the Bank, speaking at the opening session on Monday.
PAFO President Ibrahima Coulibaly urged stakeholders to take bold action: “If we want to save our continent from hunger, malnutrition, and poverty, we must create jobs in the agricultural sector. There is no other sector capable of doing this.”
Kenyan Cabinet Secretary for Agriculture and Livestock Development, Senator Mutahi Kagwe, called for urgent implementation: “If we prioritize innovative, practical measures, we will transform agriculture into a thriving business. Let’s commit to ensuring that no farmers are left behind due to lack of finance.”
On Tuesday, a panel of leading global and African financial experts also issued a resounding call to align financial structures with the needs of smallholder farmers. They underscored the crucial role of government in creating an enabling environment for financial institutions to expand agricultural lending.
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