AfDB Secures $14 Million from GAFSP’s Private Sector Financing Window to Boost African Food Security
The African Development Bank Group (AfDB) has received $14 million in the first allocation from the Global Agriculture and Food Security Program (GAFSP)’s new private sector financing window. This initial de-risking capital is expected to unlock up to $200 million in private sector investment, targeting enhanced food security across low-income African countries.
A New Era of Private Sector Engagement in Agriculture
Launched in 2024, GAFSP’s Business Investment Financing Track blends donor grants, concessional finance, and multilateral development bank financing to catalyze private sector investments in smallholder farmers, producer groups, agribusinesses, and startups.
The first allocation under this track will establish an Agro-Inputs Risk Sharing Facility, a $200 million fund hosted by AfDB. The facility will provide $10 million in de-risking capital, complemented by $4 million in technical assistance grants, to encourage commercial banks to lend to small- and medium-sized agricultural enterprises in Ethiopia, Uganda, Tanzania, Malawi, and Zambia.
Bridging the Financing Gap for Smallholder Farmers
Smallholder farmers and early-stage agrifood businesses often face limited access to credit, insurance, and investment capital due to perceived high risks, which hinders their ability to meet rising food demand.
Implemented by the African Trade & Investment Development Insurance (ATIDI)—a pan-African institution offering political risk and credit insurance—the facility will provide guarantees to financial institutions, sharing the risk and incentivizing commercial banks to extend loans to underserved agribusinesses.
“This first allocation demonstrates a growing appetite for innovative models that solve a long-standing challenge: financing smallholder farmers,” said Natasha Hayward, GAFSP Program Manager. “By blending donor funds with development and commercial finance, each program dollar can leverage many more in private investment, magnifying the impact on food security and resilience to climate extremes.”
Strengthening Africa’s Agricultural Value Chain
The facility will enhance access to certified seeds, organic fertilizers, soil enhancers, mechanization, and other critical inputs, enabling agribusinesses to withstand extreme heat, water scarcity, and other climate-related shocks.
More than 1.5 million smallholder farmers and 500 agro-dealers and cooperatives are expected to benefit.
“By supporting agro-input dealers and smallholder farmers, this facility strengthens the entire value chain—from input supply to market access—building resilient food systems capable of withstanding environmental and market shocks,” said Philip Boahen, AfDB Coordinator for GAFSP. “With the Agro-Inputs Risk Sharing Facility, we are planting the seeds for a more food-secure Africa.”
This debut allocation aligns with Africa’s broader commitments to transform food systems, including the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration on accelerating the continent’s food systems transformation.
