Global Experts Meet at Panel Session at 2nd International Food Production Summit in Dakar to Close Agriculture Financing Gap and Address Barriers to Growing Financial Markets for Small and Medium Agricultural Enterprises (SMEs) I asked to speed up the method.

The discussion comes amid supply chain disruptions caused by the COVID-19 pandemic, the war in Ukraine, rising inflation and high commodity prices that have led to heightened food and nutrition insecurity.

Titled Closing the Funding Gap, the session was moderated by Alan Kasujja, Moderator for the BBC World Service.

At the Summit, the African Development Bank Group and the Government of Canada announced the creation of a new Special Fund to support African Small and Medium Enterprises (SMEs) in the agricultural sector.

The Catalytic Financing Mechanism for Small and Medium Enterprises in the Agriculture and Food Industry aims to facilitate investment and reduce risk in agricultural small and medium enterprises. It will also strengthen agricultural value chains and improve food security across the African continent. Experts urged lenders to consider blended finance to de-risk agricultural transactions, reduce transaction costs and attract private capital by improving risk-return trade-offs.

Wagner Albuquerque de Almeida, Global Director of Manufacturing, Agribusiness and Services at the International Finance Corporation (IFC) said, “The main challenge in this area is to understand the risks… Things need mixed finance.” .

Trade and Development Bank President Admas Tadesse said funding agriculture is not as risky as it is often assumed. “It depends on where we are in the cycle. We focus on the low-risk backend,” he said. The main source of funding for agricultural SMEs is local commercial banks. But banks prefer to invest in larger, more mature companies that dominate regional or national markets, such as established aggregators and local processors, Tadesse said.

Danladi Verheijen, co-founder and CEO of Verod Capital, an equity investment firm, emphasized that agriculture should be seen as an investment opportunity.

“Investors want to go where the returns are,” he said. He pointed out that one of the challenges in agriculture is finding a company size attractive enough for financial intermediaries to work with. Panelists also noted that Africa’s food value chains are currently not designed to maximize the potential of our food systems. , led to the search for practical solutions to restore food security on the continent.

Along the entire agribusiness value chain, there is great potential not only for establishing production and trade links, but also for establishing synergies between the various actors.

Producers, processors and exporters.

“All the elements must be in harmony. If something goes wrong, you need an ‘airbag’,” said Dr. Managing Director South and East Mediterranean at the European Bank for Reconstruction and Development. Heike Harmgard said: The speakers also urged farmers and agricultural SMEs to “regain their power” through cooperatives. We need to help bring a sense of professionalism.”

Dr. Olagunyu Ashimolowo, vice president of operations at ECOWAS Investment and Development Bank, agreed with Almeida and urged governments to identify cooperatives to manage farmers. He also urged livestock owners to channel their funds in an “attractive and bankable” way.

The African Development Bank’s Africa Adaptation Acceleration Program (AAAP) Digital Farming Annex deploys digital technologies targeted at smallholder farmers, agricultural SMEs, and value chain actors to promote the use of digital technologies in agricultural practices. build a person