Africa’s agricultural transformation may require a different kind of investor: institutions capable of providing patient, long-term capital rather than short-term agricultural lending.

That question is gaining relevance as Zimbabwe’s agricultural sector highlights the financing gap affecting irrigation, mechanisation, horticulture and storage.

A report published on October 4 noted that Zimbabwe’s agricultural sector requires billions of dollars in long-term financing, while much of the capital currently available remains short-term. The mismatch was highlighted at the 7th ZAPF Principal Officers and Chairmen’s Convention in Bulawayo.

Tawanda Mazorodze of Akribos Wealth Managers argued that pension funds could potentially provide the patient capital agriculture requires if appropriate investment products are developed.

Zimbabwe’s pension funds held about $3.41 billion in assets in March, according to figures cited at the convention. However, a substantial proportion of those assets is concentrated in property, illustrating the limited range of investment opportunities available to pension funds.

The issue is relevant well beyond Zimbabwe.

Agriculture has a naturally long investment cycle. Irrigation systems can take years to generate their full economic value. Mechanisation requires substantial upfront capital, while storage facilities and processing infrastructure depend on sufficient production volumes and reliable market connections.

Short-term loans are useful for seasonal activities such as buying seed and fertiliser, but they are poorly suited to financing infrastructure that generates returns over five, 10 or even 20 years.

This creates a potential role for pension funds, insurance companies, sovereign funds and other institutional investors.

However, attracting institutional capital into agriculture will require more than simply making the sector eligible for investment. Projects need predictable cash flows, credible operators, transparent governance, appropriate risk-sharing structures and mechanisms that can protect long-term investors against excessive agricultural volatility.

Blended finance could help bridge that gap. Development finance institutions and governments could absorb part of the early-stage risk, while institutional investors provide larger pools of long-term capital once projects become sufficiently bankable.

The opportunity is particularly significant for infrastructure that benefits entire agricultural value chains.

A regional irrigation scheme, cold-storage network, warehouse system or agro-processing facility can potentially generate revenue while also improving productivity for thousands of farmers.

Africa’s agricultural transformation therefore needs to move beyond the question of how farmers obtain seasonal credit. The bigger question is how the continent can mobilise the long-term capital required to build the infrastructure that makes commercial agriculture more productive.

Pension funds could become part of that solution, but unlocking their potential will depend on creating investment structures that convert agricultural opportunities into transparent, measurable and investable assets.