AfDB unlocks $200m for Africa's smallholder farmers
Backing Africa’s smallholder farmers
The funds mark the first allocation from GAFSP’s Business Investment Financing Track, launched in 2024 to catalyse private investment through blended finance models combining donor, multilateral, and commercial capital.
The allocation will support the creation of an Agro-Inputs Risk Sharing Facility, a $200m fund hosted by AfDB, including $10m in de-risking capital and $4 million in grant-based technical assistance. The facility aims to increase lending to small and medium-sized agrifood companies in Ethiopia, Uganda, Tanzania, Malawi, and Zambia.
By offering guarantees to local banks, the initiative seeks to encourage credit extension to input suppliers and smallholder farmers — two groups often seen as high-risk by commercial lenders.
Bridging Africa’s agricultural finance gap
“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 Programme.
“By blending GAFSP donor funds with multilateral development and commercial finance, every Program dollar will leverage many more in private investment, multiplying the positive impact on food security and resilience to rising temperatures and unpredictable weather patterns.”
The facility will be implemented by the African Trade & Investment Development Insurance (ATIDI), a pan-African institution that provides political risk and credit insurance to investors.
Strengthening value chains and resilience
"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," said Philip Boahen, African Development Bank coordinator of the GAFSP.
“With the establishment of the Agro-inputs Risk Sharing Facility, we are planting the seeds of a more food-secure Africa.”
The initiative aligns with continental commitments such as the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration on Accelerating the Implementation of Africa’s Food Systems Transformation, both aimed at improving resilience, sustainability, and private sector participation in Africa’s food systems.