The president of the African Development Bank has called on American investors to deploy more capital in the continent’s farming ventures.
“The size of the food and agriculture market in Africa will rise to $1 trillion by 2030. This is the time for US agri-businesses to invest in Africa,” said Akinwumi Adesina, who was speaking at a conference attended by US Agriculture Secretary Sonny Perdue and other officials of the Trump administration.
Adesina, who was in the US last week, said private investors should focus their efforts on what they do best at home by backing fertilizer and seed companies, manufacturers of tractors and equipment, as well irrigation and farm analytics providers.
He was hopeful that the sector would “lift hundreds of millions of people out of poverty” while making Africa’s “future millionaires and billionaires.”
Perdue, who also spoke at the conference, said his administration has pledged to cut what it sees as unnecessary red tape. “Our goal is to dismantle restrictions that have eroded agricultural business opportunities,” he said. “Agriculture feeds prosperity and accounts for 20 cents of every dollar.’’
Leveraging pension money
The thesis put forward by Adesina, which emphasized African households’ growing purchasing power and 840 million young people by 2050, sounded familiar. But the AfDB has also been involved in a number of initiatives that seek to catalyze private investments using more concrete tools.
Since October 2016, the bank has been rolling out the Africa Investment Forum, which Adesina described as a “100 percent transactional platform to leverage global pension funds and other institutional investors to invest in Africa.”
The first edition of the forum will be held on November 7-9 in Johannesburg.
A spokesman for AfDB told Agri Investor that the AIF was designed as “a meeting place for investors interested in Africa,” aiming to “showcase bankable projects, attract financing, and provide platforms for investing across multiple countries.”
Crucial to this endeavor is the possibility that AfDB will offer credit enhancement and other risk-sharing mechanisms to help attract private dollars with its partners: the International Finance Corporation, Inter-American Development Bank, European Bank for Reconstruction and Development, Asian Infrastructure Investment Bank and Islamic Development Bank.
‘$1bn tech plan’
Last year, the AfDB unveiled the Technologies for African Agricultural Transformation initiative, which aims to raise productivity by implementing technological innovations across participating countries.
“It’s the biggest consolidation of efforts to accelerate agriculture technology uptake in Africa. Technology will address the variability and the new pests and diseases that will surely arise with climate change,” Adesina said in October.
Earlier this month, President Donald Trump unveiled a proposal to use $200 billion in federal funds to spur $1.5 trillion in new infrastructure investment, including $50 billion earmarked for rural development. Part of the mooted plan are measures to speed up environmental permitting, a move seen by some as potentially weakening safeguards but welcomed by most farmers.