The African Development Bank (AfDB) has unveiled a game-changing initiative designed to empower smallholder farmers and agribusinesses across Africa. The Bank’s President, Dr. Akinwumi Adesina, announced plans for a $500 million facility aimed at unlocking $10 billion in financing to bridge the funding gap in Africa’s agricultural sector.

Speaking at the High-Level Conference on Scaling Finance for Smallholder Farmers, held in Nairobi, Kenya, on March 17-18, 2025, Adesina emphasized the Bank’s commitment to driving agricultural transformation by enhancing access to credit and financial resources.

Revolutionizing Agricultural Financing in Africa

The new facility will deploy a variety of financial mechanisms, including:
✅ Trade credit guarantees to reduce risks for lenders
✅ First-loss coverage to encourage investments in small-scale farming
✅ Blended finance strategies to leverage both public and private funding
✅ Origination incentives to lower transaction costs for banks and financial institutions

These financial tools will be complemented by technical assistance to support smallholder farmers in adopting modern agricultural techniques, improving productivity, and scaling their businesses.

Addressing Africa’s $75 Billion Agricultural Financing Gap

The conference, organized in partnership with the Pan African Farmers’ Organization (PAFO), focused on tackling Africa’s $75 billion annual shortfall in agricultural financing. Adesina highlighted how limited access to credit remains a major barrier for smallholder farmers, with only 6% currently receiving formal financing and fewer than 20% using improved seeds.

Adesina called on global stakeholders to take urgent action:

“Together, we can unlock Africa’s agricultural potential, transform the continent into the world’s breadbasket, and feed Africa with pride.”

Key Investments in Africa’s Agricultural Growth

The AfDB has already made significant strides in supporting smallholder farmers through multiple initiatives:

🌱 Technologies for African Agricultural Transformation (TAAT)
✔ Reached 25 million farmers with climate-smart, high-yield crops
✔ Increased Africa’s food production by 120 million tons

🌾 African Emergency Food Production Facility ($1.5B program)
✔ Distributed 459,000 tons of seed and 2.8 million tons of fertilizer
✔ Boosted food production by 37.6 million metric tons

🏭 Special Agro-Industrial Processing Zones
✔ $934.51 million investment, plus $938.27 million in co-financing
✔ Supporting 27 projects in 11 countries

👩🏽‍🌾 Affirmative Finance Action for Women in Africa (AFAWA)
✔ $2.52 billion in financing approved for 24,000 women-led agribusinesses

🧪 African Fertilizer Financing Mechanism
✔ Introduced trade credit guarantees in 9 countries
✔ Enabled distribution of 125,193 metric tons of fertilizer to 776,971 smallholder farmers

🌍 Inputs Supplier Risk Sharing Program ($600M initiative)
✔ Aims to de-risk agricultural input supply chains in Uganda, Kenya, Tanzania, Ghana, and Zambia

📲 Mobilizing Access to the Digital Economy (MADE) Alliance Africa
✔ AfDB has committed $300 million to integrate 3 million farmers in Kenya, Tanzania, and Nigeria into the digital economy in partnership with Mastercard

Bridging the Agricultural Finance Gap: Urgent Call to Action

Despite agriculture being a critical driver of Africa’s economy, agricultural lending remains below 5% of total loans in many African nations. This is largely due to perceived risks, climate change uncertainties, and lack of collateral among smallholder farmers.

Dr. Beth Dunford, AfDB’s Vice President for Agriculture, Human, and Social Development, stressed the need for immediate action:

“For some, these figures may be familiar; for others, they should be deeply concerning. We must act now to change this reality.”

PAFO President Ibrahima Coulibaly echoed the urgency of agricultural investment:

“To lift Africa out of hunger, malnutrition, and poverty, we must prioritize job creation in agriculture. No other sector holds the same potential.”

Kenyan Cabinet Secretary for Agriculture and Livestock Development, Senator Mutahi Kagwe, reinforced the importance of implementation:

“If we embrace innovative, practical solutions, we can transform agriculture into a thriving business. We must ensure that no farmer is left behind due to lack of financing.”

The Road Ahead

The AfDB’s commitment to unlocking $10 billion in financing marks a significant step toward sustainable agricultural development in Africa. With bold financial strategies, collaborative partnerships, and targeted investments, this initiative has the potential to redefine Africa’s food systems, empower millions of smallholder farmers, and drive economic transformation across the continent.