AfDB urges deeper private sector participation to de-risk agriculture financing

African Development Bank has said that the poor level of financing from the private sector is hindering agricultural transformation in Africa, calling for increased private sector participation in the sector.
This view was expressed at the African Green Revolution Forum (AGRF), held in Nairobi, Kenya, from September 5-9, 2016, which discussed how to de-risk risk agriculture financing.
Chiji Ojukwu, director for agriculture and agro-industry department at the AfDB, said that the issue of risk and lack of capacity for the private sector to offer innovative financing solutions to the agriculture sector were the main factors obstructing the growth of the sector.
“Agriculture is less than 4 percent of private-sector financing, although it contributes to 20 percent of the economy across the continent,” he said.
At a panel discussion on “Mobilising Private Sector Financing for Agriculture”, the African Development Bank (AfDB) emphasised the importance of reducing risk in financing agriculture to bridge the sector’s $30 billion funding gap and transform it.
The panel agreed on the need for the agriculture industry to transform into a high value addition sector to enable it compete with other economic sectors for financing.
In his keynote address, James Mwangi, the chief executive officer of Kenya’s Equity Bank Group, said a shift that will make the agricultural sector more adaptable was necessary, and private sector involvement is crucial to treat agriculture as a commercial enterprise.
“Agriculture is in great need of adaptability to climate change, increased productivity, scalability, financing of technology for transformation, and these offer a perfect case for private-sector financing,” he said.
Agriculture has been identified as one of the sectors that can help rescue Nigeria from recession. The UN Conference on Trade and Development (UNCTAD) recommends the adoption of a national investment policy to diversify the Nigerian economy with a strong focus on agro – allied industries.
Government programme confirms adoption of this view as a recent FSDH Research observes that a redirection of the agricultural policies is yielding results as the sector now leads the country’s economic recovery by 34.74% in 2016.

 

ISAAC ANYAOGU