In a move to strengthen Africa’s agricultural sector, Afreximbank, the African Continental Free Trade Area (AfCFTA) Secretariat, and the World Food Programme (WFP) have signed a three-year Memorandum of Understanding (MoU) to support African farmers, agro-processors, and commodity traders with a minimum of $2 billion in financing by 2025.
Benedict Oramah, president/chairman of the Afreximbank board, announced this during the Farm, Food and Allied Technologies (FARMATECH) Expo 2024 in Abuja.
According to him, the initiative aligns with AfCFTA’s objectives to bolster intra-regional trade and enhance food security across the continent.
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“On July 17, 2022, Afreximbank, the African Continental Free Trade Area Secretariat and World Food Programme signed a 3-year tripartite Memorandum of Understanding to disburse a minimum of US$2 billion in farming loans as well as credit lines to agro-processors and commodity traders by 2025 through various lending instruments and blended finance facilities to be channelled through the bank in support of the implementation of the AfCFTA Agreement (increase in intra-regional agricultural trade),”
The bank’s president, who was represented by Eric Monchu Intong, the acting group managing director of client relations, emphasised the crucial role agriculture plays in economic development, food sovereignty, and sustainable livelihoods in Africa
He explained that the collaboration under the MOU focuses on building the productive capacity of smallholder and commercial farmers, supporting the development of agro-processing and agro-export industries, availing climate change actions, and promoting intra-regional agricultural trade and investments.
“Agricultural financing is essential for enabling farmers and agribusinesses to secure the capital necessary for investments in technology, infrastructure, and sustainable practices.
According to the Food and Agriculture Organisation (FAO), global agricultural investments must be significantly increased to address the rising food demand. Currently, the trade finance gap in developing countries is estimated to be approximately $150 billion annually. This gap not only poses a challenge but also represents an opportunity for Development Financial Institutions, such as Afreximbank, to implement tailored and bespoke financial solutions,”
Speaking further, Oramah added that the MoU would channel funds through diverse lending instruments and blended finance solutions managed by Afreximbank, targeting smallholder and commercial farmers as well as agro-processing industries.
These funds aim to address several core challenges, including inadequate infrastructure, limited financial literacy, and high-risk perceptions associated with agricultural financing. Afreximbank’s sixth strategic plan underscores industrialization and export development, with a focus on supporting local manufacturing, value-added exports, and reducing Africa’s reliance on unprocessed commodity exports.
Highlighting Africa’s potential as a global agricultural powerhouse, he noted that the continent possesses over 60 percent of the world’s arable land. Yet, Africa’s agricultural sector only contributes 15 percent to its GDP while employing 60 percent of the workforce.
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According to him, Afreximbank aims to expand this impact by promoting mechanization, value addition, and educational reforms to empower the next generation with advanced agricultural skills.
Through tailored interventions, he said that Afreximbank also offers solutions like long-term financing, risk insurance via its AfrexInsure subsidiary, and financing for agribusiness projects. Notable examples include a EUR 100 million sugar processing initiative in Egypt, a EUR 19.6 million dairy processing plant in Mauritania, and a $20.8 million cashew processing facility in Nigeria.
Oramah, therefore, called for closer collaboration between African stakeholders to advance innovative solutions and policy frameworks. By scaling up agricultural financing and enhancing value chains, he noted that Afreximbank and its partners aim to unlock Africa’s vast agricultural potential and reduce dependence on food imports.
Emeka Obegolu, president of the Abuja Chamber of Commerce and Industry (ACCI), speaking at the expo, said that agriculture was the heartbeat of the nation, providing livelihoods to millions, sustaining communities, and bolstering the economy.
He, however, noted that the sector faces a host of challenges, from climate change to financing, and fluctuating markets to the urgent need for modern infrastructure and technology. According to him, to sustain agriculture’s vital role, stakeholders must innovate, collaborate, and adapt.
Obegolu, called on all stakeholders to foster connections, facilitate engagement, and build robust communities.
“I urge all participants to take advantage of the numerous opportunities offered here at FARMFATECH. Connect with exhibitors and leverage the innovative products and services presented to bolster your ventures. Together, through collaboration and commitment, we can contribute meaningfully to a more prosperous Nigeria.”
“This Expo offers everyone from farmers and manufacturers to investors and agricultural technology enthusiasts a chance to witness and engage with transformative tools and techniques that are reshaping food production and management.”
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