US$100mn to help African farmers access global markets
The African development bank (AfDB) and Export Trading Group (ETG) have signed a seven-year US$100mn non-sovereign guaranteed corporate loan to finance agricultural projects across Africa.
ETG is an agricultural supply chain manager specialising in African commodities. Proceeds from the loan will go towards the company’s five-year Agricultural Investment Programme, which consists of a range of projects to support agricultural production, storage, transport, processing and logistics in 14 countries in Africa.
Speaking to GTR, the company’s global head of treasury Anish Jain says the aim of the programme is to “build a bridge between smallholder farmers and international supply chains, as well as promoting intra-African trade”.
“What we have seen in the agricultural sector in Africa, in a lot of countries farmers are not able to access the global commodity market, and because of that, a lot their production goes to waste. So our programme is aimed towards building sustainable agricultural practices across Africa,” he says.
The loan comes as Africa faces a significant food security challenge, while being highly dependent on food imports. The AfDB predicts that the continent’s spend on food import will rise to US$100bn by 2025, up from US$35bn in 2015.
Most of ETG’s projects will be focused around building warehouses and processing facilities, as well as supplying fertilisers to local farmers.
“The warehousing complexes will be regional and central warehouses, where farmers can come and sell their commodities, and we can store those commodities in its raw format. The processing facilities are factories where we can process these commodities to make them tradable across international markets,” Jain explains.
By collaborating with local counterparts on the construction of the various projects, it is also hoped that the programme will give a boost to local employment.
In a statement, the AfDB says the programme is strongly aligned with is core priorities. “It will significantly contribute not only in improving food production in Africa but most importantly in value addition and the wide distribution of food across the continent using the sponsor’s broad distribution networks,” it says.take me back