Dr. Akinwumi Adesina, President of the African Development Bank Group, has announced plans to introduce a $500 million facility aimed at unlocking $10 billion in financing for smallholder farmers and agribusiness enterprises across Africa.
Speaking at the High-Level Conference on Scaling Finance for Smallholder Farmers in Nairobi, Adesina stated that the Bank’s management is currently consulting with its Board of Directors to establish this transformative initiative.
The facility will incorporate a range of financial instruments, including trade credit guarantees, first-loss coverage, blended finance mechanisms, and origination incentives. These measures aim to lower transaction costs for serving small-scale enterprises, supplemented by technical assistance.
Dr. Adesina delivered the keynote address at the Scaling Finance for Smallholder Farmers in Africa Conference, which took place on March 17-18, 2025, in Nairobi, Kenya.
“We are on the verge of making history by pushing the limits of innovation and fostering strong collaborative partnerships to close the financing gap for smallholder farmers and agribusinesses,” Adesina stated during his keynote address.
The conference, held in collaboration with the Pan African Farmers’ Organization (PAFO), aimed to tackle Africa’s substantial $75 billion annual financing shortfall for farmers and agricultural enterprises.
Adesina, who was recently honored with Kenya’s highest national award by President William Ruto, urged global stakeholders to take action: “Together, we can unlock Africa’s agricultural potential, transform the continent into the world’s breadbasket, and feed Africa with pride.”
Adesina emphasized the significant progress made since the 2023 Dakar 2 Feed Africa Summit, where 34 African heads of state pledged to strengthen food security and sovereignty.
Financial commitments from development partners have risen sharply, increasing from an initial $30 billion to $72 billion in under a year.
The African Development Bank has contributed $10 billion and has already approved 77 projects worth $3.9 billion to support the implementation of Country Food and Agriculture Delivery Compacts across 32 nations. An additional $1.72 billion in project approvals is expected this year.
The Bank has introduced several key initiatives to enhance support for smallholder farmers:
The Technologies for African Agricultural Transformation (TAAT) initiative has provided 25 million farmers with high-yield, climate-resilient crops, increasing Africa’s food production by 120 million tons.
The African Emergency Food Production Facility, a $1.5 billion program, has supplied 459,000 tons of seed and 2.8 million tons of fertilizer to 12.3 million farmers, resulting in the production of 37.6 million metric tons of food.
The Special Agro-Industrial Processing Zones initiative has allocated $934.51 million in funding, with an additional $938.27 million in co-financing, supporting 27 projects across 11 countries.
The Affirmative Finance Action for Women in Africa (AFAWA) program has approved $2.52 billion in financing for 24,000 women-led businesses.
The African Fertilizer Financing Mechanism has introduced trade credit guarantees in nine countries, enabling the distribution of 125,193 metric tons of fertilizer worth $62.8 million to 776,971 smallholder farmers.
The Inputs Supplier Risk Sharing Program, a $600 million initiative, aims to mitigate risks in input supply chains in Uganda, Kenya, Tanzania, Ghana, and Zambia.
The Mobilizing Access to the Digital Economy (MADE) Alliance Africa, developed in collaboration with Mastercard, has received a $300 million commitment from the Bank to integrate 3 million farmers in Kenya, Tanzania, and Nigeria into the digital economy.
Currently, only 6% of African smallholder farmers have access to credit, and fewer than 20% use improved seeds.
Many financial institutions view smallholder farmers as high-risk borrowers due to climate uncertainty and lack of collateral.
As a result, agricultural lending remains low, representing less than 5% of total loan portfolios in numerous African countries, despite the sector’s vital role in economic growth.
Speaking at the opening session on March 17, 2025, Dr. Beth Dunford, Vice President for Agriculture, Human, and Social Development, emphasized the need for collective 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 urged decisive action, stating:
“To save our continent from hunger, malnutrition, and poverty, we must create jobs in agriculture. No other sector has the same potential.”
Kenyan Cabinet Secretary for Agriculture and Livestock Development, Senator Mutahi Kagwe, called for immediate implementation, asserting:
“If we prioritize innovative and practical solutions, we can transform agriculture into a thriving business. We must ensure that no farmer is left behind due to a lack of financing.”
On Tuesday, a panel of global and African financial experts stressed the importance of aligning financial structures with the needs of smallholder farmers.
They highlighted the crucial role of government in fostering an environment that enables financial institutions to expand agricultural lending.
