Agriculture and agribusiness accounts for 32 percent of GDP in Sub-Saharan Africa and employs 65 percent of the work force. It is likely to have a bigger impact on poverty reduction than in other sectors as it offers the most direct route of raising returns to poor people’s main assets, i.e. land and labour. The AECF’s work in the agriculture sector is the oldest and largest of its investments with a total of US$ 183 million committed across Africa. The Fund supports businesses to establish a new activity or expand existing businesses across the value chain, as long as the primary beneficiaries of the businesses are rural households living on less than US$ 2 per day.
What areas does AECF support?
Accessible Innovations for Smallholders: The Fund invests in businesses that have the potential to reach smallholder farmers to improve agricultural productivity and increase household income and food security. We work in a wide range of value chains and production systems to increase access to better quality agricultural inputs, improved seeds varieties and livestock vaccines, introduce new farming systems and agribusiness models.
Scaling Up Innovative Businesses: The Fund acts as the missing link between agricultural research and smallholder farmers by financing the commercialization of new technologies where others will not. Key investment areas include new fertilizers, vaccines, integrated pest management, disease resistant crops and soil testing.
Post Conflict and Fragile States: Post conflict and fragile states face particular challenges but the private sector is a key player in supporting the reconstruction of agribusinesses in these countries. With other sources of capital largely absent, the AECF provides critical funding which has been a key driver in the re-establishment of agricultural value chains in Zimbabwe, Mozambique, South Sudan, Somalia, Sierra Leone, Liberia and Democratic Republic of Congo (DRC).
Open data and media to increase productivity: The Fund supports low cost communication technologies and business models for information and data sharing that can reach a large audience and provide information to smallholder farmers enabling them to improve agricultural productivity and incomes.
Promoting Financial Inclusion and Mobile Finance: Improving access to finance is a priority for AECF. The Fund supports projects that use mobile money systems, create local financing mechanisms, introduce weather based insurance and establish credit systems. This improves agricultural productivity and household incomes. It also establishes non-collateral credit scoring for smallholders that enable them to access formal financial systems in the future.