USAID Administrator Samantha Power and Anne Beathe Tvinnereim, the Norwegian Minister of International Development, have jointly introduced a groundbreaking multi-donor fund. This initiative targets the provision of essential financial support to small-and medium-sized agricultural businesses (agri-SMEs) across Africa.
This ambitious project, backed by the United States Congress, will see USAID contribute an initial sum of $35 million, matched dollar-for-dollar by Norway, culminating in a joint contribution of $70 million. With the concerted efforts of other potential donors, both countries aim to boost this fund to a staggering $200 million. The intention behind such a vast amount is to further inspire commercial financing avenues by minimizing the inherent risks associated with investments.
Upon full realization, the fund is set to offer a lifeline to approximately 500 agri-SMEs, directly impacting 1.5 million smallholder farmers and indirectly benefiting nearly 7.5 million individuals. This financial injection will also pave the way for almost 60,000 new jobs within the private sector.
This announcement came during a high-profile event attended by U.S. Secretary of Treasury Janet Yellen, Kenyan President William Ruto, African Development Bank President Akinwumi Adesina, U.S. International Development Finance Corporation CEO Scott Nathan, and Acumen CEO Jacqueline Novogratz, along with the aforementioned officials.
Africa, a continent where the specter of hunger looms large, is the primary focus of this fund. The vast potential to alleviate poverty and hunger via strategic agricultural investment is palpable. Acting as the backbone of Africa’s economy, agri-SMEs play a pivotal role in metamorphosing subsistence farming into a commercially viable sector capable of addressing the continent’s food demands. Despite being instrumental in supporting 95% of smallholder farmers in sub-Saharan Africa, a staggering three-fourths of agri-SMEs face challenges in accessing formal bank credits. This has resulted in an alarming $100 billion deficit in the financing sector.
USAID, spearheading the U.S. government’s ‘Feed the Future’ initiative, envisions this fund as a stepping stone towards countering food insecurity through fostering private sector partnerships. By facilitating better financial access for agri-SMEs, the aim is to tackle multiple challenges simultaneously – from hunger and poverty to climate change and gender disparity, thus forging a pathway for a prosperous and resilient future