$14m GAFSP Support to AfDB Set to Unlock $200m Private Investment for Africa’s Food Security

 

The Global Agriculture and Food Security Program (GAFSP) has approved the first financing under its new private sector window, directing $14 million to the African Development Bank (AfDB) to help unlock up to $200 million in private investment for agricultural development in low-income African countries.

The funding will support the establishment of a $200 million Agro-Inputs Risk Sharing Facility, aimed at encouraging local banks to lend to small agribusinesses, agro-input dealers, cooperatives, and farmer groups across Ethiopia, Uganda, Tanzania, Malawi and Zambia.

GAFSP provides grants, concessional financing, and technical support to some of the world’s poorest countries. Its new Business Investment Financing Track, launched in 2024, blends donor funding with multilateral development bank resources to attract commercial capital into agriculture—traditionally seen as a high-risk sector.

Addressing a Financing Gap in African Agriculture

Smallholder farmers and early-stage agribusinesses form the backbone of Africa’s food systems, yet they struggle to obtain credit due to perceived risk, lack of collateral, and vulnerability to weather shocks. This financing gap limits their ability to expand production, access new markets, or adopt climate-resilient technologies.

The Agro-Inputs Risk Sharing Facility is designed to change that. By providing guarantees to financial institutions through the African Trade & Investment Development Insurance agency, the initiative will reduce lending risks and make it easier for banks to extend credit to agro-input suppliers.

“This first allocation demonstrates the appetite for funders to work together in this new model to solve an age-old challenge of finance for smallholder farmers: risk,” said Natasha Hayward, Program Manager for GAFSP.
“By blending GAFSP donor funds with multilateral development and commercial finance, every Program dollar will leverage many more in private investment.”

Growing Food Security and Climate Resilience

The facility will help expand access to certified seeds, organic fertilizers, mechanisation services, soil enhancers, and other essential agricultural inputs. The aim is to strengthen food production in regions where climate change is worsening drought, heat stress, and unpredictable rainfall.

More than 1.5 million smallholder farmers and 500 agro-dealers and cooperatives are expected to benefit.

“By targeting agro-input dealers and smallholder farmers, this facility intends to strengthen the entire value chain, from input supply to market access,” said Philip Boahen, AfDB Coordinator for GAFSP.
“With this initiative, we are planting the seeds of a more food-secure Africa.”

Supporting Continental Food System Transformation

This investment aligns with key African commitments, including:

• The Comprehensive Africa Agriculture Development Programme

• The Kampala Declaration on Food Systems Transformation

Both frameworks emphasize boosting local production, reducing fertilizer and seed import dependency, and equipping farmers to respond to climate-driven food security challenges.