By Favour Nnabugwu
The African Development Bank, AfDB has projected a market $1 trillion increase yearly for Africa’s food and agriculture market by 2030.
The market is presently running at $280 billion per year but in achieving this ambitious target will require significant new investments and the removal of barriers to agricultural development.
President of the AfDB, Mr. Akinwunmi Adesina disclose this in Dakar Summit that much of the new investment in raising agricultural productivity, supporting infrastructure, climate smart agricultural systems and other improvements all along the food value chain will come from the private sector.
The African Development Bank offers support to all actors in the sector, regardless of their size: small farmers, traders, producers and distributors of inputs, commercial banks and industrialists.
In addition to providing the necessary tools and know-how, the aim is to provide capital to all players in the agro-industrial value chains, enabling them to invest and develop with best practices.
In as much as the sector has its growth advantages so are obstacles to the development of it.
“The obstacles to the development of the private agro-industrial sector are both structural small size of the majority of farms, lack of infrastructure and financing and cyclical price volatility, disruption of supply chains, climate shocks”
Adesina said that a major obstacle to the development of private actors is the lack of credit financing, on the order of $27 billion to $65 billion per year, according to several studies.
“This is largely due to the perceived risk of investing in agriculture. To address this and attract private investors, the Bank is designing and deploying risk reduction tools.