Speaking at the Africa Food Systems Forum 2023, USAID Deputy Administrator Isobel Coleman noted that since 2010, Feed the Future investments have unlocked close to five billion dollars in agricultural financing, leveraged more than two and a half billion dollars private sector investment in food security, and generated more than $18 billion in sales for smallholder farmers.
Small and medium enterprises, or SMEs, are the backbone of African food systems. Together, they are the largest employer in Africa, and the key to spurring economic growth and transforming subsistence agriculture into a more productive, resilient sector, said Deputy Administrator Coleman.
“Yet fully 75 percent of African SMEs do not have access to formal bank finance. The financing gap is particularly acute for women, despite growing evidence that closing gender gaps in agriculture is a critical pathway to ending global hunger.”
It is critical to reset the incentive structure for financing agribusiness across the continent, said Deputy Administrator Coleman. The Deal Room, a U.S.-sponsored program that facilitates partnerships and investments in African agriculture, can help do that.
“It provides companies with access to finances, mentorship, and market entry solutions. It also creates opportunities for governments to present investment opportunities, create incentives, and engage with interested investors. Since 2018, over $2 billion worth of financial transactions have been negotiated among 600 enterprises and 110 investors through the Deal Room,” she said.
Origen Fresh is one example of how the Deal Room model has created opportunities for women-owned businesses. With $7 million in financing, facilitated by the Deal Room, Origen Fresh has grown to support more than 50,000 small-scale farmers, purchasing fruits and nuts to produce and export quality oils around the world.
In an effort to increase investment in small and medium-sized agricultural enterprises Deputy Administrator Coleman announced a $4 million grant for Africa’s first women in agribusiness digital marketplace, called VALUE4HER.
Agribusinesses across Africa are ready and able to absorb more financing, said Deputy Administrator Coleman:
“But others must join – as we’ve done with Feed the Future – and adapt to the changing needs of the industry; boost engagement with small and medium enterprises, including the local, formal financial sector; direct more resources to women-led organizations; and above all, listen to the voices of local actors.”
“African food systems are poised for transformation,” said Deputy Administrator Coleman, “and I look forward to seeing many more exciting achievements.”