One year after food riots broke out in various parts of the world, four international financial institutions are joining hands to create an investment fund for African agriculture. The African Agriculture Fund (AAF) brings together the African Development Bank (ADB), the Agence Française de Développement (AFD), and the International Fund for Agricultural Development (IFAD). A fourth partner is the Kofi Annan Alliance for a Green Revolution in Africa (AGRA). The AAF will raise 200 million euros during its first phase and has a final target of 500 million euros. The Fund will target private companies and cooperatives that implement strategies to increase and diversify agricultural production in Africa.

The food crisis that broke out in 2008 highlighted considerable weaknesses in some countries, particularly those in Africa that are heavily dependent on food imports. The crisis also made the poorest even poorer, devastated household budgets and caused a sharp increase in child malnutrition. Further, the crisis exposed the extent to which agriculture is now vulnerable to climate change.

The ADB, AFD, IFAD and AGRA have launched the African Agriculture Fund in response to this food crisis. The Fund aims to support private sector companies that implement strategies to increase and diversify agricultural production in Africa by strengthening the management, modernization and organization of agricultural production on the continent. AAF will invest in agro-industrial companies and agricultural cooperatives that support small-scale farmers and respect the environment.

The Fund will initially hold 200 million euros while the figure will eventually rise to 500 million euros. Its priority interventions will be in cereals, livestock farming, dairy production, fruit and vegetables, fertilizers, seeds, oils, rural credit institutions and agricultural insurance. A facility funded by grants will finance studies and capacity building for small firms. AAF will also exercise a watch over dialogue between government authorities and professional agricultural organizations.

Agence Française de Développement (AFD) has been combating poverty and promoting development in South countries and Overseas France for over 60 years and implements the development policy defined by the French Government.
AFD is active in the field in over 50 countries and finances and supports projects to improve living conditions for populations, boost economic growth and protect the planet: getting children into school, supporting farmers and small companies, providing water supply, preserving tropical forests, combating climate change…
In 2008, AFD earmarked some 4.5 billion euros to finance operations in South countries and Overseas France. Thanks to this financing 7 million children were able to go to school, 4.4 million people gained access to water supply and 370 000 jobs were supported in the productive sector. Energy efficiency projects for the same year will save 3.3 million tons of CO2 annually.
www.afd.fr