2015 Grow Africa Investment Forum Event

2 - 4 June 2015. Cape Town, South Africa. Grow Africa partners convened for the annual Grow Africa Investment Forum from to feed into the 2015 World Economic Forum on Africa. 

The Grow Africa Partnership comprises over 200 companies and governments in 12 countries. These companies have made formal commitments with the government in the respective country to invest in agriculture. Ten of these countries are part of the New Alliance for Food Security and Nutrition, a partnership in which stakeholders – public and private sectors, and donors - commit to specific policy reforms and investments, outlined in Cooperation Frameworks that accelerate implementation of African country food security strategies.

“Both the public and private sectors have made strides in identifying effective models of engaging that encourage investment. African governments are developing skills, capacity and organizational structures to develop investment plans with the private sector in support of the national agricultural agenda. Public and private sector organizations have worked with donors to generate considerable innovation in financial and risk mitigation instruments. Yet progress is too incremental to enable real transformation. Much of this innovation is not reaching Africa’s small to medium-sized agribusinesses and smallholder farmers, without whom the long-term economic growth of the sector is not tenable” Arne Cartridge, Chief Executive Officer of Grow Africa

As part of the annual stock-taking of progress against investment commitments, 81 companies in 12 countries from the Grow Africa Partnership rated the importance and effectiveness of 14 aspects of the enabling environment. The results point to an urgent need for strengthening cross-sector collaboration, infrastructure and access to finance to ensure the conversion of investment potential to investment on the ground.

• Only 31% of respondents feel that their country’s enabling environment is conducive to their investment and 58% said it is “very important” that the enabling environment improves for them to successfully implement their investment commitment.
• Dissatisfaction with the quality of physical infrastructure was higher than for any other aspect of the enabling environment, with 54% of respondents saying their needs are not being met.
• The most urgent call for improvement is in access to finance. Only 25% of the companies surveyed said they could access appropriate finance for their investment, and more respondents (69%) cited the urgent need for improvement in this area over any other aspect of the enabling environment. This is also the area in which least improvement was reported. Only 14% of respondents said access to finance has improved over the last 12 months.
• Only 36% of companies feel their investment is supported by effective national policies for trade, agriculture and investment, with only 16% of respondents reporting an improvement in the situation over 2013.

The survey revealed an urgent need for cross-sector collaboration. Sixty-six per cent of respondents called for improvements in this area. Yet private-sector companies also reported the most progress in areas of the enabling environment that call for multistakeholder partnerships:

• Forty-six per cent reported an improvement in the extent to which their investment is able to benefit from their country’s priority initiatives to strengthen the agricultural sector
• Forty-six per cent percent reported improvements in their ability to operate within a well-structured and stable value chain
• Forty-one per cent percent reported improvement in their ability to find the commercial partners they need to advance their investment
• Forty per cent reported improvement in access to skilled labour

Related:

New $15 Million Lending Facility to Finance African Agricultural Enterprises - KfW, AgDevCo and Root Capital Partner to Deliver Much-Needed Capital

CAPE TOWN (June 3, 2015) — KfW, the German Development Bank on behalf of the German Ministry of Economic Cooperation and Development (BMZ), along with AgDevCo and Root Capital, today announced the launch of the Lending for African Farming Company (LAFCo). The company will finance agricultural enterprises throughout sub-Saharan Africa to enhance local food security and stimulate inclusive economic growth in the region.

Announced at the 2015 Grow Africa Investment Forum during the World Economic Forum on Africa, LAFCo aims to increase smallholder farmer productivity and incomes through better integration in local and regional agricultural value chains, and improved access to formal markets. With an anchor commitment from KfW, using funds from the German government, and additional investment by AgDevCo, which initiated the project with the support of UKAid, LAFCo will accommodate the working capital needs of agricultural enterprises. It will be managed by Root Capital and will provide lines of credit and other flexible debt products in amounts of up to $4 million, denominated in both U.S. dollars and local currencies.

Countries: Ethiopia ; Ghana ; Kenya ; Malawi ; Mozambique ; Nigeria ; Rwanda ; Tanzania ; Burkina Faso ; Cote dIvoire ; Benin ; Senegal