- AfDB Approves $15m Investment in Food Security
The Board of the African Development Bank has approved equity investment of $15m in the Africa Food Security Fund, which supports Small and Medium Enterprises involved in agri-business in order to enhance food security across the continent.
The AFSF is a second-generation fund targeting a total capitalisation of $100m. The fund will invest in potential high-growth SME operating in the food and agriculture value chains across sub-Saharan Africa.
It aims to address the needs of least- served operators in agricultural SMEs segment that are not targets of the larger private equity funds and commercial banks.
A statement made available to our correspondent in Abuja on Wednesday said the fund Manager, Zebu Investment Partners, was experienced in food production and processing at the SME level.
Considering the largely underserved needs of agricultural financing in Africa, the fund’s investment policy entails deployment of equity or quasi-equity instruments to provide expansion capital in the majority of cases with average ticket size of $6m to allow for follow-on investments without the need to seek additional external funding.
It is envisaged that the fund will create at least 20 direct jobs for each $1m invested, benefit over 14,000 smallholder farmers, with women taking at least 40 per cent of jobs created, the bank said.
In addition to its investments, the fund will provide post-investment support through a technical assistance facility to investee companies.
In his closing remarks at the Board session, the President, AfDB, Dr. Akinwumi Adesina, said there was a need to link all efforts on the project to the technologies for Africa Agriculture Transformation programme for productivity enhancement at the upstream level.
According to the AfDB, the fund’s investment strategy was fully aligned with the bank’s 10-year strategy (2013-2022), as well as the Regional Integration Policy and Strategy (2013-2024), especially on its inclusive activities.
The bank added that the current potential pipeline companies were aligned to the objectives of its High 5s – feed Africa (through investments in food, beverage and agro processing companies); industrialise Africa (through investments in processing companies); integrate Africa (through investments in businesses that cater to regional economies); and improve the quality of life of Africans (through provision of a technical assistance facility).