The African Development Bank has approved a USD$15m equity investment in Africa Food Security Fund (AFSF), in an attempt to develop the food security in Africa and improve the agri-business. This in return would provide some relief to the enterprise in Afri-business and improve the overall food security in the continent.
The funding would help prospective high-growth Small and Medium enterprise working in the Food-Agro sector. The motive is to attend the needs of the least focused organization in agriculture, like the SMEs segment that do not get the benefit of the large private equity funds. Africa Food Security Fund (AFSF) is the 2nd gen fund targeting a total capital of USD$100m.
The fund was implemented, taking into account the huge undeserved requirements of financing in Africa. The Fund’s investment policy entails the deployment of equity or quasi-equity instruments to provide expansion capital in the majority of cases with the average ticket size of USD$ 6 million to allow for follow-on investments without the need to seek additional external funding.
The fund will be invested in countries such as Senegal, Mali, and Rwanda. It has been predicted that the funds would generate jobs and benefit farmers. In addition to the fund investment, it would also provide assistant through a technical facility to investee organization. There would be around 20 direct jobs generated for each USD$1m invested, as predictable women taking at least 40% of jobs created thus, benefiting more than 14000 smallholder farmers.
The Bank’s President, Akinwumi Adesina, reiterated the need to link all efforts on this development to the Technologies for Africa Agriculture Transformation (TAAT) program for productivity enrichment at the upstream level.
The whole idea of this investment strategy is to get it fully aligned along with the Bank’s Ten-year strategy. The present prospective pipeline organization is aligned with Banks high 5’s objective – Feed Africa, Industrialize Africa, Integrate Africa and Improve the quality of life of Africans.