SMEs Vital to African Agriculture – African Development Bank - SME Finance

SMEs Vital to African Agriculture – African Development Bank

A panel of some of Africa’s most promising small and medium enterprise (SME) Agripreneurs gathered online to call for more selective investment, accelerated business acquisitions and increased cooperation to help Africa feed itself and the world.

The African Development Bank (www.AfDB.org) organized the virtual session; Integrating African Food Systems through the Lens of SME Champions, as a side-event ahead of Africa’s largest agriculture conference – the African Green Revolution Forum (AGRF) – was held online for the first time, from 8-11 September.

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Webinar moderator Atsuko Toda, Bank Director for agricultural finance and rural development, said the panel members, were selected because they are using innovative solutions, tailored their business models, have a proven track record, and shown to have an impact on food systems.

“We see the importance of the roles that you play, the risks you take and the Bank wants to give you more visibility so that policymakers can understand the challenges of what you are facing and help SME Champions to grow,” Toda said.

The group of African “SME Champions” –  heads of SMEs across the continent’s food system production, processing, logistics, agricultural digitization and cold storage chain solutions sub-sectors, set the scene for webinar attendees, by describing the challenges and opportunities they face in trying to meet Africa’s food systems demands. Some said policy, programs and financing in Africa are geared toward larger organizations and businesses – and that there is still too heavy a focus on agricultural imports to Africa.

Nnaemeka Ikegwuonu, head of Nigeria-based ColdHubs, says his solar power, cold storage facility company helps farmers’ produce stay fresher, longer, reducing the need to rush the product to market at less competitive prices. ColdHubs says it invested in the storage infrastructure so that farmers could benefit from the service at a reasonable price.

“We are taking the risk out of ownership of huge cold rooms from smallholder farmers because we design, operate and maintain these cold rooms. We offer a pay-as-you-use service model,” said Ikegwounu.

In spite of agriculture being an acknowledged leading growth driver for Africa, the potential of the sector’s contribution to growth and development has been underexploited mainly due to a variety of challenges, including the widening technology divide, weak infrastructure and declining technical capacity.

These challenges have been exacerbated by weak input and output marketing systems and services, slow progress in regional integration, land access and rights issues, limited access to affordable credit, challenging governance issues in some countries, conflicts, effects of climate change, and the scourge of HIV/AIDS and other diseases. Green growth is critical to Africa because of the fragility of the continent’s natural environment. Further, Africa’s dependence on agriculture is stretching its ecological carrying capacity. Africa’s agriculture, therefore, needs a transformation to green agricultural practices that combine intensification of land productivity with environmental sustainability.

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