October 13, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

The International Finance Corporation (IFC), a member of the World Bank Group, and OCP Group, the world’s largest producer of phosphate-based fertilizer, are launching an $800 million ag finance platform to build sustainable food production and distribution systems in Africa. 

Agriculture accounts for approximately 20 percent of Africa’s GDP and more than 60 percent of its employment, showing just how vital it is to the continent and its people. And, while progress has undeniably been made in some regions, the challenges of hunger and food insecurity in Africa remain. For instance, the mid-year update to The Global Report on Food Crises (GFRC) 2023, issued by the European Commission, stated that between 2022 and August 2023, Sri Lanka and Niger showed the greatest reduction in food insecurity with 2.4 million and 1.1 million people experiencing improved conditions, respectively. However, East Africa remains the hardest-hit region with almost 65 million people living with either high-or-acute levels of food insecurity, representing an increase of 8 million people since last year, largely due to ongoing conflicts in Sudan, which have displaced 3.5 million people since April 2023.

Part of the reason that these issues exist is due to the fact that Africa imports a large proportion of its food, making it less resilient to external shocks. 

Addressing these issues requires collaboration, sustained effort, and a focus on both short-term relief and the long-term strategies that address these pressing and complex challenges for millions of people across the continent.

The opportunity to reduce hunger and poverty in Africa through agricultural investment is enormous, and is key to transforming a widely subsistence agriculture sector into a commercially sustainable industry. But to realize these opportunities fully, it is essential that agricultural investment in Africa is well-targeted, sustainable, and inclusive.

“Agriculture is a critical sector for Africa, and we are thrilled to scale up our partnership with OCP to improve food production and attract investment to the continent,” said Makhtar Diop, managing director, IFC. 

This platform aims to provide financing and skills training to strengthen 30 agricultural value chains across Africa through 60 agri-finance operations covering a range of crop types. The framework for these goals will leverage the expertise of INNOVX, a multi-sectorial venture platform launched by Morocco’s Mohammed VI Polytechnic University (UM6P), and the well of knowledge found in OCP Africa, an OCP Group subsidiary dedicated to the continent. 

By building a pipeline of interventions, the partners explained that the platform aims to attract new investors who will participate either directly or indirectly in being the solution.

Each investment made by the fund will be monitored for its impact against social, economic, and environmental measures, and the fund will undertake in-depth studies on targeted value chains to identify the challenges being faced and the solutions needed to address them.

Ultimately, the fund intends to foster the emergence of African champions, and to enable best practices that can be shared so that success can be replicated exponentially. 

“Today we take a major step towards a just African agricultural transformation by mobilizing substantial new financing for African farmers and for the value chains that support them,” said Mostafa Terrab, chairman and CEO, OCP Group. “The partnership between IFC and OCP is working to unlock the full potential of Africa to feed not only itself, but the world.”

The platform has already established a partnership with Bank of Africa to improve access to fertilizers and other inputs for farmers and processors; has designed new projects in support of cashew and rice value chains in  Côte d’Ivoire; and has begun designing new projects in Cameroon, Gabon, and other countries. 

Diop concluded, “Both IFC and OCP Group will commit resources to grow the platform and we are keen to attract like-minded partners and potential investors to join us in this important and timely project.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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