IFC, AGRA sign new deal to boost agricultural growth in Africa

NAIROBI, Feb. 13 (Xinhua) -- The International Finance Corporation (IFC) on
Friday signed a partnership deal with the Alliance for a Green Revolution in
Africa (AGRA) in Nairobi to unlock credit and financing for small-scale farmers
and agribusinesses across sub-Saharan Africa.

The organizations said the collaboration will help expand or scale up
AGRA's existing innovative financing projects to reach more countries and key
stakeholders in the African agricultural value chain. AGRA and IFC both pursue
practical solutions to help alleviate poverty.

"AGRA's partnership with IFC will harness the strengths of both
organizations to scale up AGRA's innovative programs across the agricultural
value chain. We will improve the livelihoods of many more small-scale farmers
and be able to do it sooner," Namanga Ngongi, AGRA's President told journalists
in Nairobi.

"The growth of the agricultural sector will strengthen the continent's food
security as well as create employment and raise living standards for millions of
smallholder African farmers."

Ngongi said the amount of agricultural lending in Africa is very low, one
of the reasons hindering farmers' ability to achieve their full potential, and
escaping hunger and poverty.

The partnership between IFC and AGRA specifically focuses on developing
market-based incentives and tools to increase agricultural productivity.

For example, IFC and AGRA said they will work together in various ways to
scale up AGRA's partnerships with investors and national commercial banks to
make loans available to farmers and agribusinesses like smaller seed companies,
expand and finance agro-dealer networks to increase availability of farm inputs
and expertise in rural areas, and support 'fertilizer value chain' financing,
including regional procurement of fertilizer.

"The challenges to growing Africa's agribusiness are great. But so are the
opportunities," said Lars Thunell, Executive VP and CEO of IFC.

"IFC is committed to helping Africa capitalize on these opportunities by
playing a catalytic role of bringing a wide range of partners together to
deliver practical market based solutions. Our alliance with AGRA is a very
important step in this direction," Thunell said.

AGRA has responded to the lack of access to credit for farmers and smaller
agribusinesses in sub-Saharan Africa by working with financial institutions and
investors to make low-interest loans available to key operators along the
agricultural value chain -- agro-dealers, fertilizer wholesalers, and seed
companies -- and to make financing available for warehouse receipt systems,
farmer groups and agro-processing facilities.

AGRA's work to increase farm productivity and incomes complements IFC's
support for private sector development through mobilizing private capital and
providing advisory and risk mitigation services to businesses and governments.

According to deal, the two will provide credit guarantees to Africa-based
financial institutions in order to leverage significant private sector financing
for agriculture.

They will also expand AGRAs Agro-dealer Development Program to recruit and
train significantly more agro-dealers.

Tnunnel said the two organizations will also provide financing to the
African Seed Investment Fund (ASIF), which provides reimbursable loans to small
to medium African seed companies. AGRA has already made 12 million U.S. dollars
investment in the ASIF.

They will also develop and fund a financing mechanism for fertilizer
wholesale companies and explore the feasibility of establishing the West African
Agribusiness Investment Fund (WAAIF) to provide long-term commercial risk
capital to small and medium agribusinesses.