In a significant move to combat food insecurity and bolster agricultural investment in Africa, 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 ambitious $800 million ag finance platform. This initiative aims to establish sustainable food production and distribution systems on the continent, with a focus on alleviating hunger and poverty.
Agriculture's Crucial Role in Africa
Agriculture plays a pivotal role in Africa, contributing to approximately 20 percent of the continent's GDP and employing more than 60 percent of its population. Despite notable progress in some regions, the challenge of food insecurity persists, underscoring the need for concerted efforts. According to the mid-year update of The Global Report on Food Crises (GFRC) 2023 by the European Commission, East Africa remains particularly affected, with nearly 65 million people facing high or acute levels of food insecurity.
One contributing factor to these challenges is Africa's heavy reliance on food imports, rendering it vulnerable to external shocks. Addressing these issues requires a collaborative and sustained approach, combining short-term relief measures with long-term strategies.
Unlocking the Potential of African Agriculture
The platform's objective is to enhance food production and attract investment to Africa. As Makhtar Diop, Managing Director of IFC, emphasized, "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."
The platform will provide financing and skills training to bolster 30 agricultural value chains across Africa through 60 agri-finance operations, spanning various crop types. The framework will leverage the expertise of INNOVX, a multi-sectorial venture platform initiated by Morocco's Mohammed VI Polytechnic University (UM6P), and the knowledge base of OCP Africa, an OCP Group subsidiary dedicated to the continent. By establishing a pipeline of interventions, the platform aims to attract new investors who can actively contribute to resolving these challenges. Each fund investment will be rigorously monitored for its social, economic, and environmental impact. Additionally, the fund will conduct comprehensive studies on targeted value chains to identify challenges and necessary solutions.
Ultimately, the platform aspires to nurture African champions in agriculture and promote best practices that can be widely shared and replicated.
Unlocking Africa's Agricultural Potential
Mostafa Terrab, Chairman and CEO of OCP Group, stated, "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." He emphasized that the partnership between IFC and OCP is working towards unlocking Africa's full potential to not only feed itself but also contribute to global food security. The platform has already formed a partnership with the Bank of Africa to enhance access to fertilizers and other agricultural inputs for farmers and processors. It has also designed new projects to support cashew and rice value chains in Côte d'Ivoire, with plans to initiate additional projects in countries like Cameroon and Gabon.
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." The collaboration between IFC and OCP Group holds the promise of creating lasting positive change in Africa's agricultural landscape.