Strategy for agricultural transformation in africa

Total Required
Other ODA 
and Donors
AfDB (planned)
$2-3bn
Commercial 
Lending
Total Current 
Investment
$2-3bn
Total govt spending is 
~$12bn, although 70-80% is 
on current expenditure 
commitments leaving only 
$2-3bn for investments
The Bank and public sector partners will crowd in 
private and institutional funding by: 
•
Helping to establish an enabling environment for 
private investment
•
Employing innovative de-risking tools and 
blended financing
•
Proving the potential for risk-adjusted returns in 
various agriculture projects and agribusinesses

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AUM, while Africa-based or heavily Africa weighted private equity funds are estimated 
to have ~US$25-35bn AUM as at the end of 2014. Combined, sovereign, pension and 
private equity funds constitute net assets of $550-600bn. While noting that access to 
these funds are determined by the availability of the right instruments, the Bank will 
facilitate the development of innovative financing instruments that would help in 
accessing these funds. Leveraging commercial bank lending and private investment 
sources requires using innovative finance, in particular blended finance structures, to 
leverage government and donor financing to catalyze these sources; the Bank will play 
a key leadership role in developing and assisting the development of innovative 
financial instruments
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. The Bank has recently approved the creation of a new 
Department of Agricultural Finance that will be specifically dedicated to developing 
these instruments. 
4.10 
Beyond this, there are several other potential sources of finance for agricultural 
transformation;

Foreign Direct Investment into agriculture and agribusiness in Africa was worth $10bn 
in 2014. Creating the appropriate conditions for agribusiness growth, and aligning 
existing investment strategies of the private sector to the goals of transformation, 
should, as a marker of success, increase the attractiveness and flows of FDI into the 
African agribusiness sector.

The importance of ensuring the development of sustainable, resilient and climate-smart 
agriculture is closely aligned to realizing the ambitions agreed in COP 21, and 
associated climate finance commitments of mobilizing $100bn per year for investments 
in adaptation in developing countries, as well as calls for direct funding of $16bn for 
supporting Africa to adapt to climate change
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(of which $5.7bn will be funded by the 
World Bank’s International Development Association) represent an additional and 
material source of funding for key parts of agricultural transformation, especially 
sustainable intensification of commodity production, and sustainable natural resource 
management.

Other, more targeted, funds can be approached to support those components of the 
strategy failing directly in their mandates.(e.g. Africa50 Infrastructure Fund).
4.11