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TitleFOSTERING PRIVATE INVESTMENTS AND VALUE ADDITION IN AGRICULTURAL VALUE CHAINS: Lessons from the Africa Agriculture and Trade Investment Fund, Case Study No. 38
SubjectAgriculture and Trade
Date of Publication2016038
PublisherAfrican Community of Practice on Management for Development result at the African Capacity Building Foundation (ACBF)
Number of Pages11 pages
Geographical CoverageAfrica
KeywordsAGRICULTURAL VALUE CHAINS, The Africa Agriculture and Trade Investment Fund (AATIF), African Agriculture
AbstractThere is an increasing call for reinforcement of private investments and local value addition along agricultural value chains as a solution to unleash the potential of African Agriculture. The Africa Agriculture and Trade Investment Fund (AATIF) has, since 2011, intervened to realise this potential. Through technical and financial investments, the AATIF assist a wide range of actors such as co-operatives, outgrowers, intermediaries and financial institutions in the agricultural sector. The AATIF utilises two approaches and different instruments that include Senior debt, guarantees, risk sharing, Mezzanine and Equity. After five years of AATIF operation since 2011, increased lending to agriculture and other benefits (e.g. increased employment) have been realised. The AATIF stands out from other funds in targets (as it focuses both on smallholder farmers and small scale enterprises), the instruments (long term debt financing) and the non-financial support. The AATIF experience reveals some lessons, including the need for appropriate investment instruments, the advantage of research for efficient investments, the importance of compliance advisors, and the limits of foreign investments. These lessons and policies can inspire other investment funds and guide public institutions on the development of appropriate policies. From the AATIF case study, we recommend that in order to increase the intervention of funds in the African agricultural sector, pan African institutions like Africa Union and the African Capacity Building Foundation should create an agency with two main functions: compliance advisory for potential funds and monitoring of fund interventions as to ensure that investments are environmentally and socially sustainable.
Copyright HolderAfrican Community of Practice (AfCoP)
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Filesize856382 MB
File FormatPDF
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