By Mugambi Mutegi (email the author)
Posted Monday, January 31 2011 at 00:00
The World Bank’s private financing arm, IFC, has said it will double funding to agribusiness projects in Sub Saharan Africa to boost food security in the region.
The International Financial Corporation (IFC) director of global manufacturing, agribusiness and Services, Atul Mehta, said on Friday the organisation will increase its budget for agriculture to $250 million in the next two years from $100 million last year.
The funds will be used for new investments and advisory services to improve productivity.
Rising prices could sour taste of sweet potatoes
Mr Mehta said IFC will partner with governments, civil societies and the private sector to identify key subsectors within agriculture that have huge potential for development if appropriately funded.
“Deteriorating food security and fluctuating prices of basic goods have made agriculture a priority in African countries,” he said.
The agricultural sector accounts for a quarter of Kenya’s GDP, and any drop in productivity drags overall economic growth.
“Studies indicate there’s a need to double food production by 2015 to meet the demand of a growing population, this has focused attention on the urgency to produce more food efficiently,” said Aida der Hovannessian, the IFC Head of Agribusiness and Forestry for Africa.
Agribusiness has a broad impact on economic developmental and poverty reduction. Majority of African households’ livelihood is dependent on agriculture.
IFC’s new strategy will also focus improving access to markets for small scale farmers.
In the current financial year, IFC has budgeted $120 million financing to the Export Trading Group, which is one of Africa’s largest integrated supply chain operators.
The money is being used finance trade of agricultural commodities in several African countries, including Kenya.
The East Africa Coffee Initiative that covers Kenya, Ethiopia, Rwanda and Tanzania will benefit from the investment.
The coffee programme helps cooperatives improve the quality and yield of their coffee through improved practices as well as advancing credit to farmers.