The African Export-Import Bank (Afreximbank), Africa’s leading multilateral trade finance institution, has approved the provision of a $400m revolving global credit facility agreement to the Export Trading Group (ETG).
The agreement will enable ETG to maintain its vital role in the agri-foods supply chain, efficiently connecting African farmers to markets. It also entails an expansion in access to key inputs to boost agricultural productivity in a continent with tremendous yet unrealised potential.
According to Afreximbank estimates, Africa spent over $90bn on food imports in 2019, even though it possesses up to 60% of the world’s remaining arable land.
Moreover, the Food and Agriculture Organization (FAO) estimates that up to 50% of Africa’s agricultural production is lost every year from farm-to-market. It noted that this was due to problems ranging from sub-optimal use of inputs to improper post-harvest storage, processing and transportation facilities.
These challenges have been exacerbated by the novel coronavirus (COVID-19) pandemic, which has disrupted supply chains, heightened price volatility and could further undermine household consumption.
The Afreximbank facility will address key bottlenecks faced by African agricultural exporters, aggregating large values of produce in order to give small and medium-scale enterprises access to regional and international markets. Expanding ETG’s work in this area will reduce post-harvest losses through better access to yield-enhancing inputs and more robust networks to get output to regional and international markets.
At the same time, it will help boost the scale and productivity of African farmers to position the continent as the world’s bread basket. It will also support the vital flow of food supplies across the continent amid the disruption triggered by the pandemic.
The ETG is focused on uplifting farming communities by connecting smallholder farmers with international markets, expanding mechanisation and processing capabilities. It also focuses on increasing knowledge around quality inputs, irrigation, post-harvest techniques and yield-enhancing practices.
Kanayo Awani, Managing Director of Afreximbank’s Intra-African Trade Initiative, said, “Afreximbank remains committed to supporting African nations navigate the pandemic, and at the same time, we remain focused on boosting agricultural productivity and accelerating the diversification of exports to strengthen the resilience of African economies.”
Awani added, “This facility will not only support African farmers through the disruption caused by the pandemic but will provide added impetus to ETG’s vital work connecting the continent’s small and medium businesses to the agricultural networks and avenues critical for growth. With the African Continental Free Trade Agreement on the horizon, the timing is opportune to shape a more productive and resilient agricultural sector—delivering both prosperity and food security for the continent’s future.”