Stories tagged: AECF

Wall Street Journal Features Four Farming First Spokespeople

Four Farming First spokespeople feature in a Wall Street Journal article published today that looks at private sector investment in African agriculture.

The article, ‘Private Sector Interest Grows in African Farming’ looks at how fears about another global food crisis are leading private companies to tap into the huge potential of the farm sector in Africa. Sub-Saharan Africa is estimated to hold up to 60% of the world’s uncultivated land suitable for farming.

Reflecting on this current wave of investment, Lucy Muchoki, head of PanAAC, said, “People are realizing the potential of agriculture.”

Sindiso Ngwenya, chairperson of COMESA and chairman of FANRPAN, spoke about the failure of previous African agricultural projects initiated by foreign investors, that did not properly address the barriers to the sector’s development, saying,“You end up with an enclave economy, prosperous on cheap labor in the countryside without integrating the locals, and this can lead to future conflicts.”

Hugh Scott, director of the Africa Enterprise Challenge Fund, said that private sector investors have the power to empower local farmers to boost output and ensure sustainable markets. Speaking about AECF’s mission, he said, “We’re looking to create projects others will copy, that will change the way market systems work. By doing this with for-profit companies, hopefully they will be there in 10 years,” he said.

Mima Nedelcovych, board director of the Partnership to Cut Hunger and Poverty in Africa, said if governments want to encourage a sea-change in investment, they need to foster a productive environment themselves.“The agro-industrial side can always be financed because it can handle shorter-term loans. But developing infrastructure and putting in irrigation requires longer term soft money.”

Challenge Fund to Accelerate Pro-Poor Growth in Africa

As part of GCARD 2010, Farming First hosted a session entitled ‘Better Benefiting the Poor through Public-Private Partnerships for Innovation and Action.’ Within the discussions, our panel of experts addressed several case studies that present different ways that partnerships have helped to empower smallholder farmers around the world.

Gavin Onley

The Africa Enterprise Challenge Fund (AECF) is a US$50-100 million fund that supports private sector investment benefitting the rural poor in Africa. AECF is hosted by the Alliance for a Green Revolution in Africa (AGRA) and is funded by some of the biggest names in development finance.

A Challenge Fund is a mechanism for allocating and disbursing public funds efficiently and fairly. Organizations are invited to bid for scarce resources, not unlike a tender, but what counts is the quality of the response, not price.  The intention is to get funds to the organisations that truly need them and can use them effectively to realise the broader aims of public policy; and to do this transparently. In the case of AECF the overall policy aim is to promote new ideas that will lead to growth in the rural economies of Africa and creating new opportunities for systemic change in the markets that serve them. The challenge is to identify business ideas with a positive impact on the rural poor through increased incomes, employment, productivity and/or reduced costs. 

The Research Into Business (RIB) window is a special fund of the AECF that is open to business ideas based on the products of agricultural research.  The RIB Funding Window page of the AECF site provides an on-line application form, and guides to completing it. Applicants must also show how the concept will impact on the livelihoods of people in rural Africa. Proposals that are considered to have the greatest positive impact on the rural poor in Africa are invited to present a detailed business plan. Applicants’ Co-investment companies must invest an amount equal to, or greater than, the total funds requested from the AECF.