The funding will be invested in potential high-growth Small and Medium Enterprises operating in the food and agriculture value chains across sub-Saharan Africa.
AFSF will invest in potential high-growth Small and Medium Enterprises operating in the food and agriculture value chains across sub-Saharan Africa.
The investment will focus on Sub-Saharan Africa most especially undeserved countries such as Senegal, Mali and Rwanda.
The board of African Development Bank has approved a $15 million equity investment in Africa Food Security Fund (AFSF), to support enterprises in agri-business SMEs and enhance food security in Africa.
AFSF aims to address the needs of least served operators in agricultural SMEs segment that are not targets of the larger private equity funds and commercial banks.
According to the development bank, the Africa Food Security Fund (AFSF) will invest in potential high-growth Small and Medium Enterprises operating in the food and agriculture value chains across sub-Saharan Africa.
Akinwumi Adesina, AfDB President, in his closing remarks at the Board session, reiterated the need to link all efforts on the project to the Technologies for Africa Agriculture Transformation (TAAT) program for productivity enhancement at the upstream level.
With a focus on Sub-Saharan Africa and relying on its presence in South Africa, Ghana and Mauritius, the Fund will invest in undeserved countries such as Senegal, Mali and Rwanda. It is envisaged that the Fund will create at least 20 direct jobs for each $1million invested, benefit over 14000 smallholder farmers with women taking at least 40% of jobs created.
In addition to its investments, the Fund will provide post-investment support through a technical assistance facility to investee companies.
Zebu Investment Partners will manage the fund because if its experience in food production and processing at the SME level.
The Fund’s investment policy entails the deployment of equity or quasi-equity instruments to provide expansion capital in the majority of cases with an average ticket size of $ 6 million to allow for follow-on investments without the need to seek additional external funding.
The Fund’s investment strategy is fully aligned with the Bank’s Ten Year Strategy (2013-2022), as well as the Regional Integration Policy and Strategy (2013 - 2024), especially on its inclusive activities.