More than $3 billion in private sector investment for the New Alliance for Food Security and Nutrition
The New Alliance is a shared commitment to achieve sustained and inclusive agricultural growth in sub-Saharan Africa. New Alliance efforts will help lift 50 million people out of poverty over the next 10 years by aligning the commitments of Africa’s leadership to drive effective country-led plans and policies for food security and nutrition; the intentions of private sector partners to increase investments where the conditions are right; and the commitments of G-8 members to expand Africa’s potential for rapid and sustained agricultural growth. All parties recognize that achieving transformational and sustainable economic growth and impacting smallholder livelihoods requires attracting significant and socially responsible private investments.
Africa's economic growth, with agriculture as a strong driver, is creating substantial new business opportunities, and the rate of return on foreign investment in Africa is higher than in any other developing region. Responsible private sector investment is a critical component in the development of all economies and thus a vital driver of human development. The private sector can increase food availability by not only increasing investment in production, but also by linking smallholder farmers to broader markets and creating incentives for innovation that improve productivity. This, in turn, can improve access to food and employment opportunities that raise smallholder farmer incomes.
Private Sector Commitments
In order to boost responsible private sector investment and facilitate greater partnership between African governments, the private sector, and development organizations, the G-8 is launching the New Alliance for Food Security and Nutrition which will catalyze private sector investment in African agriculture. Leveraging the work of Grow Africa – a public-private partnership platform co-led by the African Union, NEPAD, and World Economic Forum – the New Alliance is already underway. First wave private sector investment pledges across the agricultural value chain, including irrigation, processing, trading, financing and infrastructure already stand at over $3 billion and could potentially impact millions of smallholders.
Highlights of the 21 African and 27 multinational companies that are signing Letters of Intent include:
Yara International intends to invest up to US$2 billion to build a world-class fertilizer production facility—among the first of its kind in sub-Saharan Africa—and develop regional fertilizer distribution hubs;
Rabobank intends to launch a lending facility in West Africa that would provide up to US$135 million in loans over five years to small and medium-size companies in the region which participate in the agricultural value chain, ranging from production, processing and logistics to services and technology;
Vodafone intends to establish the Connected Farmer Alliance in Tanzania, Mozambique and Kenya to increase the productivity, incomes and resilience of over 500,000 smallholder farmers by strengthening the linkages and feedback loops between smallholder farmers and large agribusinesses, thereby decreasing the cost of doing business with smallholder farmers and helping improve their productivity.
Tanseed, a private seed company in Tanzania, is committed to training contract growers in certified seed production – leading to an estimated $11 million in additional sourcing from local certified seed contract growers – and seed processing using innovative smaller 0.25 to 2kg seed packs to meet needs of smallholder farmers with low purchasing power.
Additionally, more than 60 companies are signing the “Private Sector Declaration of Support for African Agricultural Development” outlining their commitment to support African agriculture through responsible public-private partnerships.