AGRA

By Hailemariam Dessalegn and C.D. Glin

Africa’s agricultural sector stands at a crossroads. With nearly 70 percent of the continent’s workforce working on farms and agriculture contributing about one-third of GDP, the potential to feed its people and fuel its economies should be within reach. Yet less than 5 percent of commercial credit makes it to the smallholder farmers, youth-led agribusinesses and women entrepreneurs who are pioneering climate-smart practices and digital innovations on the ground. This financing gap of US$ 100 billion is more than a market failure, it is a barrier to prosperity and resilience.

Climate shocks are growing fiercer; supply chains are more unpredictable and global competition more intense. Across rural landscapes—from the highlands of Ethiopia to the plains of Nigeria and the valleys of South Africa—farmers experiment with drought-resistant seeds, regenerative soil practices and mobile platforms to manage risk. They do not wait for permission to innovate, but they do wait for capital. Too often, traditional lenders remain bound by rigid collateral requirements and narrow risk models that overlook the rich social and environmental returns small farms deliver.

This is the reason the recent UN Food Systems Summit +4 in Addis Ababa must be more than a diplomatic milestone. For some, it can mark a turning point from pledges on paper to pipelines of affordable, impact-first capital. This can be an opportunity to consider financing models where concessional public or philanthropic funds support communities, where private investors engage to attain social and environmental benefits, and where resource-constrained farmers can access credit, insurance and technical assistance tailored to their seasons and realities.

Blended finance has already shown its power by strategically pairing public grants or guarantees with commercial capital, unlocking billions in new investment. We’ve seen that channeling funds to women agripreneurs lifts productivity, boosts household food security and spurs economic inclusion. Deal rooms at gatherings like the Africa Food Systems Forum connect youth-led agritech startups with impact investors who value both balance-sheet returns and community transformation. Meanwhile, fintech innovations are expanding micro-credit, insurance and savings products through mobile wallets, driving down transaction costs and reshaping risk assessment for rural users. Unlocking capital is only the first step; translating it into impact requires farmer-led networks and local systems that deliver the tools, knowledge, and support farmers need to act.

Yet isolated triumphs cannot substitute for systemic change. When governments and the private sector unite around shared strategies, finance follows. Ethiopia’s Youth Agripreneur Platforms have galvanized young farmers to form cooperatives, develop processing ventures and secure blended funding aligned with national goals. Nigeria’s Agriculture Investment Plans pair credit guarantees with tax incentives to de-risk lending for agro-SMEs. Rwanda’s digital credit schemes and Ghana’s agricultural development bank underscore the power of country-led coalitions to marshal domestic and international capital for inclusive growth.

PepsiCo and the PepsiCo Foundation bring this partnership ethos to community-based agriculture, collaborating with smallholder associations in Ethiopia, South Africa and Latin America to help strengthen local potato and sunflower industries and provide market access. PepsiCo sees regenerative and inclusive agriculture as essential for a sustainable and resilient food system, benefiting both the planet and people, and seeks out opportunities for investment and collaboration to help achieve these goals. A food systems approach requires the whole of the supply chain, which means it is essential that farmers share in this value and receive both the returns and investment needed to help them be full participants.

Private sector investments should be additive, tied to practically measurable, on-farm improvements and complementary to public support. By aligning investments with national food system pathways and co-financing alongside donors, philanthropic funds and development banks, PepsiCo demonstrates how corporate capital—when guided by local stakeholders and impact-first metrics—can help scale sustainable agribusiness and build climate resilience at the farm level.

Crafting an enabling environment for resilient, productive and inclusive food systems requires regulatory reforms that unlock agri-lending, such as credit guarantees and tax credits. These reforms should be paired with investments in robust data infrastructure that shifts risk evaluation from land-based collateral to climate and agronomic performance; and a rapid scale-up of digital financial services to extend banking, insurance and payment platforms to remote communities. Interoperable systems for climate forecasting, soil health monitoring and credit scoring will help empower lenders to underwrite loans based on transparent performance data, not solely on land titles or formal collateral.

As climate change accelerates and global hunger edges upward, directing capital toward smallholder resilience emerges as one of the highest-impact investments worldwide. PepsiCo’s pep+ agenda— including a recently expanded goal to drive the adoption of regenerative, restorative, or protective agricultural practices across 10 million acres by 2030—illustrates how a food and beverage company dependent on agricultural raw materials can drive transformation by lowering barriers for farmers to adopt climate-smart practices.

Post UNFSS +4, we must convert rhetoric into reality by committing to a pan-African blended finance facility, forging data partnerships among governments, tech providers and financiers, earmarking a defined share of agriculture funding for women-led enterprises, and formalizing public-private coalitions backed by transaction-level guarantees. These pillars of action will help create the financial scaffolding that smallholder innovators need to scale their solutions.

Africa’s fields are sown with ingenuity, perseverance and ambition. What they lack is a financial architecture built for their realities, one that transforms good ideas into thriving enterprises and subsistence into sustainable prosperity. By uniting around innovation, inclusion and community leadership – investors, governments and development partners can cultivate a future that feeds the continent, fuels its economies and empowers generations to come. Let us seize this moment in Addis Ababa to sow the seeds of Africa’s prosperity and watch them flourish.

Hailemariam Dessalegn is the Chair of the Board, AGRA and Former Prime Minister of Ethiopia while C.D. Glin is the President, PepsiCo Foundation and Global Head of Social Impact at PepsiCo Inc.