AGRA

Transforming smallholder farming into lucrative commercial enterprises is at the core of most government policies and efforts by development partners across the continent but such efforts must be built on agricultural practices that build resilience and protect the environment.

One technique that can guarantee this is regenerative agriculture. Frida Muendo has applied this to very good effect on her small farm in Kinyonga village in Makueni County.

Kinyonga was once known for its maize production but is now reeling from the impact of weather fluctuations due to climate change, land degradation, limited access to extension services and weak input and output market linkages.

Last year, Ms Muendo was trained in the application of regenerative and climate smart agricultural technologies such as minimum tillage, cover cropping, intercropping (use of legumes), crop rotation, composting, use of organic mulch, agro-forestry, the use of certified stress/drought tolerant crop varieties and seeds, and soil and water conservation technologies. She was also trained in business-to-business linkages and post-harvest management skills.

She is now a resource on the use of these ecological and climate friendly technologies that have so reduced production costs by a third, improved her farm soil quality and increased her yields. Where she was harvesting three bags of maize before, now she is harvesting an average of six to 10 an acre.

Innovative extension

She set up a cereals store where she offtakes grains from farmers in the surrounding villages. She also sells post-harvest handling equipment such as hermetic bags, hand shellers and tarpaulins.

Ms Muendo is now transferring her skills and knowledge to others. She has so far trained 73 farmers on land preparation, seed spacing and how to apply manure and crop protection. Farmers have also been taught how to mulch, use fertiliser and on minimum tillage to help increase farm productivity, soil health and thus earn more income.

In the past, she only used to plant maize. She did not know about soil and water conservation structures or agroforestry but she now intercrops pigeon peas and maize and cowpeas as well. She also has established a tree nursery in her farm and implements soil and water conservation measures.

Ms Muendo’s story demonstrates the effectiveness of nature-positive approaches that are rooted on the principles of local ownership that is based on bottom-up processes, strengthened by science and an enabling policy environment. More investment is needed for scaling and increased adoption of such nature-positive systems. Further investments in awareness and empowerment is required for complete transformation of food systems. 

The experience garnered from Makueni alludes to the need for more robust and innovative extension programs that pay special attention to women and the youth. Having these ingredients will accelerate replication across the country and the continent. 

Originally published

Mr Amede is the Head of Resilience, Climate and Soil Fertility, AGRA – tamede@agra.org

The Alliance for a Green Revolution in Africa (AGRA) has unveiled a policy document that will guide staff members, beneficiaries and all associates towards promoting sustainable agricultural practices, while adhering to an appropriate Environmental and Social Management System (ESMS).

Through this system, all AGRA supported activities in target countries will be conducted in a manner to avoid, reduce or limit negative environmental, social and climate impacts. Instead, AGRA will seek to support the preservation and protection of biodiversity, sustainable management of natural resources and promote improved social wellbeing of beneficiaries.

“We have had all these practices in our programmes and in bits in our policies and guidelines, but now, we have formalized them into a comprehensive policy document and operational manual for enhanced accountability and reporting to our constituents” said Assan Ng’ombe, Resilience Officer at AGRA.

On the social front, the new policy seeks to promote activities that avoid negative impacts on the living conditions, livelihoods and land tenure of communities. It will improve the occupational health and safety at work of its employees, subcontractors and other partners.

“AGRA also condemns all forms of forced and child labor, discrimination, harassment but instead supports the freedom of association and the right to collective bargaining of the workers,” said Mr. Ng’ombe.

By adhering to this policy, the organization will be complying with all relevant environmental, social, health and safety and land acquisition policies, laws and regulations of the countries of intervention.

To be more specific for example, AGRA will not promote or participate in activities that include burning of natural occurring ecosystems, such as forests and savanna, for the purpose of land clearing for the establishment of large scale agricultural plantations.

The policy also prohibits AGRA from supporting interventions linked to production of or trade in pharmaceuticals, pesticide/herbicides, chemicals and ozone depleting substances subject to international phase outs or bans.

The implementation of the policy will not be without challenge as intimated by Mr. Ng’ombe due outdated policies and procedures in some of the countries of operation.

For example, a recent study known as the ‘Insect Atlas 2020’ by the German based Heinrich Böll Foundation named a number of insecticides that have been banned in Europe and North America because they are toxic or highly toxic to bees, but are still manufactured abroad and sold in a number of African countries for agricultural use. National regulations require updating to ensure they are in line with international best practices.

“In such cases, AGRA will not support the use of such banned substances and will work with national governments and stakeholders to update their regulations in line with available scientific evidence and internal guidelines.” said Assan Ng’ombe.

To implement the policy, AGRA will now screen all projects, current and future, to ensure that no aspect of the project is found on the ‘AGRA Exclusion List.’

AGRA will also take informed grant-award decisions based on robust categorization of projects according to environmental and social risk levels, ascertained through environmental and social due diligence and, if and where required commensurate with the scale of the project and the project risks, environmental and social impact assessment studies.

As well, AGRA has instituted measures to monitor compliance with all relevant environmental and social policies, laws, and regulations of the country/ies of intervention as the basic guideline.

“The policy has already been approved by the AGRA’s Board of Directors with the consent of the Management Team. The policy has already been communicated to all staff members and the relevant training for staff across the organisation has been undertaken” said Mr. Ng’ombe.

Related article: AGRA Adopts Environmental and Social Management System for Enhanced Sustainability and Environmental Outcomes

At the end of this month, March 2021, I took a bow and ended my term on the Alliance for a Green Revolution in Africa (AGRA) Board after 4 years of serving. AGRA is a unique African institution that is catalyzing and driving Inclusive Agricultural Transformation (IAT) on the Continent. I have served with visionary women and men who have demonstrated that transformational change in and for Africa is possible and can be realized in our lifetime.

I became involved in AGRA for a very simple reason. With my background in agricultural research and development (AR&D) and a professional career that spanned over forty years, of which 30 of them were with three CGIAR Centers in six African countries, I never stopped to ask myself the question why African national agricultural systems or NARS are still dependent on foreign assistance for agricultural development and transformation.

In the Democratic Republic of the Congo, in the Sahel, and coastal West Africa, I worked within national research systems or was closely associated with them, and foreign technical advisers were always present from as far back as the 1970s to today, within the national research institutes or in relevant Ministries.

I experienced a sense of disappointment and shame. So, when the late Kofi Annan, former UN Secretary-General, called for a Uniquely African Green Revolution and set out to seek funding to create an African organization that would provide technological and advisory support to African countries with African expertise, it was music to my ears. I saw this as not only an opportunity but a major step towards creating an Africa-based and African-led institution for African farmers – an opportunity for many young Africans to contribute to the transformation of their own agrarian systems.

For me, the vision and mission of AGRA gave me hope and when the opportunity came in the second half of the 2000s, first as Vice President and then as President of IFAD, to work very closely with AGRA, within months I was in discussion with the then AGRA Vice President, Dr. Akinwumi A. Adesina, now President of the African Development Bank, to develop an AGRA-IFAD Partnership Agreement. The rest is history. Dr. Agnes Kalibata, President of AGRA, has taken that partnership to a much higher and strategic level. When thereafter I was approached by the AGRA Board to join as an independent board member, not only did I accept, but I also was on my flight to London for my first Board meeting on 5th April 2017, just days after my retirement from IFAD on Friday 31 March 2017.x

I have not only seen AGRA evolve over the years – from supporting the development of systems that are critical to private sector capacity, to delivering inputs to farmers such as improved seeds and fertilizers, and innovating new approaches to extension services,- but have also seen, perhaps, more importantly, AGRA strengthen its ability to work with governments with such success that governments themselves are seeking the attention of AGRA for support.

I am also encouraged by several policy reforms by governments, which AGRA has been instrumental in, supporting countries to formulate and implement in a relatively shorter time than it used to take with huge opportunities for cross-country learning coming in from AGRA bird’s eye view of the continent. Broad and inclusive agricultural policy reforms are foundations for agriculture transformation. I am particularly encouraged by the speed and quality of this work for which I believe AGRA should be commended.

AGRA’s initial strategic plan, focus and priorities were directed at generating improved resilient crop varieties and hybrids adapted to the agroecological landscape of Africa. Access to good quality seed and basic inputs have been the major drawback to improvements in African agriculture.

The second area is AGRA’s contribution to the capacity building of African scientists at MSc and PhD levels. I would combine the third one to include AGRA’s role in building, working with and supporting farmers organizations, SME and agro-dealers, particularly in the area of making markets work for staple crops critical to how farmers access finance.

About 90% of the agri-business sector comprises of farmers who are basically smallholder “agripreneurs” living in remote rural areas and growing staple crops – only 20% of which is consumed at the farm, 80% is sold to support none producers in cities and other places, and is the main source of revenue. For these farmers/agripreneurs, IAT is most important and must be appropriately institutionalized within the government apparatus and the delivery ecosystem that must function for the farmers to grow their businesses.

I am very happy that Inclusive Agricultural Transformation is AGRA’s new mantra. Agrarian transformation is the foundation for social and economic transformation of any country. Why is this so? Look at the history of all developed countries of the world that are today described as advanced economies. Starting with Europe in the 17th and 18th centuries to Japan in the 19th Century, to China and Brazil in the 20th, they all went through an agrarian revolution that generated surpluses for the industrial sector that revolutionized their economies – from large labor-intensive rural farming populations that diversified into input-intensive, high productivity farming and off-farm economic activities, creating jobs and wealth in the process and transforming rural communities into vibrant economic towns and cities. This did not come about through the wealth generated from oil and gas. For me, rural transformation is synonymous with agrarian or inclusive agricultural transformation and surpluses from the latter fuels the industrial sector.

We thought the 21st century was going to be the century for Africa. Sixty years post-independence, we are yet to succeed in leapfrogging into an industrial age while deceiving ourselves that our problems can be solved by a digital revolution. Oil and gas do not feed hungry people neither will computers and the digital revolution alone transform rural livelihoods. They make a few people rich and the majority poorer! Food is grown on land and water, and until we see food, land and water and the environment in which they exist holistically, we will continue to export our cocoa, coffee, cotton, tea, bananas, timber etc. for processing elsewhere while spending billions to buy their value-added products as well as paying others to grow our food for us and creating more unemployment and insecurity at home!x

This is the story our governments need to be told and to understand – that building and funding our own institutions in all sectors with a deep sense of ownership and responsibility is central to bringing about lasting and sustainable change and transformation – no people, no nation ever walked through such transformation on the basis of international development assistance!

AGRA should therefore capitalize on its strengths. AGRA cannot and should not be everything to everybody. For AGRA, inclusive agricultural transformation should serve to guide us into 2030 and this means inclusive – food, land, water, the environment, and people with agriculture as the glue that ensures their interlinkages. AGRA should become a “solutions” provider to its beneficiary populations – smallholder producers and SMEs, women and youth against the pandemic, climate change, for access to markets with strong policy support so that they become more resilient to shocks. The pandemic is not only a health problem, but also has generated social and economic problems, political issues, is affecting food systems and everything in our daily lives. Over the years, AGRA has developed a formidable partnership platform, the AGRF, and has forged unique partnership models with and between institutions, governments, and the private sector. This is AGRA’s greatest tool which can galvanize broad support and action towards achieving an inclusive agricultural transformation by 2030.

As I approached the last year of my first term on the Board, I did sense that a full 3-year second term was probably too much to ask for. It was time to slow down. But little did I know that even before the end of my tenure on the AGRA Board, I would work closely with President Agnes Kalibata as the Special Envoy of the Secretary-General on the UN Food Systems Summit in my capacity as the CGIAR’s Special Representative to the UNFSS. Her appointment to this role speaks loudly in her favour but also throws light on the institution she leads, i.e., AGRA.

The UNFSS is a Global Movement bringing together everybody from producers to consumers, experts, scientists, environmentalists and activists, governments, institutions, civil societies, businesses and the private sector, women, and youth. Will it be a solutions summit with actionable plans and financial commitments or simply produce another set of political declarations?

As I said earlier, I see AGRA as an Africa-based and African-led institution that puts African farmers squarely at the center of the continents’ development – an opportunity for many young Africans to contribute to the transformation of their own agrarian systems. I also said that the UNFSS throws light on AGRA. To answer this last question, we should ask ourselves “how is AGRA contributing to building back better from a food systems perspective?” The work we have done and what we do leading up to 2030; mindful of the challenge of Climate change and COVID19 since last year, will be our story!

I wish AGRA the very best and I look forward to supporting AGRA as an “elder” to achieve IAT in Africa.

Written by Dr. Kanayo Nwanze

Originally published

New leadership learning centre for established and emerging leaders in Africa’s agriculture sector launched by AGRA, African Management Institute, and USAID’s Policy LINK and financed by the German Development Cooperation through KfW Development Bank.

Nairobi, Kenya, 27 April 2021 – The Alliance for a Green Revolution in Africa (AGRA) has launched a unique Centre to support African leaders in the agriculture sector. The Centre for African Leaders in Agriculture (CALA) is a key part of a scale-up of investment to AGRA by the German Development Cooperation through KfW Development Bank. CALA represents a deepening of AGRA’s ongoing support to state capability, and is complementary to the technical assistance that AGRA has been providing to transform national and regional agriculture priorities alongside government, public and private sector partners. In addition to KfW’s founding financial support and AGRA’s lead programmatic role, the Centre’s founding partners also include the African Management Institute (AMI) and USAID’s Policy LINK.

“Africa’s agriculture is full of opportunity. However, as the last years have shown, as a continent we also face many threats brought about by natural shocks, such as climate change, and the challenges of continental trade and policy coordination,” said Dr. Agnes Kalibata, President of AGRA in launching the Centre. “Our experience at AGRA has taught us that achieving Africa’s food security targets and achieving inclusive economic growth will require leaders who are responsive, adaptable and collaborative, while also being ready to integrate new strategies for environmentally sustainable agriculture together with a diverse set of stakeholders.”

With these development objectives in focus, CALA will initially offer a 16-month Advanced Leadership Programme: Collaborative Leadership for Africa’s Food Security and Sustainability designed for established and emerging sector leaders spearheading priority country-level agriculture strategies. The programme’s core focus will be on supporting leaders in government, the private sector, and civil society with the practical skills to navigate, coordinate and better implement solutions to national agriculture challenges. The programme will also profile agro-ecological principles which are increasingly being recognized as contributing to sustainable farming and food production, and resilient food systems in the face of increasing climate change impacts.

AMI, one of the continent’s leading providers of leadership and business management programmes, will be the lead learning partner. The Centre’s programming will incorporate AMI’s hallmark blended learning approach, with a strong initial focus on highly engaging programming delivered virtually. This will include online learning (and in-person workshops when possible), on-the-job coaching, leadership forums, and action learning projects tied to national policy priorities.

Rebecca Harrison, CEO and co-founder of AMI said, “We focus on developing practical leadership skills through our virtual and in-person platforms, which leaders across the agriculture sector can apply on the job and within policy processes. Our learning approach, rooted in practical application rather than theory, will equip these leaders to better implement sector priorities, advance their careers and networks and become agents of change.”

Supporting AMI with these programmes will be USAID’s Policy LINK, which will lead group coaching sessions as well as contribute to the design of learning materials.

Policy LINK’s Chief of Party, Steve Smith, emphasised the importance of coaching as a core part of hands-on support for leaders in the sector. “Effective leaders marshal a range of actors to forge collaborative solutions to complex challenges — a skill that cannot be taught in the classroom alone,” Smith said. “The CALA coaching component will build on the Centre’s leadership curriculum by putting participants on a self-directed, lifelong leadership journey.”

Applications for the Centre’s first programme, the Advanced Leadership Programme are now open with an application closing date of 26 May 2021. Accepted and enrolled participants will begin the programme in August of 2021. Over the first three-years, the programme will have two cohorts with approximately 80 leaders each, bringing the total number of leaders to a minimum of 160. Initial cohorts will be composed of leaders from eight countries: Ethiopia, Ghana, Kenya, Malawi, Nigeria, Rwanda, Tanzania, and Uganda.

To learn more about CALA and to apply for the Advanced Leadership Programme, visit http://cala.agra.org 

-END-

About AGRA

Founded in 2006, the Alliance for a Green Revolution in Africa (AGRA), is an African led African-based organization that seeks to catalyze Agriculture Transformation in Africa. AGRA is focused on putting smallholder farmers at the center of the continent’s growing economy by transforming agriculture from a solitary struggle to survive into farming as a business that thrives. As the sector that employs the majority of Africa’s people, nearly all of them small-scale farmers, AGRA recognizes that developing smallholder agriculture into a productive, efficient, and sustainable system is essential to ensuring food security, lifting millions out of poverty, and driving equitable growth across the continent.

For more information visit: www.agra.org

About AMI

AMI enables ambitious businesses and leaders across Africa to thrive, through practical tools and training. We equip leaders with tools to build their business, help companies train their teams and run work readiness programmes for young people starting their careers. AMI’s programmes combine online and mobile tools with interactive workshops and on-the-job practice and support. During the COVID period AMI is delivering fully virtual programming across the continent.

AMI has worked with a range of businesses and organisations to support entrepreneurs and managers build and grow their businesses across Africa including Uber, Nestle, Radisson Blu, Mastercard Foundation, USAID, Shell Foundation and Equity Bank. AMI has directly trained over 30,000 people in over 35 countries.

AMI has offices in Nairobi, Kenya, Kigali, Rwanda, and Johannesburg, South Africa.

For more information on AMI visit: www.africanmanagers.org 

About Policy LINK

Policy LINK is a global Feed the Future program to advance leadership and collaboration for better policy systems. Feed the Future is America’s global hunger and food security initiative, led by USAID.

Africa lagged behind in the agricultural development that the world experienced in the mid-1960s.  By the mid-1990s, the continent’s agriculture was at its lowest ebb, with alarming implications for incidences of food shortages and chronic malnutrition. By the mid-2000s, there was compelling evidence that plant breeding capacity globally had dropped to alarming levels and Africa had been depleted of the human capital needed to make genetic improvements for the staple crops on which the economies of the African nations hinged. 

Urgent action was needed, but Africa’s governments had not awakened from their slumber as several notable international financial institutions had convinced the governments that higher education need not be a priority in Africa. Recognizing that Africa faced an imminent challenge in its agriculture, the Program for Africa’s Seed Systems, led by Dr. Joseph DeVries, had to act decisively and urgently. The Alliance for a Green Revolution in Africa (AGRA) had been put in place thanks to the generosity of the Bill and Melinda Gates and the Rockefeller Foundations. Hired on at AGRA, Dr. DeVries (formerly of the Rockefeller Foundation) and his colleagues, led by an acting President, Dr. Peter Matlon initiated conversations to replicate in West Africa, a model, first tested by the Rockefeller Foundation at the African Centre for Crop Improvement (ACCI), University of KwaZulu-Natal, South Africa. Thus began the competitive search for a suitable location to host the West Africa Centre for Crop Improvement (WACCI). 

In “My Journey with the Alliance for a Green Revolution in Africa: The WACCI Story”, Professor Eric Danquah, the Founding Director of WACCI, provides a detailed account of how his frustrations at the University of Ghana following his graduation with a Ph.D. in Genetics at Cambridge University were transformed by conversations in 2005 and 2006 with agricultural leaders at Cornell University, USA. Those conversations culminated in the development of one of the most innovative institutions for training Africans at the Ph.D. level in plant breeding.

WACCI was established at the University of Ghana in 2007 with a 10-year grant of US$ 11.5 million to train African students on African crops in Africa for Africa. Today, the Centre has more than trebled initial investments to over US$38 million, excluding in-kind contributions valued at over US$ 3 million. Since its inception, the Centre has enrolled 149 Ph.D. students in Plant Breeding and 65 MPhil students in Seed Science and Technology from 20 countries since its inception and graduated 95 Ph.D. and 30 MPhil students who are currently leading crop improvement programmes in 14 countries in Africa. The Ph.D. graduates have published highly informative articles in high-impact journals and released over 95 improved and resilient crop varieties that are impacting farmers’ fields in five African countries. 

To achieve this, WACCI established a strong curriculum which meets global standards and has both national and international accreditation. Over 30 faculty from 13 academic departments at the University of Ghana offer first-class instruction, supervision and mentoring of the next generation of plant breeders and seed scientists and technologists. In addition, WACCI has developed partnerships with national, regional and international partners, both public and private, involving lead scientists from world-class universities as well as the institutes of the Consultative Group of International Agricultural Research (CGIAR) who support teaching, supervision and mentoring of students.

Following an open, rigorous evaluation of proposals by the World Bank, WACCI was selected as a Centre of Excellence, thus qualifying it to receive investments of up to US$ 13.5 million in a twophased project spanning 2015 – 2023 to strengthen and expand the scope of the WACCI project. As a World Bank African Center of Excellence (ACE), WACCI boasts of excellent facilities for teaching, learning and research. An Enterprise Hub for Agricultural Innovation (KAEHAI) established at WACCI in honour of Mr. Kofi Annan for his service to AGRA and the University of Ghana addresses the challenges of agricultural commodity value chains and equips African youth with knowledge and skills for agribusiness start-ups. The Centre has evolved into a sustainable agricultural innovation and entrepreneurship institution.  

With support from AGRA, WACCI initiated a hybrid maize breeding programme in 2009, leading to the release of three high-yielding and resilient maize hybrids in 2018. The hybrids, which yield between 9-11 tons/ha, are currently under commercialization and should change the maize production narrative when they get into farmers’ hands by 2021. Centre-funded research projects involving international partners have been initiated by a number of early-career scientists in cowpea, soybean, cassava, sorghum, frafra potato and tomato utilizing modern technologies, tools and methods to efficiently and effectively work towards developing a pipeline of products that drives markets and industries. Again, WACCI’s early-career scientists are partnering with faculty from Iowa State University, USA, to develop instructors’ guides for five on-line courses that WACCI will host on its website. This initiative development positions WACCI faculty as leaders in post-graduate training in plant breeding. Other innovations at WACCI include an instructive book on Demand-Led Plant Breeding written by WACCI and its international partners and published by the Centre for Agriculture and Bioscience International (CAB) for both formal and continuing education of plant breeders.

In 2015, a Centre-commissioned international review panel led by Professor Emerita Rita Mumm of the University of Illinois, USA, assessed that WACCI was well-positioned to join the ranks of top-tier institutions educating the next generation of plant breeding professionals globally. The report concluded that “Given WACCI’s evolution, strategic plans for future expansion and record of success, WACCI is an institution poised to have a tremendous impact on food security for Africa in the decade ahead by providing Africans with vital education in Africa to meet regional and global needs”. It is also instructive that a country-commissioned study directed by the Ministry of Finance, Ghana, concluded that “Well-managed institutions like WACCI with goals of sustainability in Ghana and expectations of efficiency and ethics are rare and match the Ministry’s vision for the future of Ghana”.

The WACCI Founding Director, Professor Eric Danquah, was the first African to win the Global Confederation of Higher Education Associations for Agriculture and Life Sciences (GCHERA) World Agriculture Prize in 2018.   He credits AGRA PASS, led by Dr. Joseph DeVries, for the smart investment AGRA made in establishing WACCI and commends the Cornell University team, led by Professor Ronnie Coffman, for opening Cornell’s doors for collaboration. He opines that the majority of the WACCI graduates would have otherwise been lost to the diaspora if WACCI had not been established in 2007.  

Professor Danquah acknowledges the contributions from the University of Ghana and all partners, and cites compelling evidence for WACCI’s sustainability. He submits “Let every policy maker on the continent, every institution, public or private and every development partner prioritize quality plant breeding education as the sine qua non for lifting Africa to the next level, from farmers’ fields to markets and industry, for socio-economic development of Africa” He concludes:  “There is compelling evidence from AGRA’s 2019 and 2020 Reports that if the governments of Africa were bold enough to make the necessary infrastructure and policy investments in the agricultural sector, socio-economic development would be a matter of course in the decade ahead”. He believes the reports provide the context for strengthening and sustaining African Centres of Excellence. Read the full story here

Read how data and performance was used to develop bankability metrics. The new bankability metrics incorporates robust sector data and research deepens the sector’s understanding of how to close the estimated $65 billion annual financing gap for agri-SMEs in Sub-Saharan Africa.

A persistent disconnect

Every day in emerging markets, farmers struggle to access the inputs and markets they need to increase their yields and incomes to improve their livelihoods. Though there are innovative financial products and approaches to financing the agricultural sector, medium and small agribusinesses that deliver the essential services to farmers still lack access to funding, which is essential to help them grow. On the other hand, lenders have faced challenges in obtaining the right kind of information in lengthy and expensive due diligence processes from these businesses, making them shy away from lending to agri-SMEs. Unfortunately, agri-SMEs may not operate to the norms, standards, and expectations of lenders. Although there is an increasing number of examples that form outliers in this reality, generally speaking, there are still two different worlds that struggle to understand one another: lender and agri-SME.

Cracking the problem

Last year, SCOPEinsight and the Center for Financial Inclusion (CFI), with support from Alliance for a Green Revolution in Africa (AGRA), embarked on creating a bridge between agri-SMEs and financiers. The team researched over 90 lenders and industry actors and analyzed SCOPEinsight and the Council on Smallholder Agricultural Finance (CSAF) data to understand some of the driving factors behind the significant financing gap.

The research revealed the following:

• Lenders currently require a large amount of information and spend enormous time and resources to source and assess agribusinesses’ bankability. Not only does this result in high transaction costs, but the inefficiency results in fewer businesses being screened and leads to larger ticket sizes.
• Within the eight dimensions of professionalism[1], three key drivers influence the likelihood of an agri-SME receiving a loan[2]. These are internal management, market performance, and management.

Standard Measurement Tools are Effective

The research demonstrated that the following root problems must be addressed if access to finance becomes a reality for agri-SMEs. Among these are:

1. A professionalization process for agri-SMEs needs to be in place, so agri-SMEs have a roadmap to become more professional (and thereby meet market requirements). By more “professional,” we mean that the agri-SMEs is using systems and processes that are accessible, auditable and understandable by outsiders like lenders. The prohibitive collateral requirements that many financiers have stemmed from Central Bank regulations and requirements and the lack of any other reliable proof that the SME can deploy and repay external funds.
2. A common language (i.e., the Bankability Metrics) makes the interaction between SME and banks easier because there is agreement on professionalism defined in indicators/measures. The metrics also offer an alternative risk assessment instead of collateral requirements.

From this research, we propose two solutions: 1. Agri-SMEs follow a roadmap to help them professionalize, and 2. Use a common language (e.g., Bankability Metrics).

Solution #1: A Standardized, data-led professionalization process for agri-SMEs

SCOPEInsight collects data from thousands of SMEs and can understand what aspects of an SME’s operations may help them meet lenders’ expectations. SCOPE assessments measure the most critical aspects of running an agribusiness and comprise eight dimensions of professionalism.

These dimensions are internal management, financial management, operations, sustainability, production base, market, external risk, and enabling environment. SCOPE assessments contain over 200 data points, and so we analyzed this data to map correlations. This extensive analysis uncovered that planning, budgeting, sourcing, and support from capacity builders are essential factors in graduating an agri-SME towards bankability. For a less mature agri-SME to become bankable, they need to focus primarily on:
• Recordkeeping & monitoring.
• Marketing strategy.
• Financial Management.
• Governance.

While, these factors may seem as though they are qualitative, SCOPEinsight, however, has developed a standard set of indicators to measure proficiency (or rather professionalism) in these areas. Through using a standard measurement tool, agri-SMEs can know where they need to improve and communicate on their performance with lenders.

We have several examples of where applying a standard tool has enabled capacity builders to develop tailor-made programs to address the gaps identified and subsequently help the agri-SME access finance. One such example is a recent project with the IFC and Heineken in Ethiopia which used SCOPEinsight’s standard measurement tools to identify and strengthen weaknesses among 39 agribusinesses, 23 lead farmers, and 14 unions. The project’s results showed that $1.8M was mobilized in short-term financing through local MFIs for 29,000 farmers with virtually zero defaults.

Solution #2: Common Language: Bankability Metrics

The bankability metrics focus on business activity, financial performance, management capacity, and governance. The team analyzed the wide variety of lenders’ metrics to identify metrics with the most significant common ground and those most effective in screening creditworthiness. Each lender has a unique risk appetite, so the metrics do not identify benchmarks for bankability but rather provide a common set of metrics.

A vision for the future

The bankability metrics, along with a market-oriented graduation system, can feed into a portal facilitating linkages between (agri-SME and financiers), lower costs (of due diligence and technical assistance), decrease financiers’ risk, and improve visibility. A standard list of limited metrics would facilitate the lenders’ process and allow lenders to identify the agri-SMEs that meet their pre-screening requirements. This is a more efficient process of selecting agri-SMEs for the due diligence phase, and the agri-SMEs are of higher quality as they meet the lender’s requirements. This will lead to a higher success rate against lower costs.

How can YOU start to use the metrics?

The Bankability metrics can be used by all industry leaders –donors, business development service providers, and lenders alike.

Are you a lender? Then you can request prospective agri-SMEs to submit bankability metrics during the pre-screening process, early in the discovery phase. This can help you make a pre-due diligence decision with greater efficiency.

Are you an agri-SME? When you request a loan, you can proactively submit these metrics to lenders, improving your chance of receiving finance. Are you a donor? You can embed the bankability metrics within your agri-SME programs. Not only will this help agri-SMEs access finance, but they can also help you measure programmatic effectiveness as these are quantitative.

Are you technical assistance or business development service provider? Use these metrics to identify the agri-SME’s weak points and build their capacity accordingly.

ACCESS The Bankability Metrics and Resources

• You can watch the recording of our webinar and download the slides.
• You can access the Mobilizing agricultural finance report.
• You can access the accompanying Data collection form for the Bankability Metrics.

[1] SCOPEinsight measures eight dimensions of professionalism: internal management, operations, sustainability, financial management, market, external risk, enabling environment, and production base.
[2] High professionalism scores in the marketing strategy (including pricing and market monitoring), internal organization (including risk and compliance), governance, and business planning dimensions increased the likelihood of an agri-SME receiving a loan, implying increased creditworthiness. Surprisingly, though financial management was ranked amongst the top influencers of loan likelihood, the analysis validated the research findings that metrics related to business professionalism, management, and governance are critical in determining creditworthiness.

The alignment of investments by development partners with governments’ plans is important for a faster response to the needs and aspirations of small holder farmers, says Thierry Ngoga, the Head of Support to State Capability at the Alliance for a Green Revolution in Africa (AGRA).

Ngoga notes that while governments have a big role to play in enforcing an equitable access to production resources like land, improved farm inputs, technologies, information and financial support, they often require technical help and other forms of capacity assistance from other stakeholders in the agriculture industry.

Citing the tragic story of Awino, a farmer in the lower Nyando Basin of Kenya’s Kisumu County, Ngoga appealed for the alignment of strategic investments by agriculture sector players with plans that cushion smallholder farmers from all shocks. Awino is currently struggling to feed her family after losing her 2020 crop and only cow to floods, before Newcastle disease wiped out her entire flock of chicken.

“Without access to savings, credit, crop or livestock insurance, Awino has no option but to reduce the family’s number of daily meals,” said Ngoga, while recalling that Awino does not have a title deed to confirm her ownership of the four-acre farm she inherited from her late husband.

Ngoga, however, noted that there is hope in sight as partnerships between various African governments and institutions like AGRA continue to yield the programmes, policies and interventions required to transform the agricultural landscape. However, he added, more can be done to hasten the progress.

“Through strengthened government support, smallholder farmers like Awino can build the resilience they need to withstand floods, droughts and other extreme events,” he said.  

Ngoga’s immediate recommendations are investments that promote resilient agricultural practices This, he says, requires increased a coordinated investment by governments, private sector players and other development partners in rural infrastructure, agricultural research and training, technology development, and the enhancement of plant and livestock gene banks.

“Market systems must also be made to work properly, devoid of distortions,” he concluded.

Read the full blog post here

The COVID-19 pandemic has created massive disruption in agri-food systems around the world. It has compounded the food security situation globally, with estimates that up to 132 million more people will experience food insecurity as a result.

The accompanying economic crisis has hit Africa hard, with the continent’s real GDP shrinking further by 3.4% bringing the cumulative decrease down by 7.3% from the growth projected before the pandemic. 

Clearly, farmers are in urgent need of support in order to protect their incomes and safeguard food and nutrition security, so they can participate in economic recovery efforts post COVID-19.

We know from our experience with Ebola that a pandemic impacts food supply, and this is something we must address with urgency. I fear that unless we build back better now, transforming our food systems, we may see soon see famine in Africa.

So what can be done to bolster African food systems, and ensure we ‘build back better’ when it comes to agriculture? To answer this, there is a full ecosystem that needs to be reviewed.

Given that agriculture accounts for at least 23 per cent of Africa’s GDP, policies and investments that strengthen resilient farming systems will be pivotal to growth post-pandemic.

First of all, Africa is too reliant on food imports. The food import bill has increased from $15 billion in 2008 to $50 billion in 2020 – much of it food that could be grown at home. COVID-19 is now with us for the long term. We should prepare with policies that mean we will not go back to the economy of yesterday. We must no longer be dependent on food imports.

From the farm gate, our farmers are short-changed. We must help smallholder farmers access markets, credit and banking. We need to de-risk agriculture, supporting agribusiness with sound financial underpinnings. This means guaranteeing loans, particularly for young farmers who may not have financial backing.

We must also realise our greatest asset: our youth. Africa has the youngest population of any continent, with 60 per cent of the population under 25. We can create young entrepreneurs in the agriculture sector, who will transform the economy.

To do this, we need to support the technology and innovation they will embrace, often via their mobile phones. Digitisation can reduce post-harvest losses, for instance, allowing us to predict markets and giving a better link between farmers and consumers. In this way, agriculture can be seen as a business – not a vocation for poor people.

Our young people are right behind this drive, they understand the benefits that technology and innovation bring. Across the continent, revamping food systems will create huge opportunities for our young people, transforming our economies.

Seizing this opportunity to build back better could not be more important – it is a health issue, because we must nourish our children, and it is an economic issue, because we must catalyse growth. It is also a trade issue, involving infrastructure and the private sector.

And lessons must be learnt from COVID-19. We need national food balance sheets, and oversight of strategic reserves, so we can ensure policy predictability using evidence from data to deal with shocks. Some of these systems are currently fragile, leaving us underprepared.

In conclusion, the Covid-19 pandemic illustrates that even well-intended policies can be undermined by unexpected shocks. The impact on agriculture and food systems in Africa will require deliberate cross-boundary coordination and support. These policy actions should not be aimed at returning to a pre-Covid era, but instead, must propel African agriculture through technological advance.

As Africa takes swift actions to recover and grow, we must understand that we cannot and should not go back to the economy of yesterday. We must innovate and adapt to the new world. Vaccines are now offering us hope. This is a moment of great opportunity: African agriculture cannot be left behind.

Vice president of Policy and State Capability at AGRA