AGRA

2020 presented the world with unique challenges that, in one way or another, impacted us all. The COVID-19 pandemic posed a stress test to global agri-food systems in ways previously inconceivable.

For the first time ever, the AGRF summit took place in a virtual format and a hybrid component, comprising both a scaled down physical event in the host country, Rwanda, and digital participation from around the world. This was the best-attended AGRF Summit of all time, with over 10,400 registered, and close to 7,000 active delegates from 154 countries, including 492 global speakers. Over four days, we had meaningful engagements on how to capitalize on the economic power of rapidly-growing urban populations to create prosperous, sustainable food systems for Africa.

Without a doubt, the conversations at last year’s Summit presented a step-change in our approach towards the pursuit of food & nutrition security and the increasing shared prosperity across Africa. The conversations yielded tangible resolutions to foster the transformation of the agri-food sector to sustainably feed the continent, and the rest of the world. In this report, you will read about these resolutions in light of the current state of food and agriculture in Africa, as well as their implications on the future.

The 2020 Agribusiness Deal Room was the biggest Deal Room event to date since its inception in 2018 with more than 3,600 delegates from 91 countries in attendance. There were more than 700 SMEs seeking more that USD 547 million in funding from over 312 capital providers. More than 15 African governments presented investment opportunities worth USD 7.2 billion.

You can download the AGRF summit report here and the DealRoom report here

The search is on for the winner of the 2018 Africa Food Prize – the preeminent award that recognizes outstanding individuals or institutions that are leading the effort to change the reality of farming in Africa from a struggle to survive to a business that thrives.

The US $100,000 Prize celebrates Africans who are taking control of Africa’s agriculture agenda. It puts a bright spotlight on bold initiatives and technical innovations that can be replicated across the continent to create a new era of food security and economic opportunity for all Africans.

In 2020, Dr. André Bationo, a researcher from Burkina Faso, and Dr. Catherine Nakalembe, a Ugandan researcher, jointly received the Prize for their exceptional contribution towards the promotion of food security across the continent.

In 2019, Dr. Emma Naluyima, a smallholder farmer and private veterinarian from Uganda, and Baba Dioum, a policy champion and agricultural entrepreneur from Senegal were recognized for their remarkable achievements in demonstrating and promoting innovative and sustainable growth in Africa’s agriculture through improved resource use and market links.

In 2018, International Institute for Tropical Agriculture (IITA) was awarded the Prize for generating solutions on and off the farm that have improved the lives of millions in the face of climate change, a surge of crop pests and disease, and an urgent need for youth employment.

The 2017 Prize was jointly awarded to Hon. Prof. Ruth Oniang’o, a professor and advocate of nutrition from Kenya, and Mme Maïmouna Sidibe Coulibaly, an entrepreneur and agro industrialist from Mali, for their exemplary efforts in driving Africa’s agriculture transformation.

The two trailblazers succeeded the 2016 winner – Dr. Kanayo F. Nwanze, the former President of the Rome-based International Fund for Agricultural Development (IFAD). Dr. Nwanze received the inaugural Prize for his outstanding leadership and passion for advocacy in putting Africa´s smallholder farmers at the center of the global agricultural agenda and for his courage in reminding African leaders to go beyond promising development and change to delivering it.

Now in its fifth year, the Prize has grown in stature and popularity. Nominations came from over 20 African countries in Africa as well as from countries outside the continent.

The 2021 winner(s) will be chosen by the Africa Food Prize Committee, an independent body of pre-eminent leaders that is chaired by the former Nigerian President, H.E. Olusegun Obasanjo. The other committee members are Dr. Vera Songwe, Dr. Eleni Z. GabreMadhin, Prof. Joachim von Braun, Dr. Kama Rutenberg, Mr. Birama Sidibé and Prof. Sheryl Hendriks.

With the acknowledgement that agriculture is Africa’s surest path to inclusive economic growth and development, the Africa Food Prize exists to reward individuals and institutions that are pioneering efforts to create prosperity in Africa. It is hoped that this will encourage others to follow their lead.

The Africa Food Prize began as the Yara Prize, and was established in 2005 by Yara International ASA in Norway to honor achievements in African agriculture. Moving the Yara Prize to Africa in 2016 and rechristening it the Africa Food Prize gave the award a distinctive African home, African identity and African ownership.

The deadline for nominations is May 25th 2021. The winner(s) will be unveiled at the African Green Revolution Forum (AGRF) this September.

King’ori is a quiet village in Arumeru District in Arusha, Tanzania.

It is in this region, East Africa’s diplomatic hub, that one finds Uremi Agricultural Marketing Co-operative Society (Amcos).

The Seeds of Gold team finds its members gathered at a social hall to discuss an important and urgent matter. A miller in Kenya had ordered thousands of bags of maize from the cooperative, thus members have to meet and agree on how to service the order.

While members of Uremi had hundreds of bags of maize preserved in one of their storage facilities, they needed to aggregate more to supply to the Kenyan millerthrough a trading company named Union Service Stores Ltd (USSL).

The firm buys maize from smallholder farmer groups, adds value to it by threshing, drying it further and checking the moisture content to ensure it is aflatoxin-free, before selling to various buyers, including major off-takers in Kenya.

“We are able to supply the maize because we are working together as smallholder farmers, which enables us to aggregate our produce and sell to major buyers,” says Rejeaeli John Sarakika, the chairman of the cooperative.

He notes that Uremi group consists of 220 smallholder farmers in King’ori. There are other such cooperatives in different parts of the country.

Direct dealings

Martin Silayo, the production manager at USSL, says the company has a contract to supply one of the major milling companies in Kenya with 40,000 metric tonnes (40 million kilos) of maize every year. They aggregate the maize from Tanzanian smallholder farmer groups like Uremi.

“For a long time, we depended on traders to supply us with the grain. But since 2016, we learnt that dealing directly with smallholder farmer groups was more sustainable because we can intervene to improve the production where necessary, but above all, we can easily trace the source of our grain and monitor the quality right from the farm to the time it is delivered to our stores,” says Silayo, noting Kenyan millers are their major buyers.

Dealing with smallholder farmer groups has led to formation of hundreds of such outfits among farming communities across Tanzania, enabling the firm to easily source grains that it sells to Kenya.

Prices differ depending on which part of Tanzania the grain comes from and the season.

“But the cooperatives sell us from Tsh400 (Sh20) to Tsh600 (Sh30) per kilo. Then we add a 10 per cent mark-up after value addition,” Silayo says.

In Kenya, a kilo of maize currently averages Sh45, a price that pushes away millers.

Game-changer

Working in groups, thanks to training from the Alliance for a Green Revolution in Africa (AGRA), has been a game-changer for thousands of small grain farmers in the country, according to Sarakika.

John Macharia, Agra’s country manager for Kenya, notes Tanzanian farmers are ablto produce maize cheaply because government subsidies target the correct people and inputs are delivered at the right time.

“This is unlike in Kenya, where we have previously seen even the most affluent people in the society receiving fertiliser subsidies.”

He observes that another advantage Tanzania has over Kenya is that it has far more arable land for maize production.

“Whereas a Kenyan smallholder is able to afford just one acre, Tanzanian smallholders can afford more than 10 for maize production.”

Kenya’s annual maize production averages 40 million bags, against an annual demand of 52 million. The difference is thus imported from Tanzania, Uganda and elsewhere.

According to Macharia, the Kenyan method of producing maize, from subsidies to marketing, where the government is the main buyer, may not be sustainable, but it is necessary given the high cost of production.

“However, farmers, especially those from semi-arid regions, should consider other income-generating crops such as sunflower, whose returns are far much better than maize, and the cost of production far lower.”

Training

The small farmers in Tanzania mainly deal in maize, beans, soybeans, sunflower and potatoes. Through the groups, they are linked to the market, and above all, can easily be trained on post-harvest handling technologies that enhance food safety, food quality and reduce losses.

“More than 30 per cent of the food produced for human consumption across the continent is lost to inadequate post-harvest management, lack of structured markets, inadequate storage in households and on farms as well as limited processing capacity,” says Edward Agaba, a programmes officer at Agra.

Maize is the most important crop across sub-Saharan Africa, consumed by 50 per cent of the population. But according to the International Institute for Agriculture, 28 per cent of maize has to be imported outside Africa to meet a shortfall in demand.

“We can easily change this tide by simply investing in smallholder farmers. We also need to overcome problems associated with informal grain trading and increase farmer incomes,” says Gerald Makau Masila, the executive director, Eastern Africa Grain Council (EAGC).

Soil testing

Sarakika observes that through the group, they are able to test their soils to understand the nutrient deficiencies, use the right farm inputs and employ good agronomic practices, which have seen many produce up to 20 bags per acre from five.

And then later collectively get better prices as they are able to enter into contracts with buyers. Through the group, members can borrow cheaply and buy farm inputs where necessary.

During the 2017 – 2018 season, the group was one of the five smallholder farmer groups that delivered 210,000 bags of maize to USSL, which is part of the 5,000 metric tonnes that were directly sold to the Kenyan market.

Save for the 2018 – 2019 season which was hit hard by tough climatic conditions, and the current season which has been affected by the Covid-19 pandemic, USSL has reached out to 25 smallholder farmer groups in Tanzania with a total membership of 5,500 with an aim of improving the supply to meet the target of 40,000 metric tonnes that the Kenyan miller needs.

“Our target in the next three seasons is to reach out to 90 smallholder farmer groups, and to be able to support them with necessary farm inputs, buy their produce on contractual basis as we strive to meet the demand in the region,” says Silayo.

In 2020, the entire world knew what it was to be hungry. Millions of people went without enough to eat, with the most desperate now facing famine. At the same time, isolation took on a new meaning, in which the lonely and most remote were deprived of human contact when they most needed it, while the many victims of Covid-19 were starved of air. For all of us, the human experience fell far short of satisfying even the most basic needs.

The pandemic has provided a taste of a future at the limits of existence, where people are bereft, governments are stymied and economies wither. But it has also fuelled an unprecedented global appetite for change to prevent this from becoming our long-term reality.

For all the obstacles and challenges we face in the weeks and months ahead, I start 2021 with a tremendous sense of optimism and hope that the growling in our stomachs and the yearning in our hearts can become the collective roar of defiance, of determination and of revolution to make this year better than last, and the future brighter than the past.

It starts with food, the most primal form of sustenance. It is food that determines the health and prospects of 1.35-billion Africans and counting. It is food that employs more than half a billion people in African agriculture alone and offers the promise of economic growth and development. And it is food that we have learned impacts our very ecosystems, down to the air we breathe, the water we drink, and the climate we enjoy, come rain or shine.

Even before the pandemic, 2021 was destined to be a “super-year” for food, a year in which food production, consumption and disposal finally received the requisite global attention as the UN convenes the world’s first Food Systems Summit. But with two years’ worth of progress now compressed into the next 12 months, 2021 takes on a renewed significance.

After a year of global paralysis, caused by the shock of Covid-19, we must channel our anxieties, our fear, our hunger,and most of all our energies into action, and wake up to the fact that by transforming food systems to be healthier, more sustainable and inclusive, we can recover from the pandemic and limit the impact of future crises.

The change we need will require all of us to think and act differently because every one of us has a stake and a role in functioning food systems. But now, more than ever, we must look to our national leaders to chart the path forward by uniting farmers, producers, scientists, hauliers, grocers, and consumers, listening to their difficulties and insights, and pledging to improve each aspect of the food system for the betterment of all.

Policymakers must listen to Africa’s 450-million smallholders as custodians of the resources that produce so much of our food, and align their needs and challenges with the perspectives of environmentalists and entrepreneurs, chefs and restaurant owners, doctors and nutritionists to develop national commitments.

We enter 2021 with wind in our sails. More than 50 countries have joined the African Union in engaging with the Food Systems Summit and its five priority pillars, or action tracks, which cut across nutrition, poverty, climate change, resilience and sustainability. And more than two dozen countries have appointed a national convenor to host a series of country-level dialogues in the months ahead, a process that will underpin the summit and set the agenda for the decade of action to 2030.

But this is just the beginning. With utmost urgency, I call on all UN Member States to join this global movement for a better, more fulfilling future, starting with the transformation of food systems. I urge governments to provide the platform that opens a conversation and guides countries towards tangible, concrete change. And I encourage everyone with fire in their bellies to get involved with the Food Systems Summit process this year and start the journey of transitioning to more inclusive and sustainable food systems.

The Summit is a “People’s Summit” for everyone, and its success relies on everyone everywhere getting involved through participating in action track surveys, joining the online summit community, and signing up to become food systems heroes who are committed to improving food systems in their own communities and constituencies.

Too often, we say it is time to act and make a difference, then continue as before. But it would be unforgivable if the world was allowed to forget the lessons of the pandemic in our desperation to return to normal life. All the writing on the wall suggests that our food systems need reform now. Humanity is hungry for this change. It is time to sate our appetite.

Fall Armyworm (FAW) has been ravaging maize fields in Africa since 2016 with the first incidences reported in Southern Africa countries. In East Africa, it was first reported in western Kenya by farmers in March 2017 and immediately confirmed by the Kenya Plant Health Inspectorate Service and Kenya Agricultural and Livestock Research Organisation.

It immediately spread to the neighbouring countries of Uganda, Burundi, Ethiopia and Rwanda raising alarm amongst policy makers.
In Uganda, the Ministry of Agriculture advised farmers to use Rocket to spray their farms. Towards the end of last year, the incidence of the pest was reducing but it has since sprung and farmers are in a dilemma on what to do next.

Currently, more than 30 countries have identified the pest within their borders including the island countries of Cape Verde, Madagascar, São Tomé and Príncipe and the Seychelles. FAW type introduced into Africa is the haplotype originating from south Florida, USA and the Caribbean.
However, scientists at the National Crops Resources Research Institute (NaCRRI) have since had various concreted efforts in trying to devise means to control FAW.

This time the team led by Dr Michael Hilary Otim, under a Development and Promotional Sustainable Fall Armyworm project which has been ongoing since 2018 ending 2020, have done tremendous work through a project funded by the Alliance for Green Revolution in Africa (AGRA).

Dr Otim explains that the pest is capable of feeding on more than 80 different crop species, making it one of the most damaging crop pests. Some of the crops include maize, sorghum, rice, sugarcane, cabbage, groundnut, soybean, onion, cotton, pasture grasses, millets, tomato, potato and cotton.

He noted that: “The goal of the project was for scientists to contribute to enhanced sustainable control of FAW in Uganda, and other neighbouring countries that would benefit from our results. As well as evaluate additional effective, insecticides for managing FAW and to determine the yield losses associated with FAW infestation,” he notes.

How FAW behaves
The FAW moths have both a migratory habit and a more localised dispersal habit. It can migrate more than 500 km before positioning to settle in one place. When the wind pattern is right, moths can move much larger distances of 1,600 km. The pest is capable of persisting throughout the year.
The Director General of National Agricultural Research Organistaion, Ambrose Agona, explains some of the long- and short-term measures farmers in Uganda can adopt in a bid to prevent the pest from infesting their fields.

Armyworm species
There are a number of species of armyworm caterpillars, many with a distinct taste for a particular plant or vegetable. Some will eat anything green. They attack at night and hide in plants and under garden debris during the day.
They attack the crop at their larval stage sometimes moving in masses to new areas in search of food. In Uganda the attack is mostly aerial, with the gray moths usually arriving under cover of darkness to lay eggs on leaves of maize in farmer fields.

Using sex pheromone traps
Farmers have been advised to erect pheromone traps near fields to trap adult male moths. A pheromone is a chemical secreted by a female insect to attract males for mating and once the male insects are trapped in the bucket there is no more possibility of mating.

It is important to establish it in one month before planting the crop and the trap is placed next to the maize field so that the scent of the pheromone is carried across the top of the plants by the wind and they should be hanged on poles. It is replaced every

Use of natural predators
Farmers are advised to avoid using harmful pesticides or practices that would inadvertently destroy beneficial insects. Some bird species, especially soldier birds are good at consuming the fall armyworm and farmers are advised not to scare away birds seen in search of pests in their farms.

Farmers are expected to spray the field with insecticides such as Garden Dust, Monterey Garden and Rocket. They must use selective and biological pesticide containing Bacillus thuringiensis to control leaf eating caterpillars and FAW.
FAW in tropical climates completes its life cycle in 30-40 days and farmers are expected to avoid treating successive generations of the pest with the same active ingredient.

Other preventive methods
Farmers have been sensitised to use natural horticultural oil spray, an example is multipurpose neem oil spray at various stages of larvae growth.
The head of cereal research at NaCRRI, Dr Jimmy Lamo, noted that there were many donors who have been funding fall army preventive measures at the institute including AGRA.

Challenges
Dr Otim identified the challenges faced during implementation of the project as Covid-19 which reduced outreach, destruction of experiment by animals and termites, delayed report approval and disbursement, drought andflooding
Fall Armyworm strains having mutations for resistance to organophosphates and pyrethroids, among others.

Naro Deputy Director General, Agriculture Technology Promotion, Dr Sadik Kassim noted that it is important for agricultural scientists to tackle challenges farmers are faced with such as FAW. This he said therefore calls for more scientists to be trained in the area of entomology in order to tackle the challenge of pests and diseases.

Tactics

Approaches
Reviews to identify candidate insecticides.

Laboratory and field evaluations (insecticides and yield loss studies).

Training of stakeholders and developing of training materials in local languages.

The team identified 20 insecticides and evaluated seven insecticides including; (Chlobenzo, Striker, Roket, Dimethoate, Amdocs, Nomax and Tihan) for FAW control.

Tanzania Daily News (Dar es Salaam)

By Yasinta Amos in Arusha

AS the country ushers into New Year 2021 more than 100,600 smallholder farmers in the country will be receiving grain and vegetable seeds’ grants worth US$ 493,500 to assist them in sustainable food production.

Through its new “Better Farms, Better Lives” initiative, Bayer, a life-science oriented multinational company will run the programme for the next 12 months, starting this month and it will cover 25 districts in the Mainland Tanzania.

Bayer will complement its current commitment of supporting smallholder farmers in Africa, by providing them with free hybrid corn and vegetable seeds.

The boost, according to Bayer Tanzania Manager Frank Wenga, is meant to assist them to combat effects of global Covid- 19 pandemic, which caused series of global food shortage crisis in the previous year.

“Smallholder farmers are essential in providing food security to billions of people, but the on-going Covid-19 pandemic is placing extra challenges on their ability to produce food for their communities and beyond,” said Liam Condon, President of Bayer’s Crop Science Division.

Also targeting to assist more than 700,000 small scale farmers across the African continent, Bayer’s ‘Better Farms, Better Lives,’ programme also aims at providing assistance with market access to the growers in line with Bayer’s overall aspiration in building a world, where there is ‘Health for All, Hunger for None’.

This special food security programme was launched at Bayer Life Science Tanzania offices in Njiro, Arusha by the Executive Director of the Tanzania Seed Trade Association Bob Shuma.

The programme, though flagged off in Arusha, will be implemented in eight countries across the continent, including, Kenya, South Africa, Tanzania, Nigeria, Zambia, Zimbabwe, Malawi and Zimbabwe.

The initiative focuses on providing smallholder farmers with the assistance needed to address the additional challenges they may be facing as a result of the coronavirus pandemic.

To ensure maximum impact, Bayer will work and expand its partnerships with governments, recognised NGOs and local organisations; to provide accelerated access to agronomy services and knowledge; scale up existing and new value chain partnerships and further expand value chain partnerships across Africa.

“In line with our vision ‘Health for All, Hunger for None’, Bayer is focusing on providing smallholder farmers with the help they need to address immediate challenges, while building resilience for the future, and working to ensure the Covid-19 pandemic does not turn from a health crisis to a hunger crisis,” noted Klaus Eckstein, Head of Africa, Crop Science Division.

In Tanzania, Bayer will collaborate with Alliance for Green Revolution in Africa (AGRA) and with the Agriculture Council of Tanzania (ACT) to distribute 200 metric tonnes of Bayer’s Dekalb corn and 100 gramme of Seminis vegetables seeds brand all valued at US $493,500 to 25 districts among them Meru, Songea, Iringa and Kondoa.

“Together with partners, we aim to multiply the social and economic impacts of smallholder farmers in tackling poverty and hunger, improving health and livelihoods and, ultimately, spurring economic development for their families, communities and nations,” added Bayer East Africa Limited Managing Director, Laurent Perrier.

Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition.

Its products and services are designed to benefit people by supporting efforts to overcome the major challenges presented by a growing and aging global population.

At the same time, the group aims at increasing its earning power and creating value through innovation and growth.

Bayer is committed to the principles of sustainable development, and the Bayer brand stands for trust, reliability and quality throughout the world.

In fiscal year 2019, the group employed around 104,000 people and had sales of 43.5 billion euros. Capital expenditures amounted to 2.9 billion euros, research and development expenses to 5.3 billion euros.

This article is part of the The Davos Agenda

• In the wake of the COVID-19 pandemic, small businesses in least developed countries (LDCs) are seeing revenues plummet and are struggling to access financing.
• Many LDCs depend on foreign aid, and are fearful that cuts to aid budgets will further set back their economic development.
• It’s crucial that aid funding is spent as effectively as possible to attract more private investment to LDC small businesses.
• The private sector is ready. Funds such as the SDG500 are already supporting small businesses in LDCs to remain afloat.

Small businesses in the world’s least developed countries (LDCs) are facing enormous challenges. Many have been left cash-strapped due to plummeting revenues during national and global COVID-19 lockdowns. Banks and other financiers have slashed lending at a time when small businesses need it most. And other forms of finance and credit are thin on the ground, making it nearly impossible for them to grow and build financial resilience.

For decades, many small businesses in LDCs have depended heavily on official development assistance, or aid. Aid has enabled entrepreneurs to take their businesses online, access new markets, meet export standards, and much more. The growth of small businesses in LDCs, and the level of employment that has created for women and youth in particular, has been a crucial part of sustainable development.

However, COVID-19 is already impacting how and where aid is spent. Several government donors have reprogrammed their aid budgets to fund immediate and urgent health priorities and humanitarian assistance in 2020. And this doesn’t look like it will change in the short term. Despite international organizations calling on governments to maintain aid budgets in 2021, fears are spreading that governments are planning to slash billions from their aid budgets.

Amid this uncertain and concerning economic climate, it’s crucial to ensure that aid is spent in a way that attracts private sector investment and ultimately makes funds go further.

Blended finance offers hope for small businesses

Between 2012 and 2018, investments made by governments using aid funding encouraged the private sector to invest $13.4 billion in LDCs. This is also known as blended finance – when a government or philanthropic institution makes an initial investment to get a project off the ground, even if that means accepting larger risks or lower returns. This innovative financing approach makes a project more attractive to private investors who seek higher financial returns but require lower risk, which is particularly important in LDCs where investment risks are high and numerous.

Blended finance is already providing small businesses in LDCs with short-term solutions, such as desperately needed cash to pay suppliers during COVID-19. Blended finance is also helping LDC governments access sufficient funding to respond to short-term challenges, like trade finance for supplies, or working capital to keep businesses afloat.

But what blended finance offers that other financial instruments don’t is access to long-term significant investment. Because blended finance uses aid to provide investors with safeguards against financial risks, it’s able to attract interest from institutional investors, such as pension funds and insurance companies that would not otherwise invest in LDCs.

Initiatives such as the SDG500 launched at the 2020 World Economic Forum Annual Meeting have been pioneering blended finance instruments in LDCs. Take the Agri-Business Capital Fund (ABC Fund), one of the six funds under SDG500. The Fund aims to mobilize €200 million from public and private investors; for every dollar of aid assistance or public funds used, an additional $2.50 is invested by the private sector in the SDG500 funds. Public investors in the ABC Fund already include the EU; the Organization of African, Caribbean and Pacific States; the Luxembourg Government; the Alliance for a Green Revolution in Africa; and the Swiss Development Cooperation.

During COVID-19, The ABC Fund has made two new investments to support smallholder farmers. It provided much-needed loans worth €1.2 million to two small businesses – Anatrans, a cashew nut processor based in Burkina Faso, and Maphlix, a Ghanaian producer and processor of tubers and vegetables.

This financing has enabled both businesses to continue paying farmers and suppliers, as well as purchase equipment to introduce physical distancing measures in their operations. Enabling businesses like these to continue their operations and grow their businesses, even during tough times, is what is needed to help them build financial resilience.

However, these examples are not the norm. Before the pandemic, only 6% of private finance mobilized by aid benefitted LDCs. And these private finance deals are smaller in LDCs, compared even to other developing countries.

Making blended finance work for the countries that need it most

Increasing private investment in LDCs will require a multi-pronged approach. De-risking efforts, such as the ones offered by blended finance, are important but that alone will not attract sufficient investment.

In our conversations with private finance actors, we hear that they are struggling to secure the aid assistance needed for blended finance to work at scale, and we know that COVID-19 will exacerbate this.

Governments providing aid need to “walk the talk” and find creative solutions to take the much-needed risk themselves for private sector to follow. This could mean taking more risk when assessing real or perceived risks as they prioritize aid budgets, as well as increasing support for blended finance tools that support LDCs. It also means supporting LDC governments to lead and take ownership of the opportunities brought by blended finance.

LDC governments also have an important role to play, by doing what they can to create a strong investment climate in their countries. This includes removing hurdles that are discouraging investors, such as unnecessary screening mechanisms, business registration processes, licensing processes, and lack of protections for foreign investors. They also need to build the capabilities of small businesses to ultimately make it more attractive for blended finance investments to flow. It will be important to continue technical assistance offered through aid programmes to help small businesses strengthen their financial practices, improve operational efficiency, and promote adherence to environmental, social, and governance standards.

It’s clear that if aid budgets are cut, LDCs and the small businesses that are the backbone of local economies and livelihoods, will undoubtedly suffer the most. Developments in blended finance during COVID-19 provide hope that we are heading in the right direction. It is not too late to use aid to attract private investment to flow into the world’s poorest countries – but the time to act is now.