The Africa Export-Import Bank (Afreximbank) has reaffirmed its dedication to fostering economic growth on the African continent, particularly through the support of small and medium-sized enterprises (SMEs) engaged in agribusiness. This announcement came as Mrs. Oluranti Doherty, the Managing Director of Export Development at Afreximbank, reiterated the bank’s commitment to scaling up financial support to SMEs during the second edition of the SME Agribusiness Export-Readiness Accelerator Training in Abeokuta, Ogun State, Nigeria.
The four-day training, held at the prestigious Green Legacy Resort within the Olusegun Obasanjo Presidential Library, was attended by over 100 participants from 13 West African countries, including Togo, Benin Republic, Burkina Faso, and Sierra Leone. The event was organized in collaboration with the Africa Leadership Foundation (ALF) and provided a platform for SME operators to enhance their export-readiness and maximize opportunities within the agribusiness value chain.
Scaling Financial Support for SMEs
Mrs. Doherty emphasized Afreximbank’s strategic focus on the agribusiness sector as central to unlocking Africa’s economic potential. With agribusiness contributing to approximately 25% of Africa’s GDP and employing around 60% of the continent’s workforce—mainly in rural areas—the sector remains a critical driver of development. Over the years, there has been a notable surge in demand for African processed agricultural products, particularly among the African diaspora, whose population continues to grow rapidly. African agricultural exports are increasingly seen as high-quality and more sustainable than their Western counterparts, opening new avenues for trade.
To bolster this burgeoning sector, Afreximbank initially provided $148 million to financial intermediaries, including partnering banks, for the benefit of SMEs. However, in light of the growing potential, the bank is preparing to expand this financial support to $310 million before the year ends. This expanded financing is aimed at ensuring that SMEs involved in agricultural exports can access the capital needed to scale their businesses, improve their infrastructure, and meet international demand.
Doherty stated, “For us to truly change the African continent for good, we need to focus on agribusiness. It is the center of strong potential for the development of SMEs, allowing them to capture the full value chain in agricultural exports.”
The Importance of Digitization
As part of Afreximbank’s broader agenda to increase the competitiveness of African businesses on the global stage, Mrs. Doherty urged SME operators to digitize their operations. With digitization, African businesses can connect with international buyers more efficiently, streamline their supply chains, and increase their overall visibility in global markets.
“Technology is a game-changer for SMEs. By digitizing their operations, they can access a wider network of customers, track their exports in real time, and engage in e-commerce activities that transcend geographical boundaries,” she said. The bank has also supported over 2,500 African business operators with training, helping more than 300 of them access free markets through initiatives such as the African Continental Free Trade Area (AfCFTA).
ALF’s Role in Empowering SMEs
Dr. Olumide Ajayi, Executive Director of the Africa Leadership Foundation (ALF), underscored the vital role that SMEs play in Africa’s economic development. Describing them as the “backbone of African economies,” Ajayi emphasized that SMEs drive job creation, innovation, and wealth generation across the continent. He highlighted the importance of equipping these businesses with the skills and knowledge they need to tap into opportunities within the intra-African market.
“Our partnership with Afreximbank is a crucial milestone in our shared vision of fostering sustainable economic growth in Africa,” said Ajayi. “Through this export-readiness accelerator program, we are empowering SMEs to seize the abundant opportunities within Africa and beyond.”
Ajayi also spoke about the significance of expanding the scope of this training initiative, with ALF planning a five-year extension to the program. To broaden regional inclusion and ensure more SMEs benefit, a Memorandum of Understanding (MoU) will be signed between ALF and the Federation of West African Chambers of Commerce during the event. This agreement will bring more SMEs from West Africa into the training, thereby increasing the reach and impact of the program.
Afreximbank’s Broader Commitment to Africa
The Africa Export-Import Bank has long been at the forefront of initiatives to promote African trade and economic development. Afreximbank’s innovative financing solutions, including trade financing, have been pivotal in helping African businesses overcome obstacles related to funding, market access, and export readiness. Through its various programs, the bank has facilitated the participation of African companies in global trade and supported the continent’s broader economic transformation.
Afreximbank’s financing initiatives extend beyond agriculture. The bank is committed to supporting businesses across various sectors, including manufacturing, services, and the creative industries. Through its recently launched Afreximbank Creative Industries Support Fund, the bank has provided targeted financing to African creatives and entrepreneurs, recognizing their role in driving cultural exports and boosting the continent’s global influence.
Importance of Agribusiness to Africa’s Future
Agribusiness is poised to be one of Africa’s key growth sectors in the coming decades. The continent’s vast arable land, favorable climate, and rich natural resources give it a competitive advantage in global agricultural markets. However, for Africa to fully capitalize on this potential, greater investment is needed in infrastructure, logistics, and processing capabilities.
Several studies have highlighted the importance of modernizing Africa’s agricultural sector through technology and innovation. By improving productivity, reducing post-harvest losses, and increasing access to international markets, Africa’s agribusinesses can meet the growing global demand for food and agricultural products. This is particularly important as the world faces increasing challenges related to food security and climate change.
In recent years, the African Development Bank (AfDB) has also been working to boost investments in agribusiness, with its Feed Africa Strategy aiming to eliminate extreme poverty, end hunger, and reduce food imports. Through partnerships with institutions like Afreximbank, these efforts are gaining momentum, providing a solid foundation for sustainable economic growth in Africa.
Supporting Women and Youth in Agribusiness
Another key area of focus for Afreximbank and its partners is the empowerment of women and youth in agribusiness. Women make up the majority of Africa’s agricultural workforce, particularly in smallholder farming, yet they often lack access to resources such as credit, technology, and training. By providing targeted financing and training programs, Afreximbank is working to bridge this gap and ensure that women and young entrepreneurs can thrive in the sector.
Mme Benita Diop, the African Union Special Envoy on Women, Peace, and Security, delivered a goodwill message at the training, highlighting the role of women in transforming African agriculture. “Women are the backbone of Africa’s agricultural economy, and their empowerment is key to achieving food security and sustainable development across the continent,” she said.
Conclusion
The $310 million earmarked by Afreximbank for SMEs represents a significant investment in Africa’s future. As agribusiness continues to grow, both on the continent and internationally, African SMEs are well-positioned to become key players in global trade. By providing financial support, training, and strategic partnerships, Afreximbank is empowering these businesses to compete on the world stage, drive economic growth, and unlock Africa’s vast agricultural potential.
In the coming years, the continued collaboration between Afreximbank, ALF, and other regional partners will be instrumental in transforming Africa’s agribusiness sector and ensuring that SMEs remain at the heart of this transformation. Through targeted interventions, Africa can create a more prosperous, inclusive, and sustainable future for its people.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
17th September, 2024
