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In developing countries, and particularly in Africa, farmers, processors and other actors in agri-food systems struggle to access the financial resources needed to accelerate progress toward the SDGs and to increase resilience to global shocks. There is growing recognition that overseas development assistance (ODA) will not meet the USD 2.5 trillion funding gap needed in developing countries, and that massive private-sector investments will be required. Against this background, the Food and Agriculture Organization of the United Nations (FAO) deepened its work for attracting and de-risking private-sector investments in agri-food systems, targeting public and private agricultural value chains actors as well as private investors, and piloting its interventions in six African countries.

Part of this efforts has fallen under the FAO project “AgrInvest-Food systems” that for more three years has worked to foster SDG-aligned investments in agri-food systems in Burkina Faso, Ethiopia, Kenya and Niger contributing to sustainable economic growth and boost rural employment, particularly for women and youths.

The project, that reached its closure in June 2022, benefitted from USD 2.5 million as financial support from the Government of Italy.

The logic behind the project’s structure was to start with assessing the food systems of the four countries and select promising value chains (VC) with a high sustainability potential. For example, in Niger onion has been identified as promising value chain for sustainable investments to help transform the food systems in the country, given their market potential and importance for social, economic and environmental sustainability. Onion production is an important business for the country, occupying a significant part of the agricultural sector. It represents a source of income for smallholders and it is mainly carried out by women. Moreover, with conservation onions - which are produced in a more ecologically-friendly way and can be stored for longer periods of time - sustainability aspects can be more effectively addressed.

At the same time, different VC stakeholders were brought together to establish frameworks for action and identify investment opportunities in the selected VCs. During this process, the project has also worked to identify the most successful and effective instruments, tools and best practices for leveraging private and direct foreign investments, building partnerships with similar existing initiatives. In Kenya, the FAO AgrInvest-FS project has supported Kisumu County through Kisumu Lakefront Development Corporation (KLDC) to mobilize investment into aquaculture by engaging indigenous fish entrepreneurs and the community through a Public Private Community Partnership (PPCP). The partnership is working to initially raise USD 1 million to kick-start the process using a special purpose vehicle (SPV). The SPV is a joint owned company that will incorporate out-growers (the Community) in the business model.

Meanwhile, the project worked with the stakeholders to develop customized guidelines for SDG-compliant investments, which are now available here: https://www.fao.org/documents/card/en/c/cc0451en. Due to the increasing demand for dairy products and low supply of dairy products, foreign investors see a business opportunity in investing in the dairy value chain in Ethiopia. The guidelines developed under the project can support the uptake of SDG investment guidelines so that diaspora and foreign companies in Ethiopia could improve their ability to address those types of challenges around SDG assessment and management of impacts.  

The project worked also to develop innovative market arrangements and facilitating access to information for investors and financial institutions. In Kenya, FAO identified an agri-food processor – Mace Foods and facilitated engagement with a rural women group, the Nyamira North Women Sacco a cooperative producing indigenous vegetables. With the support of FAO the women’s cooperative has been growing the vegetables under contract arrangement for the first time. On the other hand, the project supported the agri-food processor to develop a financial proposal for a development facility fund, which was awarded with USD 0.5 million grant to increase its business operations.

In the following stage, the established/reinforced frameworks worked through their new partnerships and arrangements, to formulate proposals for financing and for the adoption of policy changes, to enable a more investment-conducive environment. In Burkina Faso, after identifying rice as a promising value chain where increased investments could significantly support improved food system outcomes, the project provided first technical assistance to rice processors to develop participatory business plans, then it organized business to business meetings where financial institutions met the supported value chain actors and analyzed their investment proposals. As a result, several rice entrepreneurs started a financial collaboration with the selected institutions.

To capitalize on the lessons learned over its implementation, the project took stock of the achievements and results and developed normative and technical documents which could be found at: https://www.fao.org/in-action/agrinvest-food-systems/en/ enabling global dissemination and circulation, for scaling-up and replication.