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Monday, May 27, 2024

Isobel Coleman’s Remarks at the Opening of the Deal Room during the Africa Food Systems Forum 2023

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In her address at the opening of the Deal Room during the Africa Food Systems Forum 2023, Deputy Administrator Isobel Coleman expressed gratitude to Sam Kimera and all attendees for their presence. She recognized the significance of the diverse sector leaders’ discussions on the pressing issues and opportunities that lie ahead.

Deputy Administrator Coleman began by highlighting USAID’s Feed the Future initiative, launched in response to the 2008 food crisis. This ambitious global hunger and food security program has since made substantial strides, unlocking billions in agricultural financing, leveraging private sector investments, and generating substantial sales for smallholder farmers. With the support of partners, many of whom were present at the event, Feed the Future has successfully lifted millions out of hunger and poverty.

Despite these achievements, new challenges have emerged, including the COVID-19 pandemic, climate change, inflation, and the conflict in Ukraine. These setbacks have threatened the progress made over the past decade. However, Feed the Future’s long-term investments have proven adaptable in responding to these challenges while maintaining a focus on securing the future.

Deputy Administrator Coleman emphasized the pivotal role of small and medium-sized enterprises (SMEs) in African food systems, highlighting that they are the largest employers in Africa and key drivers of economic growth. However, a staggering 75 percent of African SMEs lack access to formal bank finance, contributing to the $100 billion financing gap discussed during the forum.

This financing gap disproportionately affects women, despite evidence indicating that closing gender gaps in agriculture is crucial for ending global hunger. The productivity gap between women- and men-managed farms remains at 24 percent, underscoring the need to redefine the financing structure for agribusiness in Africa.

The Deal Room, Deputy Administrator Coleman explained, represents a powerful platform for facilitating partnerships and investments in African agriculture. Over $2 billion in financial transactions have been negotiated among 600 enterprises and 110 investors since 2018 through this initiative, showcasing its potential for further success.

Deputy Administrator Coleman shared the inspiring success story of Origen Fresh, a women-owned agri-SME empowered by the Deal Room, which has positively impacted its Kenyan community and supported over 50,000 small-scale farmers.

Recognizing the importance of increased investment in Agri-SMEs, particularly those led by women, USAID announced a $4 million investment into VALUE4HER, Africa’s first women in agribusiness digital marketplace. VALUE4HER aims to improve visibility, facilitate connections, and foster deals for women-led agribusinesses.

Deputy Administrator Coleman dispelled the notion that agriculture is too risky for lending and reiterated the importance of initiatives like VALUE4HER and the Deal Room in helping stakeholders navigate risks and unlock the agriculture sector’s potential.

USAID’s focus on agri-SMEs in sub-Saharan Africa includes blended finance and de-risking investments, exemplified by the agency’s partnership with Aceli Africa. Aceli mobilizes $700 million in lending to Agri-SMEs and has garnered substantial support from donors.

The success story of a woman-owned coffee enterprise in Rwanda, supported by Aceli, was shared as evidence of the positive impact such initiatives can have.

Deputy Administrator Coleman stressed that ventures like Aceli and the Deal Room can secure much-needed investments in the “hidden middle” of agri-food value chains. These entities, often overlooked, play a critical role in connecting farms to markets, reducing poverty, creating income opportunities, boosting economic growth, strengthening food systems, and enhancing resilience to shocks.

She concluded by emphasizing the readiness of African agribusinesses to absorb more financing and urged others to join in adapting to industry needs, engaging with SMEs, allocating resources to women-led organizations, and listening to local voices. She expressed optimism for the transformation of African food systems and anticipated more achievements emerging from the Deal Room in the future.

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