Norway and the United States, through the U.S. Agency for International Development (USAID), have announced that the United Kingdom and the Republic of Korea will join them as partners in the Financing Agricultural Small-and-Medium Enterprises (SMEs) in Africa (FASA) Fund. This multi-donor initiative aims to mobilize $200 million in support of agri-SMEs across the continent.
The United Kingdom has pledged an initial £7 million ($9 million), adding to the $70 million already committed by USAID and the Government of Norway. These new contributions mark a significant step toward closing the financing gap for agricultural SMEs in sub-Saharan Africa.
In addition to the new commitments, Norway and USAID have selected Investisseurs & Partenaires (I&P), an impact investment group dedicated to supporting African entrepreneurs, as the fund manager for FASA. The fund’s agricultural and climate partner will be the CGIAR Hub for Sustainable Finance (Impact SF), while the Small Foundation will contribute financially and support the Fund’s learning agenda.
“The launch of this fund marks a pivotal moment for Africa’s agricultural sector,” said USAID Administrator Samantha Power. “With FASA, we aim to support thousands of agri-SMEs, helping them grow their businesses, create jobs, and improve the livelihoods of millions of smallholder farmers.”
Over the next ten years, the FASA Fund is expected to support 1,000 agri-SMEs, create over 70,000 jobs, and benefit more than one million smallholder farmers. Agri-SMEs, which are responsible for supporting 95 percent of smallholder farmers in sub-Saharan Africa, play a critical role in food production, trade, and employment on the continent.
“Africa has two-thirds of the world’s remaining uncultivated arable land, yet is projected to import food worth $110 billion by 2025,” said Norway’s Minister of International Development Anne Beathe Tvinnereim. “This highlights the need for increased local investments in food production, which is exactly what FASA is designed to support. By lowering the risks for private investors, FASA unlocks the potential for transformative change in Africa’s agricultural sector.”
FASA was first announced during the 2023 United Nations General Assembly by USAID and Norway. The Fund aims to address the estimated $100 billion financing gap in sub-Saharan Africa’s agricultural sector by providing catalytic capital that will attract further investments. By reducing the risks associated with investing in agriculture, FASA aims to stimulate business growth and strengthen the agricultural ecosystem across Africa.
This initiative forms part of Feed the Future, a U.S. government program dedicated to tackling global hunger, poverty, and malnutrition, ensuring that agri-SMEs and smallholder farmers have the resources they need to thrive.
