DEPUTY ADMINISTRATOR ISOBEL COLEMAN: Thank you, Sam [Kimera]. Thank you all for being here today. I think we can agree that we had two great panels with so many different sector leaders coming together to underscore for us both the urgency and the opportunity before us.
As many of you here know, in response to the 2008 food crisis, USAID launched America’s most ambitious global hunger and food security initiative, Feed the Future, to equip countries to tackle the root causes of food insecurity and malnutrition.
Since 2010, Feed the Future investments have unlocked close to five billion dollars in agricultural financing, leveraged more than two and a half billion dollars private sector investment in food security, and generated more than $18 billion in sales for smallholder farmers.
Alongside partners, many of who are in the room today, we have lifted millions out of hunger and poverty.
But almost a decade-and-a-half later, we are confronting, once again, new challenges including COVID, climate change, inflation, and Putin’s war in Ukraine.
While these shocks have set back more than a decade of progress, many of Feed the Future’s long-term investments have proved adaptable, responding to present challenges while still investing to feed the future.
Even as we have distributed the seeds, shared new technologies, and brought financial and mobile services to those hardest hit by the shocks, we have been putting more resources toward the small agricultural businesses that allow farmers to transport, store, process, and sell their harvests.
These SMEs are the backbone of African food systems – they are, together, the largest employer in Africa, and the key to spurring economic growth and transforming subsistence agriculture into a more productive, resilient sector.
Yet, fully 75 percent of African SMEs do not have access to formal bank finance.
This represents a significant portion of the $100 billion financing gap we’ve heard about so many times today.
The financing gap is particularly acute for women – despite growing evidence that closing gender gaps in agriculture is a critical pathway to ending global hunger.
The land productivity gap between women- and men-managed farms is still at a stubborn 24 percent.
It is critical that we reset the incentive structure for financing agribusiness across the continent.
That’s why we’re here today. The Deal Room is a strong example of the momentum that we can harness to facilitate partnerships and investments in African agriculture.
As we have heard, powerfully, from our panelists today, it provides companies with the opportunity to access finance, mentorship, and market entry solutions to support their growth objectives.
It also creates opportunities for governments to present investment opportunities, create incentives, and engage with interested investors.
Since 2018, over $2 billion worth of financial transactions have been negotiated among 600 enterprises and 110 investors through the Deal Room. And I know we will continue to see momentum like this, this week.
Origen Fresh is one example of how the Deal Room model has created transformative opportunities – not just for a women-owned agri-SME, but also for her Kenyan community.
Origen Fresh produces fresh fruits and 100 percent natural oils, extracted using production methods that retain all the essential nutrients. Moreover, its company mission focuses on empowering women and youth in the sourcing and supply chain. With $7 million in financing, facilitated by the Deal Room, Origen Fresh has grown to support more than 50,000 small-scale farmers, purchasing fruits and nuts to produce and export quality oils around the world.
The resilience and growth of Africa’s food systems depends on increased investment in Agri-SMEs – particularly women-led businesses such as Origen Fresh.
That’s why, through USAID’s partnership with AGRA, I am pleased to announce a $4 million investment into Africa’s first women in agribusiness digital marketplace, called VALUE4HER.
VALUE4HER is a network and a marketplace of opportunity for women-led agribusinesses, improving their visibility; sparking the connections that lead to deals with potential partners.
It is often said that the agriculture sector is too risky for lending, it’s too risky to be profitable. I know that no one in this room agrees with that.
Through networking and engaging in ventures like VALUE4HER and the Deal Room, lenders, investors, and agri-SMEs are learning how to both navigate risks and realize the potential of the agriculture sector.
As I mentioned, USAID is increasing its focus on agri-SMEs in sub-Saharan Africa – including through blended finance and de-risking investments. Our work with Aceli Africa is another such model.
Much like the Deal Room, Aceli is aligning capital supply with market demand to mobilize $700 million dollars in lending to Agri-SMEs, creating a more sustainable and competitive marketplace.
USAID’s $10 million investment has leveraged another $62 million dollars from donors, including the Dutch Ministry of Foreign Affairs; the UK’s Foreign, Commonwealth, and Development Office; the IKEA Foundation; and the Swiss Agency for Development and Cooperation.
In 2021, a woman-owned coffee enterprise in Rwanda received its first formal loan of $100,000 from a lender supported by Aceli’s financial incentives.
The loan enabled the entrepreneur to improve production on her own coffee farm, and to purchase goods from over a thousand other farmers, and hire nine employees.
Within a year, the business increased revenues by 60 percent, more than doubled its coffee purchases from farmers, repaid its loan, and accessed a new loan of $150,000.
Ventures like Aceli and the Deal Room have the potential to secure urgently needed investments in the “hidden middle” of agri-food value chains – the slice of the industry that, while fundamental, is often overlooked in policy and investment discussions.
They are the agricultural traders, the farm and food service providers, agro-processors, and urban retailers – the entrepreneurs who connect farms to points of purchase.
Greater investment in the “hidden middle” will reduce poverty, provide new and better income opportunities for smallholder farmers, spur economic growth, strengthen food systems, increase global food supplies, and enhance resilience to shocks.
This is what we have learned through decades of progress and setbacks. And contrary to perceptions, agribusinesses across Africa are ready and able to absorb more financing.
But others must join – as we’ve done with Feed the Future – and adapt to the changing needs of the industry; boost engagement with small and medium enterprises, including the local, formal financial sector; direct more resources to women-led organizations; and above all, listen to the voices of local actors.
African food systems are poised for transformation, and I look forward to seeing many more exciting achievements emerging from the Deal Room this week and beyond.
Thank you so much.