African Agriculture Group May Get Islamic Development Bank Loan
The Alliance for a Green Revolution in Africa, a promoter of small-scale farming on the continent, is in talks with the Islamic Development Bank for an $80 million loan, said Namanga Ngongi, the president of the organization.
The funds will be used to develop its projects on the continent and add to financing it has raised from three other lenders, Ngongi said in an interview yesterday from Dar es Salaam, the commercial capital. The Islamic Development Bank funds are expected to be secured this year, he said.
“Approval has already passed management level, and it’s now the board remaining,” he said.
AGRA, as the Nairobi-based organization is known, is funded by the Bill & Melinda Gates Foundation, the Rockefeller Foundation and the U.K.’s Department for International Development. Money raised by the group funds projects in 14 countries including seed breading, buying fertilizers, and processing and marketing produce.
In 2009, Standard Bank Group Ltd., Africa’s biggest lender, said it would provide $100 million in loans over three years to small-scale farmers under AGRA. The alliance has since secured $50 million of funding from Equity Bank Ltd. (EQBNK), Kenya’s largest bank by market value, and $10 million from the National Microfinance Bank of Tanzania Ltd., Ngongi said.
Africa needs to invest as much as $39 billion in agriculture annually to enable the industry to grow at a rate of 6 percent, the amount needed to eliminate food insecurity on the continent, he said. African governments currently allocate about 7.5 percent of their annual budgets to food production.
Since its inception four year ago, AGRA has helped start and support 42 seed companies expected to produce 40,000 metric tons of seeds this year from 25,000 tons last year, according to Ngongi.
“We expect that by 2018, 250,000 tons of seeds will be produced, able to plant 10 million hectares,” he said.
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