LUSAKA, 17 July 2022 – At the margins of the 4th Mid-year Coordination Meeting of the African Union taking place in Lusaka, Zambia, the African Continental Free Trade Area (AfCFTA) Secretariat, Afreximbank and World Food Programme (WFP) have signed a three-year memorandum of understanding (MoU) to disburse US$2 billion in farming loans and credit lines for agro-processors and commodity traders by 2025 through Afreximbank lending instruments and blended finance facilities in support of AfCFTA Agreement and in contribution to addressing food security on the continent.
The MoU seeks to promote commercial development of smallholder agriculture and facilitate intra-regional agricultural trade initiatives, advance climate change mitigation and adaptation of smallholder agriculture and related value chains. As part of the financing component, Afreximbank will deploy adequate financing, lines of credit, supply chain financing, guarantees, among others, to support smallholder productive activities including development of post-harvest storage facilities, agro-processing and trade in commodities and value-added products. Further, Afreximbank will support the development of industrial projects, including export-oriented agricultural hubs and Special Economic Zones (SEZs), to support value addition in smallholder agricultural chains. Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank highlighted that, “The MoU which has just been signed is focusing on building the productive capacity of smallholder and commercial farmers, supporting development of agro-processing – including nutritional fortification – and agro-export industries, availing climate change mitigation as well as promoting intra-regional agricultural trade and investments to enhance the resilience of the agriculture sector in Africa, leveraging Afreximbank’ various programmes, facilities and capabilities, working with our Partners – AfCFTA Secretariat and WFP”.
WFP Executive Director, David Beasley, who signed the agreement in advance of the Coordination Meeting, accentuates that collaboration is key to achieving Zero Hunger and that international financial institutions, development organizations and the private sector have a critical role to play in achieving that goal. In addition to financing, the world needs their technical know-how, innovative spirit and entrepreneurial flair, which when paired with WFP’s in-country operational presence, and its experience working with smallholder farmers and other agricultural value-chain actors, should deliver transformation of the continent’s food security outlook. WFP undertakes to provide training and technical support to smallholder farmers, facilitate the organization of smallholder farming in cooperatives, provide training and support for post-harvest management, including working with the private sector to develop post-harvest storage facilities. It will also help with access to markets, in part through its Home-Grown School Meals programme. In addition, WFP will support market and trade development by purchasing grains, pulses, and food products based on the produce of smallholder farmers for use in its food assistance programmes.
The AfCFTA Secretariat, working with the Regional Economic Communities (RECs) and its State Parties undertakes to promote simplified market access programmes and customs procedures for agricultural products for enhanced agriculture trade and food security, as well as the development of agriculture based regional value chains. H.E. Wamkele Mene, Secretary-General of the AfCFTA Secretariat emphasizes that “The key to delivering impact and economic recovery in the post-pandemic world will be to engage with stakeholders from across the private and public sector, and from across all corners of the continent to ensure an inclusive approach to implementing the AfCFTA. In signing this MoU, our goal is to improve the livelihoods of African people, support rural economies and ensure food security through agro-processing”
——
ABOUT THE PARTIES
The African Continental Free Trade Area (AfCFTA) is one of the flagship projects of Agenda 2063: The Africa We Want and entered into force on 30 May 2019. It is a high ambition trade agreement, which aims to bring together all 55 member states of the African Union, covering a market of more than 1.3 billion people, with a comprehensive scope that includes critical areas of Africa’s economy, such as digital trade and investment protection, amongst other areas. By eliminating barriers to trade in Africa, the objective of the AfCFTA is to significantly boost intra-Africa trade, particularly trade in value-added production and trade across all services sectors of Africa’s economy.
For more info: https://au-afcfta.org
Follow AfCFTA Secretariat on Twitter | Facebook | LinkedIn | Instagram
AfCFTA Secretariat Contacts:
Grace Khoza | Grace.Khoza@au-afcfta.org
Elydora Matubanzila | Elydora.Matubanzila@au-afcfta.org
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in effectively participating in the AfCFTA. At the end of 2021, the Bank’s total assets and guarantees stood at about US$25 billion, and its shareholder funds amounted to US$4 billion. Afreximbank disbursed more than US$51 billion between 2016 and 2021. The Bank has ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). The Bank is headquartered in Cairo, Egypt.
For more info: https://afreximbank.com
Follow Afreximbank on Twitter | Facebook | LinkedIn | Instagram
Afreximbank contacts:
Amadou Labba Sall | asall@afreximbank.com
The United Nations World Food Programme is a multilateral humanitarian-development organization established in 1961 as an autonomous joint subsidiary programme of the United Nations and the Food and Agricultural Organization. The World Food Programme (WFP) is the world’s largest humanitarian organization saving lives in emergencies through delivering food assistance and changing lives by working with communities to improve nutrition and build resilience.
For more info: https://wfp.org
Follow WFP on Twitter | Facebook | LinkedIn | Instagram
WFP Contacts:
WFP Global Media Team wfp.media@wfp.org
Gerald Bourke | gerald.bourke@wfp.org
Martin PENNER | martin.penner@wfp.org