NAIROBI, Kenya, May 25 — Canada has announced a contribution of 100 million Canadian dollars to the African Development Bank (AfDB) to support the growth of Agricultural small- and medium-sized enterprises (agri-SMEs) in Africa particularly those run by or benefitting women.
In an exclusive interview with Capital FM News on Tuesday, Harjit Sajjan, Minister for International Development and Minister for the Pacific Economic Development, said that the funding will go a long way in strengthening the food security of African countries including Kenya in the wake of global food supply disruption.
Sajjan, who begun a tour of three East African countries in Rwanda on Saturday, noted that Africa’s agri-SMEs are dynamic but face challenges in accessing finance for growth and expansion adding that the financial support will play a key role in addressing some of the challenges.
“We want to help small and medium size entrepreneurs, especially with a focus on food for women as well because we know that when women have the opportunity in agriculture there is a significant positive impact,” he said.
He stated that AfDB will be able to determine for themselves how they will spend the money noting it has the necessary expertise and networks to leverage the opportunity.
Though Sajjan could not specify the number of countries targeted under the funding, Sajjan said the decision rests on AfDB.
He added that food security is currently a serious issue in the horn of Africa noting that Africa has the skills set and knowledge to be self-reliant in terms of food production and be an economic powerhouse by tapping into the agriculture sector.
“That is why these 100 million dollars will go a long way in providing the support, I am here to ask the same questions to government officials as well, what are their plans, and how we can better support initiatives to increase food production, water management and let us not forget, when we do good agriculture, it is also better for the environment as well,” he added.
Sajjan partly blamed the current food crises in the region on the ongoing Russia-Ukraine war which he said has made it difficult for exports and imports from Ukraine.
“The grain in Odessa right now can’t get out. It is because of his (Vladmir Putin) actions, and he is not allowing that grain to go out. Ukraine does help to feed the world, and if that grain doesn’t go out it is going to make it difficult for us but nonetheless, Canada and the rest of other nations are going to come together to provide their support,” Sajjan said.
He added that Canada’s focus in their relationship with Kenya is ensuring that Kenya has the right tools and support in efforts to improve food production which he said will benefit the region
The funding for this initiative comes from the International Assistance Innovation Program, which helps accelerate private sector development that contributes to the Sustainable Development Goals (SDGs).
Canada is seeking to mobilize up to 200 million Canadian dollars in additional financing from public and private sources to support the initiative.
A recent report published by the Commercial Agriculture for Smallholders and Agribusiness (CASA) program titled ‘The state of the agri-SME sector– Bridging the finance gap’ estimates demand for financing, from around 220,000 agri-business SMEs in sub–Saharan Africa and Southeast Asia.
“However, we estimate that only USD 54 billion (34%) is currently being met through formal finance channels—leaving an annual financing gap of USD 106 billion,” the report said in part.
At a regional level, the annual financing gap is USD74 billion for 130,000 agri-SMEs in sub-Saharan Africa and USD31 billion for 90,000 agri-SMEs in South Asia, according to the report