IFAD President on transforming African agriculture

The President of the International Fund for Agricultural Development (IFAD), Alvaro Lario, emphasized the importance of public development banks in investing in agriculture during the 2021 Forum for African Development Finance Institutions (FIX). Lario highlighted that these banks represent a significant portion of global investment, with up to 10% of the world's GDP dispensed through them. He underscored the need to convene stakeholders to focus on investing across the agriculture value chain, bringing together over 140 institutions to drive transformation in the sector. Lario pointed out the challenges in funding agriculture, stating that official development assistance constitutes only a small fraction of global investment, making it difficult to achieve the desired transformation. In Africa, governments invest an average of just 3% of their GDP in agriculture and food systems, highlighting the need for more actors to mobilize support. Lario discussed strategies to mobilize private sector investment, including guarantees, de-risking, and blending, to catalyze agricultural development. Amid a complex global environment marked by geopolitical fragmentation and aid suspensions, Lario stressed the importance of African solutions. He highlighted efforts to mobilize local institutions and actors, such as African public development banks and financial institutions, to mitigate risks and leverage existing funding. Lario emphasized the significance of regional trade and agro-processing to boost income and job creation within the continent. The MOU signed between IFAD and the Development Bank of South Africa aims to collaborate on mobilizing climate finance and addressing water challenges across multiple countries. The partnership will focus on leveraging the Development Bank of South Africa's expertise in large-scale infrastructure projects and catalyzing private sector engagement in initiatives like the market creation for rice farmers in Eswatini. In conclusion, Lario expressed optimism about the potential for African agricultural development, highlighting the importance of political will, leadership, and effective funding mechanisms to drive transformation in the sector.