AU Commissioner Calls for Scaled Financing to Transform Africa’s Agriculture

Addis Ababa, March 31, 2026 (ENA) The African Union (AU) Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Environment, Moses Vilakati, has called for urgent and scaled-up financing to transform Africa’s agriculture sector.

Speaking at the second IFC FIG Africa Agri-Finance Client and Partner Conference in Addis Ababa, Vilakati stressed that agriculture remains the backbone of African economies, sustaining livelihoods and ensuring food security across the continent.

However, he warned that the sector is becoming increasingly fragile due to climate-related shocks such as droughts, floods and erratic rainfall. These challenges are further compounded by global supply chain disruptions, rising input costs, limited access to financial services and weak infrastructure.

Vilakati emphasized that building resilience in agriculture must be “financed, engineered and scaled,” noting that traditional lending models are no longer adequate to address emerging risks in the sector.

He called for the expansion of climate-smart financing tools, including credit instruments, index-based insurance, and digital and mobile-enabled financial services. He also highlighted the need for risk-sharing frameworks and blended finance mechanisms, alongside warehouse and value-chain financing systems to improve access to capital.

The Commissioner linked these priorities to the AU’s Comprehensive African Agricultural Development Programme (CAADP) Strategy for 2026–2035, which aims to increase agri-food output by 45 percent by 2030, reduce post-harvest losses by 50 percent, and triple intra-African agri-food trade.

Vilakati further urged African countries to implement targeted pilot projects and strengthen collaboration among key stakeholders, including development finance institutions, governments, regulators, banks, microfinance institutions, agribusinesses, fintech firms and producer organisations.

Highlighting the burden of food imports, he noted that some African countries spend hundreds of millions of dollars annually on single commodities such as rice. Redirecting even 15 to 20 percent of such expenditures into domestic production, he said, could significantly accelerate agricultural transformation.

He outlined a vision of an Africa where farmers have access to affordable climate finance, agribusinesses scale efficiently, and digital tools provide real-time data for both lenders and producers adding that this vision is achievable with the right investment and commitment.

Officials from the National Bank of Ethiopia also underscored the importance of strengthening agricultural finance. Financial Inclusion and Development Director Abraham Fekadu said the conference comes at a critical time as Ethiopia seeks to sustain its development gains.

He noted that while the financial sector is contributing more to GDP, employment and exports, agriculture has historically been underserved by formal financial institutions due to both demand- and supply-side constraints. These limitations, he said, have slowed modernization and impacted food security and economic growth.

Fekadu highlighted ongoing reforms by the central bank, including improved regulatory frameworks, land and livestock registries, financing systems and risk management tools. He also pointed to the rollout of a comprehensive agri-finance roadmap designed to scale up lending, introduce risk-sharing incentives, integrate data systems and expand digital financial services.

Despite these efforts, he acknowledged that structural challenges and limited coordination continue to hinder progress, while reaffirming the government’s commitment to advancing financial innovation and inclusion in agriculture.

Meanwhile, the International Finance Corporation (IFC) stressed that closing Africa’s agricultural financing gap requires more than willingness from lenders.
Regional Industry Director Aliou Maiga noted that sectors must also be prepared to absorb financing, emphasizing the need to remove systemic barriers that limit investment.

Maiga commended Ethiopian banks for showing early leadership in agri-finance and fostering stronger collaboration with development partners. He also highlighted growing interest in agricultural lending, supported by improved coordination and clearer market solutions.

Reflecting on Ethiopia’s economic performance, he described the country as a near-unique success story in Africa, achieving sustained annual growth of 7 to 10 percent over two decades without relying on extractive industries.

He attributed this progress to long-term investments in infrastructure including energy, roads and telecommunications as well as reforms encouraging private sector participation.

Maiga concluded that Ethiopia’s growth trajectory and reform efforts position it as a strong platform for piloting innovative agricultural financing models that could be replicated across Africa.

TNAM
Edited By Egwu Patience Nnennaya