Africa’s ambition to feed itself and unlock agriculture’s economic potential will depend largely on whether smallholder farmers, young entrepreneurs and women-led businesses can access the financing they need to expand, create jobs and withstand climate shocks, according to the International Fund for Agricultural Development (IFAD).

Geraldine Mukeshimana, IFAD Vice President, said Africa has the land, water and human capital to become a major global food producer, but a persistent financing gap continues to hold back people operating at the "first mile” of the continent’s food systems.

She made the remarks in an exclusive interview with The New Times on the sidelines of the Africa Food Systems Forum (AFSF), which concluded in Kigali last week.

During the forum, IFAD signed several financing agreements aimed at de-risking agricultural investment, mobilising private capital and expanding access to finance for underserved farmers, farmers’ organisations and small businesses.

Mukeshimana said Africa must move beyond repeatedly talking about its enormous agricultural potential and focus on turning that potential into measurable economic results.

"When you want to develop, you start with the strengths you already have. In Africa, those strengths are our land, our water, and most importantly, our people,” she said.

Smallholder farmers are central to that potential. They produce a large share of the food consumed on the continent, yet many remain excluded from formal financial systems and are among those most vulnerable to climate shocks.

"The reason behind that is that at IFAD we support these types of first miles of the food systems, but we know that they are the ones who do not get access to finance and they are the ones that are hit hardest by the climate issues,” Mukeshimana said.

$200m climate finance facility

One of the largest agreements signed in Kigali is a $200 million blended finance mechanism with Equity Group to expand climate adaptation financing for small-scale producers and rural enterprises in Rwanda, Kenya, Uganda and Tanzania.

Under the arrangement, IFAD will provide $90 million in concessional financing, matched by $90 million from Equity Group’s balance sheet. Another $20 million will support technical assistance to strengthen financial institutions and help farmers and rural businesses become investment-ready.

The programme is expected to reach about 260,000 small-scale producers and 500 rural microenterprises and agribusiness SMEs, potentially improving food security for an estimated 1.2 million people.

Mukeshimana said technical assistance is critical because farmers, cooperatives and small businesses often lack the financial management skills needed to engage effectively with banks.

"Many of our farmers, our cooperatives, our SMEs don't know how to engage with the banks, they don't know how to keep their accounts or build the cases that can make it to the banking industry,” she said.

The programme will support financial institutions to develop appropriate lending products while helping farmers and rural businesses improve their financial management and investment readiness.

The ultimate goal, she said, is to demonstrate that climate adaptation finance can become commercially viable, allowing banks to continue lending after concessional support ends.

"We want it to be a learning opportunity so when this one finishes, Equity Bank can go in alone without having all of us behind it,” Mukeshimana said.

More finance for farmers’ organisations

IFAD also signed an agreement with Bank of Kigali involving a $21 million financing package to improve access to finance for farmers’ organisations.

The package includes $9 million from IFAD and $9 million from the bank’s balance sheet, alongside technical assistance and a guarantee mechanism.

The arrangement is intended to reduce some of the risks associated with agricultural lending while leaving the bank responsible for assessing borrowers.

Mukeshimana said the guarantee is designed to complement, rather than replace, the bank’s risk assessment.

"We are putting all the tools that are needed for the financial sector to succeed, but also for the farmers and the farmers' organizations also to succeed,” she said.

Access to capital can enable farmers’ organisations to aggregate produce, purchase inputs, invest in storage and connect farmers to reliable markets, helping smallholders achieve the scale required by formal markets and lenders.

Helping small businesses break through

Another agreement involving AgDevCo Ventures will provide a $10 million facility targeting very small businesses in East Africa.

IFAD is contributing $4 million, while the UK Government is providing $1 million, with other partners contributing to the facility.

Mukeshimana said the initiative targets businesses that survive for years but struggle to move beyond the early stages of growth.

"You will find that you have small companies. Many of them don't break through. And they don't transform the economy because they remain very small for long,” she said.

The facility will help identify barriers preventing early-stage businesses from expanding and support them towards commercial financing.

Youth and women

Mukeshimana said Africa’s food transformation must also put young people and women at the centre of agricultural financing.

Many young entrepreneurs remain disconnected from formal finance despite having education, digital skills and business ideas. A lack of land, collateral or credit history can make traditional bank loans difficult to secure.

"They have their brains, they have their energy,” she said. "But young people and the banks do not know each other.”

Women-led businesses face similar barriers, particularly those operating at the smaller end of the economy.

"At IFAD, we believe these farmers are not only essential, they are investable,” Mukeshimana said.

"The future of food belongs to Africa if we empower smallholder farmers, youth and women and connect them to markets and the wider food ecosystem,” she said.

However, financing farmers alone will not be enough. Africa’s food systems also require investment in storage, transportation, logistics, cold chains and processing facilities to ensure food reaches consumers and markets efficiently.

Mukeshimana noted that more than 30 per cent of food is lost between the farm and the market, highlighting the scale of the infrastructure challenge.

Public money to attract private capital

Mukeshimana said public institutions have a crucial role to play in making agricultural investment more attractive to commercial lenders.

Rather than replacing private capital, concessional public financing should help absorb some of the risks that initially discourage commercial investors.

"Our role as a public institution is to push that blending,” she said. "Come in with the concessional public money so that we can be able to attract the private money.”

She said the much-discussed trillion-dollar agribusiness opportunity must now move beyond conference speeches and become a measurable economic reality.

"The trillion market of agribusinesses, it's an order number that everyone says. But I think it needs to get from speeches of potentials into the outcomes. There is a long way between the potential and the real thing, the food and that road needs to be navigated correctly and smartly,” she said.

Josephine Francis, Vice President of the PanAfrican Farmers Organisation (PAFO), said Africa must invest more heavily in farmers and young people if it is to achieve food security.

She said agriculture must also become more attractive to Africa’s growing youth population by moving away from traditional approaches and treating farming as a modern business.

"We need to move from the system of our grandparents and move to modernisation,” Francis said. "If we make agriculture attractive, young people will be focused.”

In 2025, about 309 million Africans were affected by hunger, representing about 20 per cent of the continent’s population, while about 57 per cent experienced moderate or severe food insecurity, according to officials.