WEF_GrowAfrica_AnnualReport2014

It takes partners
While there is no one single approach to successfully
financing agri-SMEs and the smallholders they link to,
there is one recurrent theme – the need for partnership.
The road to solving the finance gap can only be
Grow Africa’s Working Group on Finance
As access to finance is a systemic constraint
facing agricultural SMEs and commercially-minded
smallholders across the continent, unlocking it
demands unprecedented collaboration between
partners. In response, Grow Africa has convened a
Working Group on Finance, comprised of leading
experts from across banks, agribusinesses, NGOs and
international bodies. The Group acts as a think-tank
to develop finance models and connect potential
partners, in response to the general and specific
challenges faced by planned investments being
advanced by Grow Africa’s partner companies.
In early January 2014, the Working Group kickstarted
activities at a meeting in Dar-es-Salaam, with
participants including representatives from ABSA
Barclays, AGCO, AgDevCo, CARE, Equity Bank, IDC,
IFAD, Opportunity International, Save the Children,
Syngenta and WFP. The Group is co-chaired by
effectively traversed when agri-chain actors, commercial
and non-commercial finance providers, development
organisations and governments undertake the journey
together.
Yara and Rabobank. A project manager has been
generously seconded to Grow Africa by Rabobank to
provide secretariat support to the Group’s work.
Concretely, the Group is initially convening teams to
work on focus projects where finance solutions are
required to unlock specific value chains or overcome
systemic constraints. One team is asking how to
integrate 30,000 Rwandan smallholder farmers into
commercial supply chains for potatoes and finance
increased production. Other teams are asking similar
questions about smallholder production of maize in
Northern Ghana; sugar in Mozambique, Kenya and
Tanzania; and maize and pulses in Malawi, Tanzania
and Rwanda. Finally, a team is looking systemically
at how to develop new or improved blended-finance
instruments that support inclusive agribusiness
models.
THEME 3: A MARKETPLACE
Connecting partners, data and tools
to unlock opportunities
Despite the great promise of African agriculture, it can be difficult to confidently identify
business opportunities and then structure partners around these to create efficient and
productive value chains. Whether smallholders, domestic companies or multinationals, all
actors struggle to access reliable data to guide commercial decisions, and to access relevant
partners with whom to collaborate. In 2014, Grow Africa will pioneer an online platform for
convening partners and data, with tools that enable collaboration around specific business
opportunities.
Is this a real business opportunity?
Whether it is a smallholder asking “Should I buy a
bag of better-quality seeds?”, or a company asking
“Should I build a cold storage warehouse?”, both face
the same problem – accessing accurate data to guide
their decision-making. The viability of their investment
decision depends upon what is happening along the
value chain: input prices, transport costs, commodity
prices, credit rates, seasonal weather, and who is
operating in specific localities.
An enormous amount of data is available on African
agriculture in both the public and private spheres,
but it is chaotically structured, siloed and frequently
too generalised or out-of-date to be of use for
business decisions. Development partners such as
the UN’s Food and Agriculture Organisation (FAO), the
International Food Policy Research Institute (IFPRI)
and the World Bank provide considerable data on
food prices, soil quality, crop yields and smallholder
households. Commodity exchanges, mobile phone
companies, and business information services have
increasingly robust information on prices, logistics,
input markets, and other transactions critical to
smallholder productivity.
However, sourcing all this information and bringing it
together to develop a specific business proposal is
a laborious and imperfect process, with companies
consistently asking Grow Africa for help in creating
compelling business cases.
Who will partner with me?
Once a business opportunity emerges, there is always
a need for multiple players to collaborate along a
value chain to convert it to reality. Which farmers are
growing beans? Who will be the off-taker? Where
will the capital come from? Fragmented information
reflects fragmented communication between market
participants and pre-competitive stakeholders. This
makes it difficult for potential value-chain partners
to connect around an opportunity and easy for a few
well-connected participants to control a value chain,
reducing competition and capturing the majority of the
value at the expense of smallholders.
Grow Africa’s web portal: a virtual commons to connect partners and information
As the mobile boom in Africa has connected millions to
cellular voice and SMS services, the expansion of 4G
data services is poised to transform African economies.
Internet access to rural areas of Africa will enable
communities to benefit from more and better market
information, and will connect smallholders to investors,
support services and markets.
In 2014, Grow Africa will develop an enterprise
business network for SMEs in the African agribusiness
community to connect to other firms and organisations
within their country, across the globe, or from the Grow
Africa Secretariat’s partner network. In the second
stage of development, the platform will connect
existing digital services to the low-bandwidth, mobile
and social media appropriate for reaching rural African
markets.
As well as connecting partners for collaboration on
business opportunities, the platform will help access
data for commercial decision-making, and host data
analysis applications including the Gap Analysis Tool
for Agriculture (GATA) that is under development.
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Review of 2013 Review of 2013
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