Agribusiness

Agribusiness

We are playing a central role in transforming Africa’s agriculture

We are playing a central role in transforming Africa’s agriculture

Africa’s food is largely produced by smallholder farmers who constantly battle challenges such as climate extremities, poor quality seeds and strained access to markets. Through our Agribusiness Pillar, we are playing a central role in transforming Africa’s agriculture by helping tackle these challenges sustainably, in a way that benefits food producers and consumers alike.

The pillar supports innovative initiatives that increase productivity and incomes for smallholder farmers, contributing to reduced hunger and poverty in the continent. We deliver programmes that improve the performance of smallholder farmers and businesses across the along the agriculture value chain as such as inputs suppliers, outputs producers, service providers and middlemen.

 

Our Programmes

1. The Africa Enterprise Challenge Fund (AECF)

The Africa Enterprise Challenge Fund (AECF) is a multi-donor funded financing vehicle that provides grants and interest free loans to businesses who wish to implement innovative, commercially viable, high impact projects in Africa. The AECF supports businesses working in agriculture, financial services, renewable energy and technologies for adapting to climate change. It also supports initiatives in media and information services where they relate to these sectors.

A special partnership initiative of the Alliance for a Green Revolution in Africa (AGRA), the AECF is funded by the UK’s Department for International Development (DfID), Australia’s Department of Foreign Affairs and Trade (DFAT), the Ministry of Foreign Affairs of the Netherlands (MFA), the International Fund for Agricultural Development (IFAD), the Consultative Group to Assist the Poor (CGAP), the Danish International Development Agency (Danida), and the Swedish International Development Cooperation Agency (Sida).

As programme manager since 2008, KPMG has grown the AECF from US$30m to US$ 244m (far exceeding target growth of US$75m), run 21 funding window competitions, received and processed 8795 applications, and approved 238 projects in 22 African countries. Through this extraordinary growth, the fund has had a positive impact on the lives of more than 2 million households in rural areas. AECF is pioneering the use of a challenge fund mechanism as a powerful, transparent way to leverage donor funds for private sector development and make markets work better for the poor.
 

Project Highlights

  • Tanga Fresh: this company in Tanzania has set up a modern dairy service network to increase the production, collection and supply of milk from smallholder dairy farmers. The network is increasing incomes and improving livelihoods for 4,500 farmers.
  • Biolands International: In Sierra Leone, this ambitious project is transforming the cocoa market by improving the quality and quantity of cocoa (including introducing organic and social/fair trade certification where possible) produced by smallholder farmers. The company is also working with farmers to market the improved cocoa at higher prices, raising the profile of the entire national cocoa industry. As of 2011/12, the project had contracted over 30,000 farmers.
  • Zimbabwe: AECF portfolio companies Produtrade, Kurima Gold (formerly Paperhole), and Kencor are each developing new systems to supply agricultural inputs to small farmers in Zimbabwe and to buy their produce after harvest. These companies together are making a major impact on the agricultural inputs market system in Zimbabwe. This is one example, through a single-country funding window, of how challenge funds can cause positive systemic change in a market.

 

Results

Client Feedback

“If you look at the volume of what we do, this has been a miracle. In no time, we have become one of the most prominent development finance instruments in Africa. KPMG’s engagement with companies and other organizations across the continent has encouraged the private sector to innovate and invest in new financial and agri-business products, services and projects that will benefit large numbers of the rural poor.” – Andre Dellevoet, AGRA

“The KPMG team, by being innovative and flexible, have introduced debt finance in addition to grants, and adapted the AECF into a mechanism that can run competitions for different geographies, topics and sectors – things that no other challenge fund has achieved successfully.” – Hugh Scott, AECF Director

“AGRA can confirm that KPMG has the technical capacity and social responsibility to provide services to manage development funds in a transparent and efficient way and we would highly recommend KPMG without reservation.” – AGRA


2. West Africa Food Markets Programme

The West Africa Food Markets (WAFM) is increasing availability of staple foods and purchasing power of farmers in food-insecure regions of the Sahel and improving their resilience to hunger and malnutrition during the regular hungry seasons and times of periodic shocks. The programme includes anUS$ 9.9 Million Challenge Fund component that KPMG IDAS manages. Through the Challenge fund we are investing in business models that will strengthen national and regional trade for targeted staple foods such as maize, millet, sorghum and cassava along key corridors across the Ghana – Burkina Faso & Niger – Nigeria borders.

The ideas we are funding will ultimately benefit poor farmers in Burkina Faso, Ghana, Niger and Nigeria and consumers through reduced and/or more stable prices for staple food. We select those that have a high level of innovation and impact for poor people including women and which would not take off without the funding or if they did, they would do so at reduced scale

3. Food Trade Eastern and Southern Africa

We are implementing Food Trade ESA in a consortium led by Development Alternatives Inc. (DAI) Europe and incorporating Michigan State University, Regional Network of Agricultural Policy Research Institutes (ReNAPRI) and africa practice. The vision of Food Trade ESA programme is to unlock trade across borders and across the region to get more food to more people in Burundi, Kenya, Rwanda, Tanzania and Uganda (East Africa) and Malawi, Mozambique, Zambia and Zimbabwe (Southern Africa).

We are managing both the Challenge Fund - which is catalyzing innovative private sector investment in regional staple food markets — and the Development Fund – which is facilitating dialogue and action around the key blockages to the development of regional staple food markets and to fund targeted interventions in partnership with relevant institutions, organizations and companies.

To date, we have supported three challenge fund competitions, all of which have contributed to unlocking regional staple food trade and creating positive impact by delivering increased employment and income, improved staple prices, improved access to markets, inputs and services, and increased volumes traded. Through the Challenge Fund, Food Trade ESA challenges for-profit companies to develop new business models that provide solutions to market failures in the market for staple food while delivering commercial benefits. They are provided with partial funding (of up to 49% ) ranging from £450,000 to just under £1 Million, to fund competitively selected investment ideas.
 

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