Strengthening the UK’s support transforming food systems in Africa

• Client: DFID
• Location: Africa

The challenge : Boosting the incomes of small-holder farmers in Africa

Boosting the incomes of small-holder farmers in Africa, especially for women Africa must produce more food to feed its growing population. Any more medium and large scale agricultural businesses are needed in many more African countries. Such businesses often start small and face complex obstacles to growth. One such issue is sourcing the right kinds of finance facilities and instruments that are both affordable and bring with them vital technical assistance to foster sustainable growth.

In response, the UK Government is keen to help poor small-holder farmers in Africa boost their income and improve their well-being, that includes a strong focus on women having their fair share. Over £100m has been provided by DFID to the Agriculture Development Company, AgDevCo, to invest in African agribusinesses, with the aim of strengthening their operations and improving their impact on poverty. This is not straightforward; the challenges facing smaller businesses are considerable; weak governance, volatile weather patterns, poor infrastructure, access to markets… All these mean that AgDevCo investees struggle with debt repayment, equity returns and developing new markets – and good investees are oversubscribed with support while others lack the support they need.

Our work : Reviewing UK investments in African agribusiness

Wasafiri conducted a comprehensive review of AgDevCo’s performance in 2016. This was the first independent review and part of a series of reviews that DFID undertakes on an annual basis to understand whether milestones are being achieved, to harvest lessons and to identify strategic issues for re-calibrating future action.

We brought to bear a range of complementary expertise, covering agricultural investment finance, small and medium size enterprise management, organizational governance and development impact. Our team covered many dusty miles in Malawi and Tanzania to meet with investees, observe their operations, and consult with staff from AgDevCo.

The outcome : On the right road — keep it up!

We found that AgDevCo performed well while operating in a difficult environment. Our findings confirmed that the organisation is providing investment finance to companies that probably couldn’t find it elsewhere, and offering financing in ways that worked well for the agribusinesses receiving AgDevCo’s support.

We also found that efforts to find opportunities to support women farmers and agribusiness employees are underway and progressing well. However, ways could be found to mainstream opportunities for women more fully into decision-making about which investments to take forward.

DFID was extremely satisfied with Wasafiri’s review, both for the quality of findings, and the way in which it was managed. It came at an important time — new resources en-route to the Commonwealth Development Coorporation from DFID, could, in turn, make their way to AgDevCo to significantly expand the work.