African agriculture faces a significant challenge in transforming promising projects into sustainable businesses that can thrive beyond grants, pilots, and development funding. This was a key discussion point at a leadership breakfast meeting convened by PepsiCo and RTI International at the Africa Food Systems Forum in Kigali. The meeting brought together representatives from business, government, development finance, philanthropy, and agriculture to explore ways to build commercially viable food value chains.
The discussion centered on a market-led model, where agricultural investment begins with a credible market opportunity. This approach involves establishing demand and offtake before deploying capital, aligning incentives across the value chain, and ensuring that farmers can participate profitably. By adopting this model, stakeholders aim to create sustainable agricultural investments that can attract commercial finance and reduce reliance on grants and development funding.
Public and philanthropic capital can play a crucial role in supporting this model by reducing early risk, strengthening infrastructure, building capability, and helping promising models reach commercial viability. This strategic use of capital can help bridge the gap between project development and commercial investment, enabling more sustainable agricultural projects to scale.
The Africa Food Systems Forum in Kigali provided a platform for stakeholders to share experiences and best practices in building commercially durable food value chains. The forum highlighted the importance of collaboration between public and private sectors in driving sustainable agricultural growth and investment. By working together, stakeholders can create an enabling environment for market-led agricultural investment.
Ethiopia, as a host country, has been actively working to create an environment conducive to agricultural investment. The country has been implementing various initiatives to improve the business climate, including the development of a trader guide and digital portal to facilitate trade under the African Continental Free Trade Area (AfCFTA) agreement.
The market-led model has gained traction among food-system leaders, who recognize its potential to unlock sustainable agricultural growth and investment. By prioritizing market opportunities and aligning incentives, stakeholders can create commercially viable projects that can attract investment and drive growth in the sector.
The endorsement of the market-led model by African food-system leaders marks a significant step towards creating a more sustainable and investment-friendly agricultural sector. As stakeholders continue to work together to implement this approach, they are likely to unlock new opportunities for growth, investment, and job creation in African agriculture.
Key points
- African food-system leaders have endorsed a market-led model to scale agricultural investment and build commercially durable food value chains.
- The model prioritizes establishing demand and offtake before deploying capital, aligning incentives, and ensuring profitable participation for farmers.
- Public and philanthropic capital can support this model by reducing early risk, strengthening infrastructure, and building capability.
