NAIROBI, Kenya, Feb 13 – The International Finance Corporation (IFC) has announced plans to double investment in agriculture sectors across Africa next year.
IFC Chief Executive Officer Lars Thunell said on Friday said that they would increase investments to Sh37.1 billion in its next financial year.
Speaking during the signing of a partnership between the Alliance for a Green Revolution in Africa (AGRA) and IFC, Mr Thunell said his corporation would spend Sh15.8 billion in the current financial year.
“The challenges to growing Africa’s agribusiness are great. But so are the opportunities. IFC is committed to helping Africa capitalise on these opportunities by playing a catalytic role of bringing a wide range of partners together to deliver practical market based solutions. Our alliance with AGRA is a very important step in this direction,” said Mr Thunell.
AGRA’s President Namanga Ngongi noted that the partnership with IFC will harness the strengths of both organisations to scale up AGRA’s innovative programs across the agricultural value chain.
“The growth of the agricultural sector will strengthen the continent’s food security as well as create employment and raise living standards for millions of smallholder African farmers,” said Mr Ngongi.
He observed that the amount of agricultural lending in Africa is very low; one of the reasons hindering farmers’ ability to achieve their full potential, and escaping hunger and poverty.
Meanwhile, IFC has entered into a Sh395 million guarantee agreement with Diamond Trust Bank Kenya (DTB) to support the bank’s trade finance activities.
“This collaboration will enable DTB Kenya to increase its trade finance activities, helping more local East African companies grow and compete in the International marketplace,” said DTB Group Chairman Mahmood Manji.
The guarantee by IFC will contribute towards the volume of Trade Finance instruments issued by DTB to finance imports to Kenya, Uganda, Tanzania and Burundi.
Mr Thunell said the trade finance program promotes trade with emerging markets worldwide by supporting flows of goods and services to and from developing countries.
He said through the program, IFC would provide guarantee coverage of bank risk in emerging markets, allowing recipients to expand their trade finance transactions within an extensive network of countries and banks and to enhance their trade finance coverage.
This is the second time in less than a year that IFC and DTB Kenya have entered into a collaborative arrangement.
This follows last year’s Sh2 billion financing package availed by IFC to DTB to support the bank’s expansion plans and to enable it increase lending to small and medium enterprises.
Mr Manji revealed that plans to increase its branch network from the current 30 to 100 in the next three years are still on course.
He said this year the group plans to open nearly 20 new branches including in Bungoma, Kitale, Kakamega, Kericho, Buru Buru, and Diani in Kenya, plus plans are underway to open a branch in Zanzibar as well as other parts of Tanzania.
“We will also be opening a new banking subsidiary in Burundi in the next two months or so, and we are exploring the establishment of banking operations in other parts of Eastern and Southern Africa over the next three to four years including Madagascar, Mozambique, DRC and Rwanda,” said Mr Manji.
IFC has been a shareholder in DTB since 1983 and currently holds a 9.85 percent stake in the bank.