Willing to support local and regional development, the Johannesburg agency now funds more than thirty projects and has increased its activity by four between 2004 and 2008 to meet the financing needs of projects for the region's development. Photo © Coda
Assessing Credit Guarantee Schemes for SME, Finance in Africa - Evidence from Ghana, Kenya, South Africa and Tanzania
Angela Hansen, Ciku Kimeria, Bilha Ndirangu, Nadia Oshry and JasonWendle, Dalberg Global Development Advisors
Contact: Cécile Valadier, Research Department, AFD
The purpose of this study, focused on Ghana, Kenya, South Africa and Tanzania, is to contribute directly to the efforts of practitioners so that they can more effectively leverage SME financing, through better-functioning credit guarantee schemes, where appropriate. Our primary audience includes development and public organizations engaged in supporting SME access to finance,as well as banks and SME representatives looking to understand the nature of such efforts and the implications for their business.
For several years France has been engaged in a series of reciprocal Seasons with its key international partners (China, Japan, India, Turkey, Russia and Brazil among others). With South Africa, this will be the first time that a sub-Saharan country is involved in the Seasons with France.
The goal of these Seasons is to improve mutual understanding and contribute to the diversification of France’s image in South Africa and South Africa’s image in France by emphasising the modernity and values that the two countries share. For this season, AFD is participating through the organization of two events.
The French Season in South Africa 2012 is:
- A festive period: a wide range of over 70 different projects, performances and initiatives are planned across South Africa. Cultural events will be combined with a wide array of events in other fields: innovation, science and technology, higher education, business, tourism, sport and languages with the involvement of many different actors.
- A showcase of the numerous links existing between France and South Africa
- An opportunity to reinforce a wide range of existing collaborations and to build a lasting legacy for both nations.
There is so much to look forward to as the French Season in South Africa continues right through until November 2012 in towns and cities around South Africa.
The South African Season in France will take place from May to December next year (2013).
European, African and international partners have set out to tackle the threats to Africa’s food security by pooling their resources and expertise for the first time in a single investment fund (African Agriculture Fund, AAF). The aim is to promote agricultural investments in Africa and increase agricultural production for domestic consumption.
Increasing threat to food security for Africans
The 2008 food riots revealed the number of challenges facing Africa in terms of food security:
- the uncontrolled increase in urban populations, which rely on food imports subject to price volatility in agricultural raw materials;
- the chronic dependence on emergency food aid, particularly in destabilized regions such as the Sahel zone;
- the practice of land grabbing by speculative investment funds to the detriment of the interests of village producers;
- the lack of political will to establish regional strategies based on farmers’ production sectors;
- private agricultural companies and cooperatives’ lack of own resources to increase their production and modernize industries.
African Agriculture Fund: a first
The international community has mobilized to address these issues via various initiatives. For the first time, European partners (AFD, European Union, Spanish Agency for International Cooperation and Italian cooperation), African partners (ADB, BOAD, EBID, DBSA and the AGRA Foundation) and UN agencies (IFAD and UNIDO) have pooled their resources and expertise within a single investment fund (African Agriculture Fund or AAF) in order promote agricultural investments in Africa.
A palm plantation in Ghana, © AFD Agency in Ghana
Anti-money laundering and sound land management
This pan-African fund was quoted in the Final Declaration of the G20 Agriculture Meeting in June 2011. It is expected to total over $200m by July 2012 and operates throughout the agricultural value chain (production, processing and distribution), with priority given to the primary sector (cereals, livestock, aquaculture, fruit production…).
The fund’s procedures cover compliance with strict social and environmental standards, systematic due diligence on anti-money laundering and corruption and the application of a code of sound land management.
Two AAF projects already underway
AAF has already invested in two projects: the first aims to refurbish a palm oil processing plant in Sierra Leone via a $10m investment alongside financing from Finnfund . This project is part of the international community’s post conflict initiative. It involves over 8,000 independent planters and will increase production destined for the domestic market.
The fund’s second investment, worth $20m, will extend an egg production farm in Zambia and develop the different sector stakeholders (from soya production for poultry feed to distribution points, including storage improvement).
The next investments are expected to be made in French-Speaking West Africa ( Côte d’Ivoire ) and in a wide range of sectors (mineral water, sugar, crop protection…).
The fund has two instruments which more specifically target small producers or entrepreneurs: a $30m subsidiary fund earmarked for agricultural SMEs and a $15m technical assistance facility to subsidize the professional integration of small producers, capacity building and the development of services for SMEs.