Equity Bank: Enhancing Agricultural Resilience In Africa

Given the huge role of the agricultural sector in the African economy, the millions of smallholder farmers whose livelihoods depend on it, and the growing challenges of hunger, food insecurity, and malnutrition in rural and urban settings, an adaptation of agriculture in Africa is critical to building resilience.

Many African countries have not been able to recuperate from the shocks and negative impacts related to pandemics such as covid 19. For smallholder farmers, these shocks can exhaust scarce resources of cash, seeds, and livestock.

The Covid-19 pandemic brought unprecedented economic effects, whose impact negatively affected businesses and caused massive job losses. This threatened many livelihoods since they could no longer support themselves.

For this reason, various African leaders came up with strategies to back up the agricultural sector in the continent.

An example of such strategies is the African Resilience Plan by the Equity group.

Targeting the Eastern and Central African regions, the plan aims to rejuvenate the path to sustained strong economic growth in areas that hold vast economic potential but are struggling to recover from the health, social, humanitarian, and economic impacts of the COVID-19 pandemic.

Largely seeking to build capacity in women and young people to make them the key drivers of economic change in the real economy, the plan will pump in a total of 678 million shillings to achieve its goals.

One key pillar that will help achieve food security in the region according to Equity bank, is developing the agricultural sector in the region to unlock productivity gains and value addition ecosystems.

This, in turn,  would increase value creation in the primary sectors, which are the highest employers, foreign exchange earners, and contributors of exported goods.

The plan is the long waited answer to the question of whether Africa can feed the continent. Increased agricultural yields in Africa mean that the continent will be able to eliminate the importation of food and become a net exporter.

Smallholder farmers in Africa are still among the poorest in the world. It’s hard for them to maximize their potential without modern agricultural technologies, sufficient investment, and a distribution structure that remains ill-suited for accessing markets.

Moreover, major obstacles that limit the success of small-scale farming in Africa, include climate, technology and education, financing, policy, and infrastructure as well as poverty poor farming practices, and drought.

Statistics show that 70 – 80 percent of African cultivated areas are degraded, resulting in nutrient loss of between 30 and 60 kg per hectare annually.

It is evident that there’s a need for innovation, science, and technology to maximize training and the application of skills to the agriculture sector in Africa.

Cultivation of arable land is also essential, with access to quality inputs.

All this can be solved through supportive agricultural policies and investment, coupled with a focus on long-term sustainable solutions.

And if we are to create a sustainable platform where a new generation of small-scale farmers can flourish, what’s really required are affordable financing structures.

How Equity’s Resilience plan will benefit farmers

The African Recovery and Resilience Plan seeks to bring an agricultural transformation by increasing its investments for the smallholder farmer in order to enhance their farming practices, adopt better farming technologies, increase their crop yields and gain access to global markets.

Agricultural transformation needs long-term, low-interest financing incentives to allow farmers to purchase equipment and fund the capital expenditures that increase productivity.

Equity aims to extend its loan book with a food and agriculture loan mix of 30 percent. Moreover, the bank aims to provide low-interest rates to farmers to enable more farmers to get access.

For instance, the partnership between Equity bank and  CFAO Group now provides up to 80 percent financing on various agriculture products and inputs.

Meanwhile, on the agro-processing part, Equity aims to enhance the value of agricultural exports while processing food for easy access by an urbanizing population and production of building materials to support construction and housing development.

While African governments face a multitude of challenges, not least the present economic climate, the time is ripe for investment from the private sector.

Hunger in Africa is still a priority for governments and organizations around the world, and small-scale farmers are at the center of this possibility.