French development finance institution Proparco has announced the launch of the Africa AgriTrade Coalition, to scale up agricultural value chain trade financing across the continent. In addition to Proparco, the coalition embraces 16 major financial institutions, both within and without Africa, with a total combined balance sheet of about $430-billion.

The initiative is aligned with the aims of the African Continental Free Trade Area, including regional integration and the development of intra-African agricultural trade. The other members of the coalition were AFG Holding, Banque El Amana, Banque Mauritanienne de l’Investissement, Banque pour le Commerce et l’Industrie, BPER Banca, Co-operative Bank of Kenya, Coris Holding, CRDB Bank, Ecobank Transnational Incorporated, Equity Group Holdings, KCB Bank, Mauritius Commercial Bank, NSIA Holding Financière, Qatar National Bank, UBCI, and the Union de Banques Arabes et Françaises.

Currently, African agricultural trade suffers from a more than $50-billion financing gap. This is retarding essential value chains all over the continent. Examples are cashew and cocoa in West Africa, maize, soy and sugar in Southern Africa, and cereals and fertilisers in East Africa.

“Closing even a small part of this gap could unlock hundreds of millions of dollars in additional financing, with tangible effects on market access, employment, supply chain resilience and the security of food supply chains,” affirms Proparco. “At a time of ongoing supply chain disruptions and geopolitical tensions, access to trade finance is becoming increasingly critical to keep agricultural markets functioning.”

The 17 partner institutions launched the coalition with the signature of a Declaration of Intent, at the Business Forum of the Africa Forward Summit in Nairobi, Kenya. The implementation phase will start next month. This will be centred on strengthening interbank collaboration, identifying and structuring the first transactions, and developing a pipeline of operations.

“The first transactions are expected to emerge in the coming months, generating concrete financing flows across selected value chains, with the platform set to expand over time as additional financial institutions join and collaboration deepens,” highlighted Proparco.