• News
    • Latest news
    • News search
    • Health
    • Finance
    • Food
    • Career news
    • Content series
    • Try Devex Pro
  • Jobs
    • Job search
    • Post a job
    • Employer search
    • CV Writing
    • Upcoming career events
    • Try Career Account
  • Funding
    • Funding search
    • Funding news
  • Talent
    • Candidate search
    • Devex Talent Solutions
  • Events
    • Upcoming and past events
    • Partner on an event
  • Post a job
  • About
      • About us
      • Membership
      • Newsletters
      • Advertising partnerships
      • Devex Talent Solutions
      • Contact us
Join DevexSign in
Join DevexSign in

News

  • Latest news
  • News search
  • Health
  • Finance
  • Food
  • Career news
  • Content series
  • Try Devex Pro

Jobs

  • Job search
  • Post a job
  • Employer search
  • CV Writing
  • Upcoming career events
  • Try Career Account

Funding

  • Funding search
  • Funding news

Talent

  • Candidate search
  • Devex Talent Solutions

Events

  • Upcoming and past events
  • Partner on an event
Post a job

About

  • About us
  • Membership
  • Newsletters
  • Advertising partnerships
  • Devex Talent Solutions
  • Contact us
  • My Devex
  • Update my profile % complete
  • Account & privacy settings
  • My saved jobs
  • Manage newsletters
  • Support
  • Sign out
Latest newsNews searchHealthFinanceFoodCareer newsContent seriesTry Devex Pro
    • News
    • Agriculture

    Agriculture task force takes aim at EU investment plan for Africa

    The EU has struggled to attract private investment to African agriculture. Now, a committee of experts will highlight shortcomings in its flagship External Investment Plan for the continent.

    By Vince Chadwick // 15 February 2019
    A Task Force Rural Africa event. Photo by: Riccardo Pareggiani / European Union

    BRUSSELS — An expert group convened by the European Union to offer advice on how to create jobs in African agriculture will point to shortcomings in the EU’s flagship initiative for the African continent, the External Investment Plan, or EIP.

    Tom Arnold, the Irish agricultural economist who chaired the group of 11 experts from Africa and Europe, explained that the “first attempt at using the EIP to get investment [in agriculture] hasn’t fully worked.” An EU official acknowledged the problem, telling Devex that agriculture is seen as too risky to attract investment, even with EIP incentives.

    “We are not saying this is the grand plan for the transformation of African agriculture. We are trying to hone in specifically on areas.”

    — Tom Arnold, chair, Task Force on Rural Africa

    Created in February 2018, the Task Force Rural Africa met five times last year, charged by the European Commission’s agriculture and development departments with accelerating “responsible EU private investment in support of African agriculture, agri-business and agroindustries.” They will publish their report on March 7.

    Arnold told Devex last month that there was political interest in the group’s work, bolstered by European Commission President Jean-Claude Juncker’s new Africa-Europe Alliance for Sustainable Investment and Jobs. The alliance is portrayed by Brussels as an attempt to forge a “co-owned economic partnership” with Africa, and Juncker said in September that this is already underway through the EIP, which “will mobilize over €44 billion [$49.6 billion] in both the public and private investment.”

    But Arnold said the task force will recommend improvements to the plan.

    “We’ll be looking at the different elements of the EIP [technical assistance, an external investment guarantee, and dialogue with businesses] and seeing if they can work together more effectively than they have up until now,” he said.

    EIP’s guarantee mechanism — the European Fund for Sustainable Development — is designed to use EU taxpayers’ money to de-risk investments in Africa as well as countries neighboring the EU. The commission asked development banks hoping to benefit from the guarantee to present proposals in strategic areas such as digitalization, sustainable energy, SMEs, and agriculture. But in July, proposals for the agriculture component were deemed insufficiently “mature.” For now, agriculture has largely been folded into support for SMEs and digitalization, with an EU spokesperson saying around 15-20 percent of the guarantees in these areas are expected to support agriculture-specific investments.

    One agriculture investment program has been approved, the spokesperson said, referring to an €85 million guarantee for the French Development Agency’s AGREENFI initiative, designed to give affordable credit to underserved producers and small rural businesses. Money has been put aside to fund further programs, the spokesperson said, adding that these will be guided by the task force report.

    A commission official, who requested anonymity, said: “It’s true, [EFSD] definitely didn’t turn out as successful in the first go for agriculture, because apparently, the risk is quite high. The banks are afraid to go there and the incentives being put by the External Investment Plan are not fully understood or not fully used in this sector of the economy.”

    Despite concerns, including from the European Investment Bank, that the EFSD has yet to be properly evaluated and only makes sense as a niche product, the commission has proposed greatly expanding its external investment guarantee model under the EU’s 2021-2027 budget.

    The official said the task force report is “an inspiration, let’s say, also to rethink with [development] colleagues how we can better make use of [the guarantee] in the future.” The guarantee is “worth having,” the official said, but in its current form it is “probably much better adapted to big-scale investments or bigger companies, or the energy sector.”

    An overview of the task force’s recommendations was presented at a meeting of European and African officials in Vienna in December. “I see this as setting down a menu of options,” Arnold said.

    EU unveils first EFSD investment guarantees but agriculture projects lag
    Last year, the European Commission revealed the first tranche of guarantees under the €4.1 billion ($4.77 billion) European Fund for Sustainable Development to boost private investment in Africa and Europe. However, officials said that proposals on agriculture projects were not sufficiently "mature."

    “We are not saying this is the grand plan for the transformation of African agriculture. We are trying to hone in specifically on areas which are important for the transformation of African agriculture and the food industry, but areas where Europe has a particular legitimacy to say ‘we will partner with Africa to deliver.’”

    Rodrigo de Lapuerta, director of the U.N. Food and Agriculture Organization liaison office in Brussels, said FAO agreed with the task force’s proposals, and “would like to be closely involved in the actions to be taken on the recommendations.”

    In the medium to long term, the task force wants a “territorial development strategy” — defined by Arnold as “a broader spread of investment in a range of centers within a country, with some form of decentralization of decision-making”; sustainable land and natural resources management and climate action; transformation of African agriculture, including a “focus on family farming, building capacity in farmers’ organizations, sustainable agricultural intensification, appropriate mechanization and agri-food systems”; and the development of the African food industry and markets through “local and regional value chain development, better access to finance and by the creation of an enabling environment”.

    In the short term, the task force wants an action plan to implement six key asks, including innovation hubs to provide practical knowledge to “agripreneurs.” And it called for “sufficient resources” for the EIP’s investment window on agriculture.

    But Hanna Saarinen, investment in agriculture policy adviser at Oxfam EU, said funding for agriculture under the EIP is not the problem. “Rather, the Commission is struggling to identify projects in the agriculture sector which are viable to fund,” she said. “So the question is: Does the EIP model actually respond to the needs of farmers in Africa?”

    Asked how to link the task force’s call for a local, territorial approach with the investment guarantees designed to spur billions in private investment from Europe, Arnold replied: “Good question.”

    European development commissioner Neven Mimica partially acknowledged the problem on Friday as he launched the new Agri-Business Capital Fund, or ABC Fund, a partnership between the EU and others who have so far committed around €55 million to support direct investments via small-scale loans for small- and medium-sized businesses and farmers' organizations, plus indirect investment in local financial institutions for on-lending.

    "Smallholders and rural businesses are not getting the investment they need from the private sector! ABC Fund will help us address this gap, improve their access to capital and consequently the lives of 700,000 rural households," he said in a press release.

    More reading:

    ► Q&A: Facing up to African agriculture's climate change challenge

    ► Why investors are looking at Indian ag-tech startups

    ► Renewed pressure on African governments to lead agricultural transformation

    • Agriculture & Rural Development
    • Funding
    • Economic Development
    • Central Africa
    • Southern Africa
    • Eastern Africa
    Printing articles to share with others is a breach of our terms and conditions and copyright policy. Please use the sharing options on the left side of the article. Devex Pro members may share up to 10 articles per month using the Pro share tool ( ).

    About the author

    • Vince Chadwick

      Vince Chadwickvchadw

      Vince Chadwick is a contributing reporter at Devex. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before covering breaking news, the arts, and public policy across Europe, including as a reporter and editor at POLITICO Europe. He was long-listed for International Journalist of the Year at the 2023 One World Media Awards.

    Search for articles

    Related Stories

    Food systems UN agriculture fund calls for investment in rural and Indigenous people

    UN agriculture fund calls for investment in rural and Indigenous people

    European UnionScoop: EU wants development staff in regional hubs, not delegations

    Scoop: EU wants development staff in regional hubs, not delegations

    Devex InvestedDevex Invested: ‘Trade, not aid’ in Africa. But how?

    Devex Invested: ‘Trade, not aid’ in Africa. But how?

    Devex NewswireDevex Newswire: ‘Profound change’ afoot for European aid

    Devex Newswire: ‘Profound change’ afoot for European aid

    Most Read

    • 1
      The power of diagnostics to improve mental health
    • 2
      Lasting nutrition and food security needs new funding — and new systems
    • 3
      Opinion: Urgent action is needed to close the mobile gender gap
    • 4
      The UN's changing of the guard
    • 5
      The top local employers in Europe
    • News
    • Jobs
    • Funding
    • Talent
    • Events

    Devex is the media platform for the global development community.

    A social enterprise, we connect and inform over 1.3 million development, health, humanitarian, and sustainability professionals through news, business intelligence, and funding & career opportunities so you can do more good for more people. We invite you to join us.

    • About us
    • Membership
    • Newsletters
    • Advertising partnerships
    • Devex Talent Solutions
    • Post a job
    • Careers at Devex
    • Contact us
    © Copyright 2000 - 2025 Devex|User Agreement|Privacy Statement