Africa food future won’t be fixed by finance alone

As the Financing Agri-food Systems Sustainably in Africa (FINAS) Summit concluded in Nairobi early this month, one recurring theme stood out: Africa's agricultural challenge is often framed as a financing problem.

Yet the real question may be whether we are asking the wrong question. Africa does not simply need more capital flowing into agriculture. It needs stronger systems that allow capital to perform optimally. The continent's financing gap is real.

Estimates place Africa's annual agricultural financing shortfall at more than $100 billion, while the sector receives less than five percent of commercial bank lending despite underpinning livelihoods, food security and economic growth across the continent.

Encouragingly, policymakers are responding. Kenya recently launched its Sh1 trillion National Agri-Food Systems Investment Plan (Nasip), signalling growing recognition that agriculture must be financed at scale.

Yet the real test will not be how much capital is mobilised, but whether that investment translates into productivity, jobs, resilience and competitive enterprises.

But finance is only one piece of a much larger puzzle. The people at the heart of African agriculture are not large commercial producers.

They are the millions of smallholder farmers, traders, aggregators, processors, cooperatives and agri-SMEs that make up the continent's largely informal food economy.

Smallholders alone produce an estimated 70-80 percent of Africa's food. For these actors, access to finance is rarely the only constraint. A farmer may receive credit but lack access to extension services, climate information or reliable buyers.

An agri-SME may secure a loan but struggle with business management, food safety standards or market access. A youth-led enterprise may attract investment but lack the networks, technical skills or market intelligence needed to scale. In each case, money is necessary, but insufficient.

These examples illustrate a broader truth: finance rarely fails in isolation. Where markets are fragmented, information is scarce, capabilities are weak and risks remain high. Capital alone cannot deliver transformation.

The bigger challenge is building food systems that are productive, competitive and ultimately investable. This challenge is becoming more urgent as Africa enters a decisive demographic moment.

The continent is home to more than 500 million young people, with millions more entering the labour market each year. At the same time, agriculture is becoming increasingly knowledge- and information-intensive.

Competitive advantage is no longer determined solely by access to land and capital. It is increasingly shaped by access to data, technology and markets.

From weather forecasts and soil information to market intelligence, traceability systems and digital financial records, the ability to make informed decisions is becoming a critical driver of productivity, resilience and investment readiness. The lesson is not new.

The Netherlands built one of the world's most productive agricultural sectors by linking research, skills, enterprise and markets. Germany and Switzerland institutionalised industry-led training. At Swisscontact, we have seen similar results through market-driven skills development approaches that connect training, enterprise needs and employment opportunities.

Rwanda and Ethiopia have likewise shown that farmer capability, extension services and market development must evolve alongside investment. The common denominator is clear: agricultural competitiveness emerges from functioning systems, not isolated interventions.

Encouragingly, the political ambition is clear, the African Union's Kampala CAADP Declaration targets a 45 percent increase in agrifood output, stronger food systems resilience and a tripling of intra-African agricultural trade by 2035.

Achieving those ambitions, however, will require more than financial commitments. It will require stronger producer organisations, responsive extension systems, better market infrastructure, improved information flows and closer connections between enterprise development, skills and finance.

Africa's agricultural challenge is not fundamentally a financing challenge. It is a systems challenge. The task before policymakers, investors and development actors is not simply to finance agriculture. It is to build the conditions that make finance effective.

When markets function, information flows, enterprises grow and risks are reduced, capital becomes more productive. Finance then stops being an end in itself and becomes a catalyst for competitiveness, resilience and growth.

Africa's agricultural transformation will not be determined by how much money enters the sector. It will be determined by whether the systems receiving that investment are equipped to turn it into lasting value.

Sharon Mosin is the Country Director, Swisscontact Kenya