Africa must relook at food systems financing

Oil price spikes of 40–50 percent within days rippled across fertiliser markets and food prices worldwide, reaffirming the vulnerability of African economies that rely heavily on imported energy, agroinputs, logistics and food commodities.

This crisis should be a wakeup call. Africa must urgently rethink its financial architecture for agrifood systems, not through incrementalism, but through structural redesign anchored in domestic resource mobilisation, innovative finance, and governance reforms.

The scale of the financing challenge for Africa’s agrifood systems is huge. Africa’s agrifood systems responsible for livelihoods of more than 60 percent of the population, remain drastically underfinanced.

By 2030, the continent will require $77 billion annually to adequately transform agriculture and food systems, with $62 billion expected from the private sector and $15 billion from public sources.

Yet the resources are not flowing at the scale or speed needed. For example, external development finance for African food systems grew only marginally, from $18.1 billion in 2018 to $21.5 billion in 2023, despite escalating food insecurity and climate pressures.

Let us face it with real facts. First, Africa receives 38–42 percent of global food systems financing, but allocations remain stagnant and overly concentrated in just 11 countries, leaving many behind.

Second, agriculture receives only three percent of global development funding, despite its centrality to Africa’s gross domestic product and employment base. Lastly, public agricultural expenditure has grown from $138 billion in 1990 to $449 billion in 2023, but its share in overall budgets has declined by 55 percent over the same period, reflecting weakening prioritisation amid fiscal stress.

Meanwhile, African farmers continue to face an annual financing gap of $60–100 billion, with smallholders—who produce 70 percent of Africa’s food—unable to access fairly priced, longterm capital.

Africa’s financial architecture is misaligned, fragmented, and externally dependent, conditions incompatible with building resilient food systems.

Recall that such global shocks are now structural, not cyclical. What we are witnessing in the Middle East conflict has illustrated how a regional war can reconfigure global markets.

The closure of the Strait of Hormuz removes close to 20 percent of global oil supplies, creating a supply shock three to five times larger than oil shocks of 1973, 1979, 1980 or 1990.

For Africa, this translates directly into higher fertiliser prices, as nitrogen fertiliser production heavily depends on Middle Eastern liquefied natural gas (LNG). Recent disruptions have pushed LNG prices up 60 percent since February.

Soaring import bills for food and transport, further straining public budgets and widening trade deficits. Rising inflation, where shocks to oil, shipping and aviation cascade into food prices—exacerbating fragility for netimporting African nations.

These are no longer episodic crises. They reflect a new era of systemic volatility. Africa must build a financial architecture capable of insulating food systems from such external turbulence.

Here are few solutions that Africa leaders need to consider for a new financial architecture.

First Africa—led by the Africa Union—needs to revisit the Obasanjo Commission recommendations on domestic resource mobilization and financial sovereignty. Its obvious now that Africa cannot build resilient food systems on the back of unpredictable aid flows.

External development financing for food systems has proven both volatile and insufficient, rebounding temporarily after crises but declining again in 2023.

Second, leaders must re-think and intensify domestic financing and unapologetically build Africa’s own financing asset. With a new era of Comprehensive Africa Agriculture Development Programme (CAADP) and integrating food systems, we debate of increasing agriculture’s share of national budgets, consistent with CAADP’s commitment to allocate at least 10 percent to agriculture needs more amplification that before.

Each African country must start developing local capital markets, including foodsystemlinked treasury instruments, diaspora bonds, green agrifood bonds, and municipal financing for agroinfrastructure. More critical and for all these to happen, Africa leaders must add an effort to strengthening governance, including land reforms, public expenditure tracking, and integrated food systems planning to ensure funds reach intended outcomes.

The Kampala CAADP 2026–2035 strategy offers a roadmap for aligning investment with continental priorities such as building highperforming agrifood systems and unlocking privatesector opportunity.

Th solutions are not far from reach as some countries are already scaling innovative and blended finance instruments as efforts to crowd in private capital at scale. Africa needs broaden its toolkit and reduce risk perceptions.

Here is just a snapshot. While the blended finance market recorded USD 18 billion in 123 deals in 2024, SubSaharan Africa’s share is shrinking and only 11 percent reaches low-income consumers or SMEs—the heart of Africa’s food systems. A shift from bespoke pilots to systemic, pipelineready financing is urgently needed. Credit guarantee schemes, matching grants, and firstloss facilities are also great solutions to derisk agricultural lending and attract institutional investors.

Impact investing, particularly models combining climate resilience, youth employment, and sustainable production. Digital finance, from mobilebased microinsurance to payasyougrow asset financing, already helping farmers access weatherindexed insurance and loans.

Some of these examples already exist in countries like Kenya, Malawi, Morocco and Rwanda and show how structured public–private partnerships and regulatory reforms can unlock inclusive and climatesmart agrifood investment at scale.

My last message is on the need to build governance systems that enable market confidence. Finance follows governance. Africa’s food systems financing has long been undermined by fragmented policies, weak coordination, and siloed interventions.

As AGRA, we are re strategizing in many ways on how we support governments. For example, our support model is evolving to support integrated national food system financing frameworks, combining public budgets, donor funds, and private finance in a single investment plan.

Our work on support to strengthen accountability systems, drawing from food systems financial tracking tools, like the IFADWorld Bank Financing Flows for Food Systems (3FS), which provides visibility across domestic, external and private flows.

Our partnerships are also offering Agrifintechenabled transparency, offering realtime data on farmer creditworthiness, insurance triggers, supply chain performance and input subsidy tracking.

We are also looking at emerging good models such as regional digital integration, including the east Africa community EAC’s initiatives of reducing transaction costs and enables crossborder agricultural trade and payments. Good governance is the catalyst that converts financing into real transformation.

FINAS 2026 is a Defining Platform for Africa’s New Era of Food Systems Financing. As Africa prepares for the next FINAS Summit, the continent stands at a crossroads. Previous FINAS summits have spotlighted the continent’s financing challenges, fragmentation, risk perceptions, and low investment in smallholders and SMEs and called for transformational, not transactional financing.

FINAS 2026 must build on this momentum by consolidating a continental financing compact aligned with the Kampala Declaration. By Mobilizing domestic capital, including sovereign wealth funds, pension funds, commercial banks and microfinance institutions. By scaling up local innovations, from youth-led digital platforms to green finance mechanisms.

By centering women and young people, who form the backbone of agrifood value chains yet remain disproportionately excluded from credit.

Africa has the ideas. Africa has the talent. Africa has the markets. What remains is to create a financing and governance ecosystem that allows these forces to converge at scale.

It is Africa’s moment to lead. The US–Israel–Iran crisis has exposed the fragility of a global system Africa does not control. But it has also opened a window for Africa to reimagine a food systems financing model rooted in sovereignty, innovation, and resilience.

Africa must now choose either remain vulnerable to external shocks, or build a sustainable financial architecture that feeds the continent, uplifts its people, and secures its future. FINAS 2026 provides the moment to make that choice unmistakably clear.

Boaz Blackie Keizire is the Director of Policy & State Capability at AGRA