Nearly half of the African Development Bank’s portfolio is now labelled climate finance. Funds billed as climate resilience are flowing into fertilisers, hybrid seeds and large-scale processing, while smallholders practising low-input agriculture struggle to attract backing.
Conrad Obiero, One Planet Agency
Billions of dollars meant for “food security, resilience and climate action” in Africa largely went to big agribusinesses, fertiliser and pesticide companies, hybrid seed suppliers, processors and trading firms over the last five years.
As a result, smallholder farmers promoting low-cost, locally available methods such as compost manure, saved seeds, crop rotation, mixed farming and natural pest control received far less support.
Smallholders manage 80% of Africa’s farmland and produce most of its food. Yet a new report by the Alliance for Food Sovereignty in Africa (AFSA) argues that the African Development Bank (AfDB), the continent’s largest ‘food security’ lender, has sidelined farmer-led and agroecological systems.
The study, dubbed ‘Who Is Financing the Future of African Agriculture,’ and researched by Dr Keiron Audain, analysed 20 AfDB-supported agricultural projects between 2019 and 2025.
It found that despite strong public rhetoric around climate resilience and food security, the Bank’s funding patterns have consistently favoured large-scale commercial agriculture.
“AfDB financing prioritised productivity, market integration and industrial commercialisation,” according to the report’s author.
While these investments improved infrastructure and logistics, the report said they offered limited support for diversified, low-input, community-led systems central to agroecological transformation.
At a time when Africa faces escalating climate shocks, biodiversity loss and food insecurity, AFSA said public finance cannot continue to support systems that deepen dependency, degrade soils and concentrate power in corporate hands.
“Africa does not need a blind expansion of industrial agriculture. It needs investment in agroecology, crop diversity, resilient seed systems and local food economies that strengthen sovereignty and community control,” said the civil society group.
Over the period under review, the report notes that the African Development Bank (AfDB) emerged as one of the continent’s most influential agricultural financiers.
Agriculture accounted for roughly 8–10% of the Bank’s total annual financing during that period, delivered through sovereign loans, grants and an expanding private-sector lending arm.
Since 2019, AfDB has financed major conglomerates, including DAL Group in Sudan with about US$240 million for food manufacturing, Ghana Cocoa Board with roughly US$38 million in trade finance, and the Export Trading Group (ETG), which received more than US$350 million for logistics and trading operations.
Other investments supported fertiliser distributors, commodity processors, warehousing facilities and cold-chain operators.
In 2022, agricultural commitments rose to about US$1.8 billion under the Feed Africa strategy, a 48% increase from the previous year, largely driven by the US$1.5 billion African Emergency Food Production Facility launched in response to global grain supply disruptions.
More than half of all agricultural approvals were concentrated in West and East Africa. West Africa saw major increases linked to regional corridors, staple crop programmes and Nigeria’s large-scale Special Agro-Industrial Processing Zones (SAPZ) initiative.
In East Africa, the portfolio included value-chain investments, climate adaptation programmes and crisis-response operations, such as wheat production support in Sudan and drought-related interventions in the Horn of Africa.
According to the World Bank, Nigeria topped the list with 24.2 million people facing food insecurity in 2025. It was followed by the Democratic Republic of Congo with 22.4 million, while Sudan ranked third with 14.6 million people affected.
Nearly half (49% of total Bank investments by 2024) of AfDB’s investments were labelled climate finance.
“Many of these operations relied heavily on high-input packages, mechanisation and large-scale irrigation promoted under a ‘climate-smart’ banner,” the report cautioned.
The findings raise concerns about growing dependence on purchased fertilisers, hybrid seeds and agrochemicals in the fight against food insecurity and climate change in Africa.
Partnerships with global development finance institutions, including the International Finance Corporation (IFC), European Investment Bank (EIB), Proparco, British International Investment (BII), FMO and the U.S. Development Finance Corporation (DFC), were found to exacerbate the trend.
The IFC alone approved 54 agriculture-related projects in Sub-Saharan Africa between 2019 and 2024, with average project sizes of US$40 million and several exceeding US$150 million. A notable example is a US$394 million syndicated loan for ETG in 2024, arranged by FMO and the Trade and Development Bank, with participation from DEG, FinDev Canada, Proparco and the OPEC Fund, alongside AfDB’s earlier investments.
Since 2019, these institutions have channelled more than US$3 billion into Africa’s agri-food sector, largely focused on agrochemicals, logistics, processing and formal retail systems.
“These partnerships reveal a coordinated DFI push to expand industrial agriculture and regional value chains,” said the report.
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