AFRICA – The Export Trading Company (ETC) Group is set to receive a US$150 million financing facility from the African Development Bank (AfDB) aimed to address its working capital requirements and support its food production expansion plans across 10 countries in Africa, in a boost for smallholder farmers.
The investment, approved by the Board of Directors of AfDB will take the form of a trade and agri-finance package comprising a US$75 million soft commodity finance facility to support the group’s pre and post shipment working capital requirements, with a particular focus on export-oriented activities.
It also includes a US$75 million agriculture value-chain program to increase agriculture production and productivity, by providing improved agricultural inputs and agronomic advisory services to local farmers.
ETC is a pan-African agriculture conglomerate with a footprint expanding across Sub-Saharan Africa, North America, Europe, Middle East, and Southeast Asia, trading millions of tons of commodities in various agricultural value chains (cashew nuts, sesame seeds, pulses etc.).
The ultimate beneficiaries of this intervention will include smallholder farmers, a significant number being women and youth entrepreneurs across 10 African countries, whose productivity is expected to increase from the deployment of high-quality agricultural inputs. Rural women will also benefit greatly from this intervention.
Commenting on the loan, African Development Bank Vice President, Agriculture, Human and Social Development, Dr. Beth Dunford, said, “Working with an African agro-champion like ETC was critical towards achieving the Bank’s developmental goal to support millions of small holder farmers across the continent and contribute to increased agriculture production and food security, in the process”.
The investment will go a long way in contributing to food import substitution by allowing ETC to process and package agricultural products locally while increasing value-addition of export-oriented products.
Director General of the Bank’s Southern Africa region, Leila Mokadem noted: “The advent of COVID-19 has caused major disruptions in agricultural value chains worldwide. The proposed facility will therefore be a key enabler in supporting ETC’s build-back strategy on the African continent, specifically in LICs and Transition states”.
ETC Group’s operations cover 26 African countries. Their business activities cover agricultural inputs, cash -traded products such as pulses and rice, exchange-traded products, logistics, and retail consumer goods.
The financing comes months after ETC Group clinched a US$70 million working capital loan from Dutch development financier FMO.
This follows the agriculture trader receiving US$100m debt commitment from CDC Group, a British development finance institution and impact investor.
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