After investing more than $20 million in a concluded five-year country strategy focused on building local seed production capacity, the Alliance for a Green Revolution in Africa (AGRA) plans to invest up to $50 million (about Rwf60 billion) in a new strategy centred on growing small and medium enterprises (SMEs) to help advance Rwanda’s agriculture sector, The New Times understands.

The development was disclosed on August 12 by AGRA’s Regional Head, East and Southern Africa, Jean Jacques Mbonigaba Muhinda, during an interview with The New Times’ Emmanuel Ntirenganya.

The interview revolved around the agricultural implications of the new strategy that AGRA plans to launch on Monday, August 14, in Kigali, amid current challenges including climate change, and the impact of the Russia-Ukraine war which affected the agriculture sector, and the achievement of food security on the continent – Rwanda inclusive.

Excerpts:

Briefly, what does the AGRA country strategy entail?

Let me give you a quick background first. If you recall from the AGRF (Africa Food Systems Forum) Summit in Kigali in September last year, AGRA as an institution, launched a five-year corporate strategy at the institutional level. So, that corporate strategy sets up the objectives and the strategic plan for the next five years of investment across Africa in the countries where we work.

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Building on the corporate strategy, we now prepare a country-specific strategy.

AGRA has been in Rwanda for almost 16 years; this strategic plan we are launching now is the third generation of our five-year strategy.

The second strategy started in 2017 and ended in 2022, and this one is the third generation which is going to run from 2023 to 2027.

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The overall objective of this strategy is to build on the achievements of the previous strategy, in which we have invested more than $20 million in the last five years since 2017. In the last strategy, we focused mainly on building a seed system for Rwanda, in terms of supporting private seed companies producing more seed, commercialising the seed, marketing the seed, and even supporting the input distribution system so that those new technologies can be accessed by farmers.

So, that was the focus of the last five years. Now, moving into the new strategy 2023-2027, we are going to the next level of investment and focus on strengthening the capacity of small and medium enterprises (SMEs) engaged in agribusiness, mainly in the seed production, seed processing, seed marketing, other inputs, and other technologies, and even SMEs that are involved in market activities like off-taking, processing, storing, adding value, and so on.

By doing that, we will also be strengthening the capacity of those SMEs by enabling them to access finance, because one of the major challenges is actually to have those businesses thrive and become sustainable. And for them to be sustainable, they need to be able to develop business cases and use them to access finance from formal financial institutions like banks.

How much money will be invested in this new five-year strategy, and how will it help drive up Rwanda’s agriculture sector?

Let me first tell you that money is not the major issue, it’s not always the constraint. What is a constraint is actually the capability to mobilise partnerships with the institutions and the development partners who have even more money.

So, what we do in AGRA is to deploy what we call the catalytic investment, we use our little resources to bring on board donors who have more money. That’s number one.

Number two, in the new strategy, we are going to have a particular emphasis in terms of creating work opportunities for young people, especially young women. So, job creation is going to be a major focus in the next strategy – creating an environment that offers employment opportunities for young people in the agri-food sector and different crop value chains in general.

We are lucky that we are getting partnerships that are supporting us in financing, in resource mobilisation. We have a partnership going on with our traditional partners including USAID, Bill & Melinda Gates Foundation, we are building a very strong relationship with Mastercard Foundation in Rwanda and across other multiple countries, and we are planning actually to invest between $40 million and $50 million in the next five years in Rwanda, which is going to be more or less double compared to what we invested in the last strategy.

What are the major components of the strategy?

It’s going to have three major components. Number one, we are going to support SMEs that are into input production to scale up their businesses, like how we can support seed companies that have already been producing seed to be sustainable and produce more because we still need more, not only for the Rwandan market but also for the export market.

Component number two is access to finance. We are going to work with financial institutions like banks to make sure that we design appropriate products that meet the need of the value chain actors, you know farmers, agro-dealers, input distributors, processors, off-takers, and so on.

Another strategic pillar is actually going to focus on enhancing the capability of government to coordinate the partners and the private sector, and creating an enabling environment for more resources to flow into the agriculture sector in terms of investment.

And lastly, we are going to invest a lot in business development services so that those SMEs are able to develop bankable projects, which they can submit to the banks and access resources (funding).

We have a plan to support over 500 agribusinesses in the next five years, and we also have a plan to work with those partners to reach 1.5 million farmers, and we are also finalising a plan to create 132,000 dignifying and fulfilling work opportunities for young people in Rwanda.

What are the challenges that constrain Rwanda and Africa’s food systems as a whole, and how will the strategy help to tackle them?

Three major challenges: climate change, the conflict between Russia and Ukraine, and the lingering consequences of the Covid-19 pandemic. And those challenges do not just apply to the continent but also Rwanda as a country.

Climate change has been a major issue. You must have seen even in Rwanda the seasons are changing.

We are actually seeing statistics and data showing that agricultural productivity in Africa is reducing nearly by 34 per cent because of climate change for the last 50 years. That’s a big problem. So, we need to build systems that are resilient to climate change shocks. That’s number one.

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Number two, it has been the whole issue of input prices. You remember when the Russia-Ukraine conflict started last year, the whole market for fertilisers became a big problem. And this (Africa) is a continent that imports 90 per cent of the fertilisers from outside. And of that 90 (per cent) 80 (per cent) comes from Russia, Ukraine, and Belarus.

As a result (of Russia-Ukraine conflict), fertiliser became a big problem; the prices were multiplied by two and three times in some contexts, and farmers could not access it. That has also eroded some gains that we had achieved as a continent.

So, what we are talking about today, is really getting alternatives for substituting the importation of input from those countries and building the capacity to produce the input locally in Africa.

We are working very closely with the African Union to make sure that we find a local solution that helps the continent reduce importation.

We have a business line on sustainable farming in the crosscutting area of building resilience. As we support the SMEs, we are supporting them to be sustainable and resilient at the same time.

As we support the farmers, we continue promoting technologies like seeds that are resistant to drought, for instance, seed varieties that are resistant to floods like soil fertility management, [and] soil health development. As you build soil health, you reduce the dependency on fertiliser use.