Supply Capacity - AfDB

The growing role of the private sector in achieving sustainable development and poverty alleviation is evi­dent worldwide. The African Development Bank considers private sector development a major objective of its development activities. The Bank addresses private sector development at two primary levels:

• African Governments to improve the enabling environment for the private sector (physical infra­structure and regulatory frameworks);
• Creating catalytic and demonstration effects by assisting entrepreneurs with specific transactions (infra­structure, industries and services, and financial intermediation).

The Bank’s Agriculture and Agro-industry Department focuses on activities in the agricultural and rural development sectors, including irrigation, livestock, fisheries, forestry, natural resources and environmental management. It is also charged with building Bank capacity and operations in agro-industry. Half the Bank’s active operations portfolio comprises projects in this department. It is estimated that about 60 per cent of the investment is in infrastructure.

This facility would serve as a vehicle for financing various activities: (i) helping public and private sectors conduct feasibility assessments and secure financing for promising fertilizer production ventures; (ii) Improv­ing the economies-of-scale of fertilizer production, procurement and distribution; (iii) boosting fertilizer demand by extending credit guarantees to farmers and suppliers; and (iv) exploiting other opportunities in the value added chain.

Financial sector development is paramount to successful and sustainable economic development. Indeed a more effective formal financial system will contribute significantly to a better allocation of resources for investments, while an improved access to financial services for the poor and the rural population will help alleviate poverty.