The launch of the Innovation Fund for Agricultural Transformation (IFAT) took place as part of the Side event of the Sub Saharan Africa Challenge Program (SSA CP) at the 6th Africa Agriculture Science Week in Accra, Ghana.
The IFAT concept was designed to address the issues of affordable credit that have hampered the development of Africa’s agriculture and inhibited the transition from subsistence farming to small scale production enterprises. The lack of affordable financing has also affected the competitiveness of a lot of commodities produced in Africa compared to what is produced in Asia and the West. These circumstances have highly limited the market reach for African commodities and resulted in obstacles to the strengthening smallholder livelihoods.
As a sustainable way out of this situation, FARA has developed the IFAT concept. It builds on a number of financing experiences in many parts of Africa. IFAT aims to provide finance for agricultural production at a single digit interest rate. It targets smallholder farmers and small scale enterprises all along the agricultural commodities value chain. The IFAT funding is integrated within the innovation platform concept.
To overcome the problems of poor governance that have hampered many other previous financing initiatives, the management of the fund is handled by a commercial bank, while the governance is to be carried out by a steering committee that is comprised of different categories of agricultural research and development stakeholders.
The funds needed for IFAT could be sourced from a number of places, principally the private sector, which could be requested to contribute a fraction of their corporate social responsibility funds to the pool for agriculture. The IFAT fund is revolving and it is based on cropping season. in that regard it could be used more than once in a year and acquire stability against moderate inflation rate increases.