Connecting Capital within African Agrifood Systems

This report by the Climate Policy Initiative (CPI) analyzes the systemic misalignment between investor capital allocation and the operational realities of African agrifood enterprises. Drawing on data from 23 agribusinesses and 17 climate finance vehicles, the report identifies gaps in geographic distribution, value chain focus, and crop types, arguing that technical assistance (TA) must be applied at both the vehicle and enterprise levels to effectively mobilize capital for climate adaptation and food security.

• A systemic misalignment exists between investor mandates and the realities of agribusinesses, rooted in investor return expectations, underdeveloped local financial markets, and policy environments. While enterprise-level technical assistance (TA) improves investor-readiness, it is rarely sufficient on its own to change the risk-return profile of a deal; complementary TA at the vehicle level is required to make projects bankable.
• Investment activity is geographically concentrated in markets with more developed financial infrastructure and SME ecosystems, specifically Kenya, Nigeria, and Uganda, which represent nearly half of all engagements. This creates a gap where the most climate-vulnerable countries receive the least support; for instance, Africa's ten most vulnerable countries received only 11% of climate finance flows in 2024.
• There is a mismatch in value chain focus: finance vehicles concentrate on upstream production (such as on-farm adaptation and smallholder lending) because these offer measurable outcomes for concessional capital. Conversely, enterprises often operate end-to-end across the value chain to secure market routes and reduce disruption, meaning vehicles mandated only for upstream production may exclude these enterprises.
• Investor preference for export-oriented, hard-currency value chains leads to a dominance of cash crops, such as coffee and cacao, in finance vehicle mandates. In contrast, staple crops like maize, rice, sorghum, and millet—which are critical for food security—operate on thinner margins and have thinner, more concessional financing architectures that are smaller in ticket size than those for cash crops.
• Mobilizing commercial capital and supporting food security are distinct goals requiring different vehicles. Commercial vehicles favor scalable cash crops, while advancing food security and resilience requires concessional, grant-based, or public funding. Blended finance is identified as a key mechanism to align multiple investor mandates and channel investment into underserved markets.

APA

Climate Policy Initiative (2026). Connecting Capital within African Agrifood Systems. https://www.climatepolicyinitiative.org/publication/connecting-capital-within-african-agrifood-systems/

Chicago

Climate Policy Initiative. Connecting Capital within African Agrifood Systems. 2026. https://www.climatepolicyinitiative.org/publication/connecting-capital-within-african-agrifood-systems/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Connecting Capital within African Agrifood Systems |date=23 June 2026 |url=https://www.climatepolicyinitiative.org/publication/connecting-capital-within-african-agrifood-systems/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2026connecting, author = {{Climate Policy Initiative}}, title = {{Connecting Capital within African Agrifood Systems}}, institution = {Climate Policy Initiative}, year = {2026}, month = jun, url = {https://www.climatepolicyinitiative.org/publication/connecting-capital-within-african-agrifood-systems/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }