Development Banks Drive Industrial Farming in Africa, Report Finds

Understanding The Role Of Dfis In The African Green Revolution

Public development banks are steering Africa toward large-scale industrial agriculture at the expense of small farmers and food sovereignty, according to a new study by the Alliance for Food Sovereignty in Africa.

The report details how Development Finance Institutions (DFIs) have invested over $3 billion directly in African agribusiness since 2019, accelerating a shift toward export crops, supermarket chains, and chemical-intensive farming.

Six major DFIs including the World Bank’s IFC, African Development Bank, and European-backed institutions dominate this funding.

Their financing supports fertilizer suppliers, food processors, and retail giants expanding into urban centers. One clear trend is what researchers term “supermarketization,” where DFI-backed cold chains and logistics infrastructure favor formal retailers while sidelining traditional markets and small-scale vendors.

Much DFI capital flows through hard-to-trace intermediaries. Private equity funds received significant support, with firms like Adenia Capital using development money to consolidate Kenya’s grocery sector through acquisitions.

Similarly, trading giant ETG obtained over $1 billion from DFIs since 2018 for infrastructure projects that prioritize commodity exports.

“Public money is expanding global agribusiness reach while marginalizing those these funds claim to help,” said Dr. Million Belay, AFSA’s General Coordinator.

The report criticizes climate finance being diverted to industrial “climate-smart” projects and notes the Gates Foundation’s alignment with DFI strategies promoting high-input technologies.

Researchers documented concerning power imbalances. In outgrower schemes connecting smallholders to processors, DFIs position themselves as honest brokers despite fundamentally representing investor interests.

The trend continues despite evidence from South Africa showing supermarket consolidation depresses farm prices and increases supplier costs.

The alliance calls for redirecting funds toward agroecology and locally controlled systems. They demand greater DFI transparency, particularly regarding financial intermediaries, and stronger accountability mechanisms.

“Africa’s food future must be determined by Africans,” Belay emphasized, urging scrutiny of foreign capital’s influence on local food systems.

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