00:02Turkish Airlines presents Business Africa
00:11Welcome to Business Africa. I'm your host Afolake Oyn Lui, the top stories this week.
00:17How can Africa bridge the gap between ambitious commitment and the capital needed to scale businesses? We'll find out shortly.
00:27After 15 years off the tracks, Kinshasa's commuter train returns, offering relief in one of Africa's most congested cities.
00:39Rising fuel prices push Kenya's motorcycle riders toward electric bikes as local manufacturers race to build an affordable EV industry.
00:50At the Africa Food System Forum in Kigali, one question is taking center stage.
00:55How can Africa turn commitments to transform agriculture into capital that actually reaches the agro-SMEs feeding the continent?
01:03The focus is shifting from simply mobilizing finance to building a stronger bridge between policy, investment and businesses that actually
01:11need it most.
01:13As Africa's food systems take center stage in Kigali this week, one question looms large.
01:20How do we turn commitments to transform agriculture into capital that actually reaches the businesses feeding the continent?
01:28At the forum where governments, investors and development partners gathered around the theme of investing in Africa's agri-food systems,
01:37the challenge is increasingly clear.
01:40The problem is not simply a lack of capital.
01:43Thousands of African agri-SMEs sit in a missing middle, too large for microfinance, yet still considered too small and
01:52risky by international investors.
01:56The answer is to build the bridge between policy and investment.
02:01That means helping businesses strengthen their financial models, governance, climate data and ESG systems, while using guarantees, concessional finance and
02:12technical assistance to address the risks that keep commercial lenders away.
02:17And this is where blended finance becomes critical.
02:21Risk-sharing mechanisms can give banks the confidence to enter agricultural markets they might otherwise avoid.
02:28But the ultimate test is not how much public money is deployed.
02:33It is where the commercial banks keep lending when that support ends.
02:37Because if they do, Africa will have achieved more than financing individual enterprises.
02:46We're joined by Dr. Mali Fufana, Deputy Executive Director and the Head of the Directorate for Green Growth Implementation at
02:53the GGGI.
02:54Welcome to Business Africa.
02:56Tell us, why is international capital still failing to reach local agri-enterprises that are actually driving Africa's food systems?
03:05So there is several reasons for this.
03:07For the first, agriculture carries a lot of risk.
03:09We talked about mitigation, which is really simply for investors, very easy to invest and put money in.
03:14But when it comes to adaptation, especially when it comes to agriculture, the risk is very high.
03:18So we have the climate shock, the price volatility, you know, current risks as well.
03:24Constrainted, in fact, minding the supply chain that make that risk much more higher.
03:27The second aspect is that many local SMEs are not yet investment ready, right?
03:32They may have a strong business model.
03:35They also have lack of audited account or history with reliable financial data with the commercial banks, but also governance
03:42systems that are really poor.
03:44So those are really also obstacles when it comes to the SME pros.
03:47And the third part is just the transaction costs can be too high.
03:51At the international investors, they may be willing to really put and make a large investment in those companies.
03:57But when they're finalizing the assessing or the monitoring, you know, doesn't a small business is much more difficult because
04:03really the financial cost is very high.
04:05How is GGGI helping early stage SMEs to access commercial finance and become more bankable?
04:12We start with the business itself.
04:14You know, is the business more viable?
04:16You know, are this cash flow clear or does the company have the right governance and it's going to demonstrate
04:22the climate impact?
04:24So once we understand those gaps, we can provide targeted support to improve investment readiness.
04:29That can include financial modeling, business planning, governance, ESG system, climate data and climate rationale, which is quite important and
04:37support the structure transaction itself.
04:39But I will make one point very clearly there that the de-risking doesn't mean removing all the risk from
04:45the private sector.
04:45It's me identifying which risks are preventing investment and determining who is the best place to manage it, but also
04:53sometimes that require constitutional finance.
04:55We heard a lot about that.
04:56They require guarantee, but also technical assistance.
04:59So sometimes the solution is simply helping the company to become better prepared for commercial lender.
05:06The other important element is scale because we have a lot of small businesses, but in order to move to
05:11scale is quite difficult.
05:12So we do don't want to create what I would call investment company at the time.
05:18We want to build a pipeline of credible African businesses that financial institutions can understand in finance.
05:25And ultimately, the test is whether the bank continues lending when the development partner steps away.
05:30Now, how can blended financing change commercial bank approach and unlock more agricultural lending across Africa?
05:37So a well-designed guarantee or risk-sharing mechanism can change that equation.
05:43It can give a bank enough confidence to enter to the market that would be also otherwise avoided.
05:48But we should also be clear that guarantee alone will not solve the problem.
05:53Banks need data, better data as well.
05:56They need product that matched agriculture cash flow.
05:59They need also a strong relationship with the value chain actors and also understanding the climate risk better.
06:04So from our side, I think it's really good to look at what are the best elements to take into
06:08consideration.
06:09And the SMEs needs to become more transparent and investment ready.
06:12So I see blended finance as a catalyst, not as a financial solution.
06:17The real objective is to use public and concessional capital to demonstrate that this market can work and then can
06:24bring increasing amount or commercial capital.
06:26There's also a question of how it brings standards as well, because if every transaction requires a completely new structure,
06:36we will never achieve the scales that we want, because every transaction and financial model will be not easy to
06:42replicate.
06:43And that's why we want to make that reputation across countries, but also bring that cross-coordination.
06:48Dr. Fufana, it's been a pleasure having you on the show.
06:51Thanks very much.
06:51Dr. Fufana, it's been a pleasure.
07:21But for 15 years, its railway sat abandoned, leaving commuters stranded in massive traffic jams on minibuses or paying hundreds
07:31of dollars each month for motorcycle taxis.
07:35Now, a single restored train connects the airport outskirts directly to downtown in 75 minutes.
07:47Between 4,000 and 5,000 passengers are transported per train.
07:54If these passengers were now to go by road, it would cost us an enormous amount of time and cause
08:00traffic jams.
08:05Like mass rail investments in Lagos and Dakar, this restored line is the pilot for Metrokin, a planned 300-kilometre
08:14urban network backed by the Africa Finance Corporation.
08:21I have to spend roughly $380 on transport every month.
08:28It's tough.
08:29I was starting to think about leaving Canggu and looking for a place costing $300 to $350 closer to town
08:39because of the transport problems.
08:41But when they restarted the train service, I dropped that idea.
08:48City officials plan to double the train's daily trips soon as partners finalize financing to build out the full Metrokin
08:58network.
09:02And there is more positive news from the transport sector.
09:06Rising fuel prices are accelerating Kenya's shift toward electric vehicles, with motorcycle riders and drivers increasingly turning to EVs.
09:14Local manufacturers are also stepping up, looking to make electric mobility more affordable while tapping into Kenya's abundant renewable energy.
09:24In Nairobi, rising fuel costs are changing the way Kenyans move.
09:29For motorcycle taxi rider Zak Okof, the switch to electric is about saving money.
09:36And with 300 shillings, I can run 100 kilometres.
09:39You see that?
09:40Compared to the fuel, fuel you'll put 1 litre, 221.
09:43It will only take you, per litre, you'll only go 60 kilometres.
09:47Electric motorcycles are already gaining ground.
09:51Now, Kenyan manufacturers are betting on electric cars.
09:55Tedese Tesema founded Tad Motors in 2023, aiming to build Kenya's first locally made electric cars.
10:03His target?
10:04Affordable EVs designed for African roads, including higher ground clearance and generators for places without charging infrastructure.
10:14There is enough talent and technology so that we will be independent with our transport issues.
10:24We think that Africa must solve its own transport issue.
10:27So we made custom-made cars based on local situations.
10:30Market leader Spiro alone built more than 15,000 electric bikes in the first seven months of 2026,
10:39part of a rapidly growing fleet operating across multiple African markets, including Rwanda, Uganda, Nigeria, Benin and Togo.
10:48The shift is also creating jobs.
10:50The electric shift could mean cheaper transport, new jobs and less reliance on imported oil.
10:58That brings us to the end of this edition of Business Africa.
11:03For more business news and updates, stay tuned to Africa News or visit us online at africanews.com.
11:09See you soon.
11:17Business Africa was presented by Turkish Airlines.
11:20Business Africa was presented by Turkish Airlines.
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