Compagnie Financière Africaine (COFINA) in Côte d’Ivoire and Senegal and the European Investment Bank (EIB) have signed a memorandum of understanding with the support of the European Commission to boost the development of sustainable agricultural value chains. The ceremony took place at the EIB Academy dedicated to SME banking and microfinance in West and Central Africa.
The agreement provides for the deployment of EIB long-term financing by COFINA Côte d’Ivoire and COFINA Senegal to the tune of €16 million and €10 million respectively, with the support of the European Fund for Sustainable Development Plus (EFSD+).
- Around 6 000 jobs in small and medium businesses (SMEs) and mid-caps will be supported by COFINA funding in Côte d’Ivoire and Senegal.
- This partnership, established with the backing of the European Union, aims to bolster the COFINA Mesofinance Group’s support for agricultural value chains, including cocoa, cashews and food crops in Côte d’Ivoire and cereals and horticulture in Senegal.
- The operation also includes ambitious targets for climate action, environmental sustainability and financial inclusion, especially for women.
This is among the first operations under the new 2023-2027 agreement between the European Commission and the EIB for financing the private sector in Africa, the Caribbean and the Pacific.
Technical assistance to better take into account the specific characteristics of female customers will be combined with this financing provided by the EIB with EU support. This cooperation will enable the COFINA Group to step up its financing to companies empowering women as entrepreneurs, managers, employees and consumers of products and services, thus increasing their participation in the economy, in line with the 2X Challenge initiative, whose criteria are aligned with the OECD’s gender objectives.
Financing of the economy in the West African Economic and Monetary Union (WAEMU) is now essentially based on the mobilisation of short-term deposits, which limits the financial sector’s ability to support the long-term development of businesses. Moreover, in the agricultural sector, improving business productivity and resilience to climate challenges requires the development of infrastructure that can only be amortised over time, such as in the areas of irrigation, mechanisation and storage. Agriculture has a seasonal production cycle, which means that investments take time to generate returns.
The long maturity of the EIB’s intermediated credit lines will extend the duration of the COFINA Group’s lending to the economy in Côte d’Ivoire and Senegal, and in particular will support the sustainable growth of the agricultural sector by providing companies active in this sector with the resources needed to invest, innovate and prosper.
By strengthening the agricultural sector, these funds contribute to the food sovereignty, reduced dependency on imports and economic stability of Côte d’Ivoire and Senegal, while promoting environmentally-friendly agricultural practices, adoption of modern technologies, and job creation in rural areas.
This first cooperation between the EIB and the COFINA Group is part of the European Union’s external action and comes under the Neighbourhood, Development and International Cooperation Instrument (NDICI). It contributes to the achievement of the African Union Agenda 2063 and the EU Multiannual Indicative Programme for Sub-Saharan Africa 2021-2027, which supports stronger regional and continental economic integration through inclusive, job-creating economic growth.
“Following the COVID-19 pandemic, the agricultural and agri-food sector must be supported to face the challenge of food sovereignty. It is in this perspective that the EIB’s partnership with the pan-African COFINA Group will have a real impact on the lives of entrepreneurs and SMEs in this strategic sector, both in Senegal and Côte d’Ivoire,” said Managing Director of COFINA Senegal Alassane Dia.
“As a mesofinance institution, this partnership will enable us in Côte d’Ivoire to expand our support to the agricultural sector, which has long been the driver of development for our country. In this way, we will be able to reach rural populations through cooperatives and associations. We aim to provide solutions that will enable them to automate their production chain all the way up to the crop processing stage and make them local champions,” said Managing Director of COFINA Côte d’Ivoire Amed Sié Touré.
“I welcome the European Investment Bank’s support for this infrastructure project to strengthen food security through the development of sustainable, proficient value chains such as cocoa, cashews and food crops in Côte d’Ivoire, and cereals and horticulture in Senegal. With this new financial and technical support, the EIB reaffirms its commitment to supporting its partners in Africa in their work for local people, especially women, and for the environment and climate. With EIB Global, our new branch dedicated to development and partnerships, we are strongly committed to supporting the European Union’s Global Gateway initiative to act as closely as possible to the people and in key areas for the African continent such as support to the private sector and innovation, the digital economy, renewable energy, water, agriculture and transport,” said EIB Vice-President Ambroise Fayolle.
“Obtaining bank financing remains a huge challenge for SMEs and the banking sector faces great constraints in supporting them. I am confident that the guarantee put in place by the European Union to enable the EIB to support the West African financial sector will help unlock a financing hub for Ivorian SMEs operating in the country’s key agricultural value chains, in particular cocoa, cashews and food crops. In this way, not only will new jobs be created but Côte d’Ivoire will strengthen its strategic food autonomy and resilience,” said EU Ambassador to Côte d’Ivoire Francesca Di Mauro.
“Against an international backdrop marked by a series of crises including COVID-19 and more recently the Russian war of aggression against Ukraine with its resulting market disruptions — in particular price increases — the Government of Senegal has reaffirmed its food sovereignty goals. In order to achieve these objectives, it is essential that public infrastructure investments be passed on by private investments along the agrosilvopastoral and fisheries value chains. Access to finance, including investment credit for cooperatives, SMEs and mid-caps, is critical, particularly in terms of gender and climate objectives. The European Union therefore supports this operation with EIB-COFINA in Senegal, trusting that it will provide an appropriate response and help reduce the private financing gap affecting value chains in Senegal,” said EU Ambassador to Senegal Jean-Marc Pisani.
