MEDA recently announced its largest-ever project, heading up the $200 million Mastercard Foundation Africa Growth Fund project. That initiative will create 15,000 jobs in sub-Saharan Africa over the next five years. Hearing about a project of that scale may lead some people to wonder whether MEDA still needs their financial support. The answer to that question is a resounding yes, for several reasons.
First, all of the $200 million will be used in the seven targeted African nations — Senegal, Ghana, Nigeria, Ethiopia, Kenya, Uganda, and Rwanda. The project will invest $150 million in 20 investment vehicles that fund small and medium-sized businesses. Another $50 million will be used for support services such as business development training, support for gender lens investing, and results measurement. Returned funds will be re-invested as the initial investments mature over the next 10 to 15 years. That will help other companies grow and create additional employment opportunities.
Second, MEDA needs to raise $5 million from its individual donors as its contribution to the project.
Third, while the Mastercard Foundation Africa Growth Fund is the largest impact investing program of its kind, it is only a start. MEDA will need many other initiatives to achieve its strategic goal of creating 500,000 decent work opportunities in the agri-food sector.
Given the young average age of Africa’s people and projected population growth, many more jobs will be needed. A recent article highlights the importance of agriculture to sub-Saharan African economies. Business Daily (Africa) notes that agriculture employs 70 percent of Africa’s population. The sector accounts for almost a quarter of sub-Saharan Africa’s gross domestic product.
The story describes the challenges facing the agricultural supply chain. A lack of sufficient inputs, sustainable storage facilities and transportation services, limited market access, and limited training all prevent the sector from achieving its potential. All of these problems can be reduced and perhaps solved with better access to financing.
