Africa: Closing the Capital Gap – Strategic public-private partnerships invest in young agricultural entrepreneurs

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NAIROBI — The global aid system is collapsing amid chronic underinvestment in rural areas, posing a systemic threat to food systems everywhere.

With 1.3 billion Youth In today’s world – the largest generation in history, nearly half of whom live in rural areas – investing in their entrepreneurial potential is key.

Speaking during a press conference on February 10, 2026 in International Fund for Agricultural DevelopmentInvesting in young entrepreneurs and women farmers opens new pathways to employment and ensures that rural areas become thriving engines of stability, prosperity and sustainable growth, said Alvaro Lario, Chairman of the Board of Governors of the International Fund for Agricultural Development (IFAD), at its 49th session.

The main theme of the current session of the Board is “From Farm to Market: Investing with Young Entrepreneurs” and it takes place at a pivotal moment when the global aid system urgently needs to be reinvented.

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“We are going through a very complex period of geopolitical fragmentation and limited budgets for many countries. Food systems go through different regular shocks including climate shocks. So, rural transformation means economic growth, job creation, and building stability,” Larrieux said.

Lario called for public-private partnerships that link farmers with private companies, which invest directly in small and medium-sized enterprises through blended finance, guarantees, and various forms of debt or equity, ultimately increasing access to rural finance. Public financing alone cannot transform food systems, increase incomes in rural areas, or create decent jobs.

President of the International Fund for Agricultural Development, Álvaro Lario, with Tony Elumelu, President of UBA, Heirs Holdings and founder of the Tony Elumelu Foundation. Source: International Fund for Agricultural Development/Hannah Catherine Vallis

SME-driven value chains are crucial for rural development. The Fund’s evaluations show that value chain projects focused on SMEs are more likely to achieve transformational impacts – in other words, increasing income by more than 50 percent because of the project. the Rural income through exports project in Rwanda (PRICE) has increased farmers’ returns through the development of export-based value chains in the areas of coffee, tea, silk farming and horticulture.

In sum, he said that the private sector accounts for more than 90 percent of global food system activity, and that it complements public sector financing in a crucial way by providing technology, market access, and logistics. Emphasizing that these are the elements that allow small farms, pastoralists, fishermen, rural entrepreneurs and other agri-food enterprises to grow and prosper.

Overall, at the Board of Governors, Lario emphasized the enormous strategic and commercial value of investing in rural economies, presented new impact data and priorities for 2028-2030, and identified the most effective models for scaling productive investments. He was joined by Tony Elumelu, President of the United Bank for Africa and Heirs Holdingsand founder Tony Elumelu Foundationin defining a new deal for rural economies.

They spoke at length about how to accelerate the transformation to direct more private investment into rural economies. Regarding young African entrepreneurs and facilitating their access to financing, he said that in light of its current formation, the bank cannot lend without guarantees and taking into account social repayment.

“Since the regulatory environment does not allow banks to lend without taking these issues into account, countries are creating development finance institutions that can take some of the risks,” Elumelu said. “Also, the presence of development finance institutions and global finance helps remove transaction risks so that banks can step in and provide capital.”

“One of the reasons my wife and I started the Tony Elumelu Foundation is to support young African entrepreneurs. Access to capital is critical to entrepreneurial development. But too often, people don’t have what it takes to access it. The Foundation has provided $100 million. Every year, we identify young African entrepreneurs with business ideas and coach them on how to make those ideas a reality.”

Also emphasizing that access to capital, “while important, it is not the only requirement that will make you succeed. Business education is important. So we train them, assign them mentors, create a networking platform, and then provide them with the knowledge they need to access capital. So far, in Africa, we have funded more than 24,000 young African entrepreneurs. The good news is that about half of these people are female.”

Elumelu said youth-focused interventions significantly promote agri-entrepreneurship as a key driver of economic growth, job creation and stability while addressing the youth opportunities deficit.

“Nearly 21 percent of funders in Africa are in agriculture and agribusiness. And of those 21 percent, about 5,600 beneficiaries, 55 percent of them are female. So, in some way, we are trying to help bridge the capital gap, the financial gap. But it is not enough. It is just a small drop in the ocean. So we need more partnerships.”

Elumelu also drew on his philosophy of African capitalism, a call to action for companies to move beyond the pursuit of short-term profit and instead make investments that generate social and economic benefits for the communities in which they operate. His foundation’s decade-long experience building Africa’s largest entrepreneurship ecosystem speaks to how entrepreneurship, private capital, and market-driven solutions can transform rural economies, expand food systems, and close the youth opportunity gap.