We’re getting USD 271 mn from AfDB for food security
The AfDb is giving us USD 271 mn for food security: The African Development Bank (AfDB) given Egypt a USD 271 mn loan to boost food security and resilience this fiscal year in the wake of supply shocks brought on by the Russia-Ukraine conflict, AfDB said in a statement.
The breakdown: Some USD 174 mn of the funding is coming from the AfDB’s newly launched program to shore up African food security in the aftermath of war in Ukraine. The remainder will be funded by its multi-donor standalone support directed to Egypt from the bank and unnamed co-financiers.
There could be a whole lot more where that came from — for a total of more than USD 1 bn: The World Bank and the Asian Infrastructure Investment Bank could each chip in another USD 400 mn to the pot under the program, according to the AfDB document. The amount that the co-financiers would contribute is still subject to final negotiations, AfDB said.
Where the money’s going: The loan “will contribute to strengthening food security and resilience of the Egyptian economy, with particular emphasis on increasing national agricultural productivity, mitigating food security risks, and enhancing private sector and fiscal resilience,” according to the AfDB.
Including incentives for farmers + fertilizer producers: The program will support government moves to hike the price at which it buys wheat from local farmers to EGP 3.8k per ton, up 15% on last fiscal year, as well as other farming incentives, the AfDB document reads. It will also help support 30-50% tax breaks for green hydrogen and ammonia producers to increase fertilizer production, and a three-month freeze on the price of bread implemented by the government. The funding will also go toward strengthening private-sector food players and fiscal resilience.
REMEMBER- The World Bank has already pledged USD 400 mn to help fund state wheat purchases after prices spiraled on the world grain markets following the loss of key Ukrainian supply. Before the war, we sourced north of 80% of our wheat from Russia and Ukraine. France has also pledged EUR 100 mn to Egypt on food security and the Biden administration has pledged USD 50 mn earmarked for the same purpose as part of a bigger USD 1 bn initiative to shore up food security in this part of the world.