Delphine Traoré is CEO of General Insurance, Sanlam Allianz and Co-Chair of the B20 Industrial Transformation and Innovation Task Force

Africa’s agriculture’s potential to drive economic transformation and growth is strong. Yet in 2024, it contributed just 0.5% to African GDP growth, unchanged from 2023. Adverse weather conditions contributed to this stagnation, but it also reflects limited investment in climate-resilient infrastructure, drought-resistant seeds and sustainable water management.

There is certainly tremendous potential for viable investment in the continent’s agricultural sector. However, traditionally food and agriculture projects have relied on concessional finance or donor support which, along with high inflation and input costs, place considerable constraints on profitability.

Further, most investments focus on food processing and agribusiness supply chains rather than primary agriculture. Even then, we have yet to fully embrace the fact that by far the majority of African farming takes place on small holdings rather than on vast tracts of land.

Additionally, Africa continues to struggle with food insecurity, yet it has more than 60% of the world’s uncultivated arable land. The UN’s Food and Agriculture Organisation reports undernourishment in Africa rose from 16% in 2015 to 20.4% in 2023, contrasting with declines in Latin America and stagnation in Asia. Africa generates only 10% of global agricultural output, resulting in a $55 billion annual food import cost (2023).

This contraction contrasts with the sector’s focus on food security, rural development and the emerging recommendations of the B20’s Sustainable Food Systems and Agriculture Task Force recommendations on promoting sustainable agricultural practices. It underscores the need to align investment flows with development priorities, as well as apply new and more accessible finance models along with a simultaneous escalation of the digital revolution in agriculture.

Harnessing digital innovation and establishing partnerships with telecommunications, bancassurance and non-banking financial services companies can align and expand access to financial products and services for more individuals, particularly farmers and small enterprises.

Such partnerships are crucial for expanding access to rural areas with limited banking services. Smallholder farmers struggle to access insurance due to insufficient collateral, credit history, and information asymmetry.

Globally, 80% of smallholders lack insurance and in sub-Saharan Africa, 97% lack formal coverage. Sub-Saharan Africa’s agriculture is 95% rain-fed and highly vulnerable to climate shocks.

Digital initiatives such as index insurance and the Normalized Difference Vegetation Index (NDVI), which are scalable, cost-effective and data-rich, can help close the gap between technology and on-the-ground impact, making farming less risky.

Access would enable farmers of all shapes and sizes to benefit from bundled services, including insurance, credit and agricultural advisory assistance, delivered conveniently through mobile and banking networks.

These tools require investment in infrastructure, training and data access, topics that are also being addressed by the various B20 task forces.

Agriculture has received only 3% of global blended funds. Blended finance solutions are critical in mobilising private capital, mitigating risks and facilitating scale. Coupled with investment from development finance institutions (DFIs) and banks, these vehicles will transform the use of digital tools in African agriculture, unlocking data-driven decision-making for farmers and building climate resilience and improving food security.

We have already seen some examples that the collaborative approach required to boost farming investment is viable. In December 2024, SanlamAllianz, Atlantique Assurances, and AXA formed a strategic partnership in Côte d’Ivoire with the International Finance Corporation (IFC), providing risk-sharing tools and sustainability expertise. The IFC’s Global Inclusive Insurance Program (GIIF), co-financed by the German Federal Ministry for Economic Cooperation and Development (BMZ), provided concessional funding and technical assistance. This structure enabled private insurers to enter high-risk, low-margin markets while public capital absorbed first losses or funded capacity building.

The climate-resilient agriculture partnership in Côte d’Ivoire targeted smallholder farmers, providing weather-based index insurance to more than 50,000 farmers and agriculture-focused small and medium-sized enterprises (SMEs).

The initiative achieved several milestones. First, private insurers are expanding smallholder farmers’ access to affordable insurance while reducing risk in underserved markets. Second, it promotes food security by helping build resilience to climate change. Building on its success in Côte d’Ivoire, SanlamAllianz is scaling its index-based insurance offerings across the East Africa nations of Burundi, Kenya, Rwanda, Uganda and Tanzania.

Several steps must be taken to achieve the goal of the B20 Sustainable Food Systems and Agriculture Task Force, which is to focus on “promoting sustainable agricultural practices, improving supply chain resilience, and ensuring equitable access to nutritious food”.

First, the private sector will be pivotal in transforming finance into a tool for agricultural inclusion, co-creating blended funds targeting women and young farmers. Without inclusive finance, Africa’s agricultural potential will remain untapped.

Second, to accelerate the adoption of farm insurance, policies must be reformed and robust regulatory frameworks established. Governments and regulators must expedite regulatory “sandboxes” for agri-fintech to have an immediate impact.

Third, institutional coordination must align mandates and implement agricultural insurance agendas; its leaders need to embed financial inclusion metrics into B20 accountability frameworks.

Finally, creating unified data platforms for real-time claims processing and data-driven product design in agricultural insurance will require substantial investments in digital infrastructure.

These actionable steps, when implemented widely and collaboratively across Africa, have great potential to accelerate transformation and growth in agriculture. While historically there has been no shortage of good but externally-driven involvement in African agriculture, this B20 year provides us with a rare opportunity to coalesce around the action needed to implement these four strategies in a coordinated and impactful manner.