What has 3 Years of AFT Fund Brought us?

Today the AFT Fund celebrates its 3rd anniversary. The Fund was launched on the 8th of May 2013 and is a multi-donor trust fund managed by the African Development Bank (AfDB). They received funding (totalling US$ 23.80 million) from the United States Agency for International Development (USAID), the Danish International Development Agency (DANIDA) and the Swedish International Development Cooperation Agency (SIDA). The AFT is housed at the Agriculture and Agro-Industry department (OSAN) of the African Development Bank and their mandate sounds as follows:

The AFT will provide grant funding for the initial project development costs of a broad range of agriculture infrastructure projects spanning the entire value chain – from production to market. These can emanate from the private or public sector and from local or international businesses. The types of projects envisioned range from rural feeder roads to agro-processing and marketing facilities to out-grower schemes. The emphasis will be on projects that contribute to food security and support to smallholders.

According to their publications 4 grants have been awarded, totalling a combined value of just under US$ 2 million. Two were allocated to companies in Mozambique while the other two were scooped up by companies in Tanzania. A short summary of the lucky winners:

Mozambique:

  • Odebrecht Integrated Poultry Production and Distribution received a US$ 555,000 grant. We found the following statements on the AFT Fund website.

”Odebrecht seek to develop an integrated poultry production, processing and distribution division, Mozambique. The company has conceived the project as an anchor and it will be divided in 4 units along the poultry value chain: Crop Production (soy and maize at Farm Unit), Feed Production (Factory), Chickens farms (fertile eggs, Hatchery and Poultry), Slaughtering and processing (Abattoir).”

”AFT support will allow Odebrecht to complete a series of preparation studies, including: feasibility studies, environment and Social Impact Assessment and market research.”

Other than the above the AFT Fund published little information. Odebrecht is a Brazilian conglomerate with US$ 31 billion in annual revenue. They are wrapped up in the infamous Brazilian Petrobras corruption scandal, with their CEO earlier this year being sentenced to 19 years imprisonment.

  • EcoFarm’s Sugar Cane Estate Development received a US$ 797,500 grant. We found the following statements on the AFT Fund website.

”The company plans to work with three cooperatives that will be established to have “land-use rights” to 50% of the irrigated land. The sugar cane will be marketed through EcoFarm which will manage the harvesting, planting, haulage, fertilization and other mechanical operations from their own workshops to ensure that economies of scale ca be achieved for all role-players.”

”The AFT’s support will allow EcoFarm to undergo an environmental and social impact assessment.”

Again the information provided on the AFT Fund website is meager. A Google search takes us to Agdevco, which looks like a reputable organisation, yet doesn’t reveal much more information either.

Tanzania:

  • Tanga Fresh UHT Milk Factory received a US$ 150,500 grant. We found the following statements on the AFT Fund website:

”Tanga Fresh Ltd is a fresh milk producer currently operating fresh milk processing plant with a capacity of 50,000 liters/day of fresh milk. The company’s goal is to expand with a 40,000 liter/ day production line for Long Life UHT (Ultra High Temperature) Milk and a waste water treatment system.”

”The company will expand its production capacity in order to maintain the milk supply throughout the dry season. The AFT grant will allow the company to commission market research and development of a marketing strategy for the consumer market.”

The information on the AFT Fund website is yet again very thin. Tanga Fresh Ltd does have a website but at the time of writing hasn’t got a functioning news section, nor does their project section contain any useful information. Their last Facebook post dates back to December 2014.

  • Kijani Agro received a US$ 490,000 grant. We found the following statements on CNBC Africa.

”Kijani Agro is planning to have 3,000 smallholders benefitting from the project, 60 per cent of them women. The company has a training program to ensure that local farmers adopt rigorous standards for environmental and social practices.”

Kijani Agro website is under construction, yet we did find this presentation. The AFT Fund website does not seem to have published any update on Kijani Agro.

All-in-all there are various concerns, some of the key ones which I have highlighted below:

  • There seems to be no reporting, insight or any accountability on how the money has been spent and what the impact/results of the grants have been. Applications are not published and reporting on the awarding of the grant seems very thin. Should there be an evaluation focused on the effectiveness of the grants to establish whether the scheme should be improved and/or continued?
  • What is the additionality of the scheme in, for example, the Odebrecht case? Would the project/+impact not have been realised without funding from AFT Fund?
  • AFT Fund has, after being operational for 3 years, not published their annual report, despite a clear message on their own website stating that their report ‘will be uploaded soon’. An independent audit would be appropriate.
  • AFT Fund nor AfDB respond to any of our queries related to the fund.
  • AFT Fund has taken down their Twitter account (@AFTFund) less than two weeks after we started asking questions on Twitter.
  • AFT Fund does not respect their own deadlines and does not, at least in some cases, grant appeals to applicants when requested, despite their FAQ section clearly stating appeals are possible.

We have informed AFT Fund, AfDB, along with the donors DANIDA, SIDA and USAID of this situation. We will monitor future developments. To be continued…

Update: 10/05/2016: In credit of the donors; all three donors have indicated they are investigating the situation.

Update: 30/07/2016: We have spoken to all donors. No major discrepancies were found, yet improvements in several fields have been made. They have finally published an annual report, that of 2015, and provided additional details on their funded projects on their website. AFT Fund continues to be closely monitored.



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