Minister of Planning, Economic Development, and International Cooperation Inaugurates IFAD Regional Workshop on Private Sector Engagement in Financing Food Systems Transformation

Dr. Al-Mashat: A constructive partnership with IFAD to encourage private sector investments in food security projects

Addressing food security challenges requires comprehensive strategies and collaboration among stakeholders

 

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, inaugurated the regional workshop organized by the International Fund for Agricultural Development (IFAD) under the theme "Engaging the Private Sector in Financing Food Systems Transformation."  The workshop was attended by IFAD officials, government representatives, and private sector companies. This event reflects the strong partnership between the Arab Republic of Egypt and IFAD, as well as the joint efforts to enhance food security.

 

The workshop aimed to explore ways to strengthen collaboration between IFAD and the private sector, discuss IFAD's private sector strategy which focuses on strengthening value chain partnerships, rural financing, and opportunities for public-private sector cooperation to enhance investments in sustainable food systems.

 

In H.E.’s speech, Dr. Rania Al-Mashat emphasized that the workshop provides a critical platform for exchanging ideas and perspectives among stakeholders from the Near East, North Africa, Europe, and Central Asia to discuss both current and future challenges in transforming food systems towards more sustainable models that contribute to the eradication of poverty and hunger.

 

H.E. Dr. Al-Mashat noted that food security is an extremely complex issue that can only be addressed through comprehensive strategies considering social, economic, and environmental factors directly or indirectly impacting access to sufficient and high-quality food. To tackle this interconnected issue, there must be continuous innovation and genuine cooperation among all stakeholders—governments, international organizations, civil society, and the private sector.

 

In this context, the private sector is a key partner in achieving the necessary transformation, as it plays a significant role in providing innovative solutions, offering technical expertise, and mobilizing financial resources to support and complement government efforts to achieve food security.

 

H.E. Dr. Al-Mashat pointed out that key development partners for Egypt, such as IFAD, play an essential role in this regard by providing innovative financial tools and risk mitigation mechanisms aimed at attracting private investment into rural development and food system improvement projects.

 

H.E. Minister Al-Mashat emphasized that these investments, supported by partnerships with international financial institutions, contribute to driving change in the agricultural and food sectors, improving the livelihoods of farmers and rural communities. Despite the opportunities available, significant challenges remain in increasing private sector participation in this essential transformation.

 

H.E. Dr. Al-Mashat highlighted the urgent need to address the existing financial gap, explaining that the funds required to transform food systems and empower smallholder farmers in rural areas are multiples of the financing currently available. In reality, it is not feasible to rely solely on public resources to close this substantial gap.

 

Over the past two decades, Official Development Assistance (ODA) allocated to the agricultural sector has remained steady at only 5 to 6% of total official development aid, equating to about $10 billion in recent years, a figure insufficient to meet the global needs of the agricultural sector. Simultaneously, studies show that investment in agriculture is one of the most effective ways to reduce poverty, as its impact surpasses that of investments in other sectors in terms of improving living standards and alleviating poverty in rural areas.

 

The Minister also reaffirmed the necessity of closing this financial gap and investing available capital more effectively by utilizing innovative financial instruments that encourage private capital to invest in these critical areas.

 

H.E. Dr. Al-Mashat highlighted Egypt's country platform for green projects, the "NWFE" program, a nexus of water, food, and energy projects. Through this platform, the government has collaborated with international financial institutions to develop innovative financing mechanisms that aim to attract private sector investment into green projects, using a mix of grants, concessional financing, and credit guarantees. This has led to significant private sector interest in renewable energy and agriculture projects.

 

H.E. Dr. Al-Mashat affirmed that these efforts align with Egypt’s strategy for transitioning to a green economy and enhancing food security. They showcase a model for encouraging private sector participation in sustainable development projects that benefit society as a whole and improve the living conditions of underserved communities in rural and remote areas. They also represent a decisive step toward achieving the SDGs and enhancing Egypt’s ability to address global environmental and economic challenges.

 

H.E. Dr. Al-Mashat also emphasized that, through partnerships with key development stakeholders in each of the program’s sectors, the government is actively working to enhance private sector involvement and attract investments in vital sectors.

 

H.E. Minister Al-Mashat added that the lack of data and effective communication hinders the ability to coordinate efforts and make evidence-based decisions. To address this issue, the Ministry of Planning, Economic Development, and International Cooperation has launched the "HAFIZ" platform, a hub for advisory, finance and investment for enterprises. This platform aims to bridge the information gap by providing various financial and non-financial services from development partners to private sector companies. The platform offers over 90 financial and advisory services, such as development finance, equity investments for startups, trade financing, guarantees, and other financial tools, as well as hundreds of local and global tender opportunities.

 

H.E. Dr. Al-Mashat concluded by emphasizing that investing in human capital can empower small producers and rural populations to establish connections with the private sector. This will improve their livelihoods and enhance their resilience to future challenges. H.E. noted that IFAD’s new private sector strategy and the Private Sector Financing Program (PSFP) model are initiatives that align with Egypt’s objectives. Through empowering, incentivizing, and aggregating private sector investments and partnerships, IFAD is directing private investments towards generating profitable financial returns with positive social and environmental impacts.