Development finance strategy draft in an EMDE country from the perspective of a development practitioner in an international financial institution. In this case we choosed African development Bank for the simulation.

1. African Development Bank
By Willy MBARGA Development practitioner Afbd’s local office in Zambia
Unlocking Investment and Finance in Emerging Markets and Developing
Economies (EMDEs)
improving livelihoods of small-holder farmers in
ZAMBIA
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2. AGENDA
I. Context
II. What are the development goals of your project?
III. What are the existing sources of finance available to you?
IV. What additional sources of finance could you have potential access to and
how will you access these?
V. How would you apply a Maximizing Finance for Development approach to
financing your project?
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3. Context
For decades, Zambia’s economy has relied on copper mining, a capital-
intensive industry that suffers from price volatility and employs only 2 % of
the country’s population. In contrast, almost half of the population is
employed in agriculture, a sector that contributes only 8.2 % to GDP. Despite
40 million ha of arable land, an abundance of groundwater resources, nutrient-
rich soil, and low population density, Zambia’s agriculture sector has not yet
reached its full potential.
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4. Project Development Goals
The government recognizes that increasing agriculture and agribusiness are
critical for improving incomes and food security, reducing poverty, and creating
a more diversified and resilient economy. For this, a significant boost was
required.
The African Bank of development has supported the Zambian government with
reforms to reduce regulatory constraints to investment, promote the
commercialization of agricultural activities and increase available finance for the
project
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5. Existing source of Finance
The African Bank of Development also reached Zambia’s agribusiness sector through
investments and guarantees, namely:
• ZANACO invest $25 million senior loan to increase financing for agribusiness and
other small and medium-sized enterprises (SMEs).
• Zambeef invested $30 million Products to help expand its agribusiness.
• Chayton Atlas Investments (CA), a private equity fund, with a $ 5.1 million guarantee
for its investment into Chobe Agrivision Company Ltd. A further $9.5 million guarantee
was provided 2012 to cover expansion
guarantees, totaling nearly $70 million, to expand its operations and mitigate
acquisition risks.
• MIGA support agribusiness investors by providing $31.4 million in guarantees to
Silverlands Ltd., a foreign investor, for its ranching and other agribusiness investments
in Zambia
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6. Additional sources of finance
The African Bank of Development, in concert with the many donors operating in
Zambia, have improved agriculture yields and outcomes for the local community.
IFC’s investments in ZANACO led to 451 outstanding loans to SMEs totaling more
than $50 million and 872 outstanding microfinance loans totaling more than $12.7
million.
Support to Chayton Africa created 516 jobs—37 filled by women—who enjoyed
monthly incomes nine times the area’s average. Support has also reached nearly
2,000 farmers, generated $300,000 in annual payments to the Zambian government,
supported $41.4 million in annual domestic purchases, and provided food to over
450,000 people.
MIGA’s support to Silverlands led to the employment of 274 permanent staff and
management involving 11,740 hectares of cropped land. By 2017, Silverlands
operated
14 community cattle-dipping facilities, performing 35,000 dippings per month. This
reduced cattle mortality from 9 to 2 percent and led to an increase of $500 per year
in family incomes.
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7. 7
Financing Development Approach

8. Financing Development Approach
1.Mapping of the current macroeconomic context and financial macro-indicators, and
analysis/forward-looking projections as to how different financing flows are likely to
change;
2.Review of a country’s fiscal policy environment, to assess fiscal space and the
capacity to issue new debt obligations;
3. Amounts allocated to different sectors/issues from both domestic public resources
and external public and private finance;
4.A review of national policies and strategies in the development finance arena and the
extent to which these plans are being effectively realized (or are experiencing
difficulties);
5.Analysis of how financing flows are changing over time;
6.Mapping institutions with key responsibilities in the budget cycle (planning, execution,
monitoring, auditing etc.).
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9. Maximizing approach to financing the
project
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Once obstacles to private investment were identified, such as a poor enabling
environment (notably the investment climate), the African Bank of development
set up a collaborative approach. Combined with the government’s willingness to
address obstacles and work with farmers, this led to significant progress. Access
to finance for poor farmers was, in particular, an important factor in attracting
private sector investments to the agriculture sector.