Strengthening Food Security: The Emerging Infrastructure Opportunity in Africa

Financing Food Security

Food security has evolved from a humanitarian issue into a mainstream investment thesis. About 2.3bn people faced moderate to severe food insecurity (FAO, Aug. 2025). At the same time, Africa imports roughly 40% of the food it consumes, exposing economies to external shocks and currency fluctuations. The World Bank estimates that the financing gap for agri-logistics across Sub-Saharan Africa exceeds $100bn, a gap that disciplined, long-term private capital is now increasingly positioned to fill.

What once seemed a developmental concern has become an economic imperative. Reliable food systems are essential infrastructure, and the assets that support them, storage, cold-chain networks, aggregation hubs and processing facilities, are investable in their own right. When capital scarcity meets structural demand, private credit and hybrid private equity offer a route to resilient, inflation-linked returns.

Banks Pull Back as Private Capital Fills the Gap

Conventional banks often hesitate to lend into agriculture. Revenues are seasonal, risk is multi-factorial, and collateral tends to be unconventional. Yet, as IFC research notes, agrifood value-chain financing is one of the most under-served but potentially resilient sectors in emerging markets. Specialist investors can structure loans secured against tangible assets, backed by long-term offtake contracts, and in some cases indexed to inflation.

Across Africa, private-capital engagement in food infrastructure is accelerating. In May 2025, the Africa50 Infrastructure Acceleration Fund acquired a stake in Morocco’s Mass Céréales al Maghreb, a port-logistics operator handling nearly half the country’s grain imports. It was a defining transaction: an infrastructure fund investing directly in food-supply logistics, not in farming. Similarly, the African Export-Import Bank launched its $2bn Export Agriculture for Food Security Initiative, spanning Chad, Malawi, Zimbabwe and Egypt, to finance production, aggregation and trade.

The logic is clear. Infrastructure that moves, stores and processes food is not speculative, it is fundamental. Private-debt structures with real collateral and contract-anchored revenue streams transform neglected sectors into bankable opportunities.

Ethiopia’s Food-Infrastructure Gap Becomes an Investment Frontier

Ethiopia illustrates the potential. Agriculture remains the backbone of the economy, contributing roughly a third of GDP and employing most of its population. Yet post-harvest losses remain stubbornly high, between 10% and 30% for major crops, due to limited storage, processing and logistics capacity (FAO, April 2024).

The policy shift towards private sector participation in logistics and processing (World Bank, March 2024). With domestic demand growing and infrastructure under-provided, Ethiopia’s mid-market project space, assets valued between €10M and €50M, is attracting attention from investors seeking exposure to essential-consumption infrastructure. These projects are typically too large for local banks and too small for development banks, creating an investable gap ideal for agile private-capital strategies.

Recent regional deals suggest a continental trend that Ethiopia is poised to join. Kenya’s government announced a $1bn “debt-for-food-security” swap to channel restructured debt into agricultural infrastructure. The European Union’s €90M agreement with Egypt will fund logistics and distribution upgrades. In West Africa, Nigeria and Brazil signed a $1bn agriculture-modernization pact. And in Ethiopia itself, Nigerian industrialist Aliko Dangote announced plans to build one of Africa’s largest fertilizer plants, a strategic industrial investment directly tied to agricultural productivity.

These developments point to a clear regional momentum: Africa’s food-security infrastructure is transitioning from donor dependence to private-capital engagement. Ethiopia, with its scale, demographics and agricultural base, is next in line to attract sophisticated investors prepared to combine commercial discipline with developmental impact.

Structuring Predictable Cashflows in Food-System Assets

Private-debt models in food infrastructure rely on tangible security and predictable revenues. Loans are collateralized by physical assets, warehouses, cold-rooms, transport fleets, and serviced through long-term offtake agreements with processors, distributors or exporters. Revenues can be indexed to inflation and, where feasible, denominated in hard currency. Additional risk management comes from insurance coverage, input hedging and geographic diversification. Increasingly, hybrid instruments such as mezzanine or convertible debt integrate social-impact metrics, linking investor return to outcomes like reduced post-harvest loss or lower emissions.

Such structures deliver the stability that traditional equity cannot always provide in emerging markets. They also align neatly with ESG frameworks, making food-security infrastructure one of the few asset classes where impact and income converge.

Managing Operational Risk Through Local Partnerships

Investing in food systems is an operational, not a passive, exercise. Success requires local knowledge, trusted partnerships and close oversight of management, logistics and supply-chain integrity. Investors must assess power reliability, transport corridors and offtake enforceability, factors that determine whether an asset remains productive through economic cycles.

Partnership-based capital, in contrast to extractive models, supports local operators and builds capacity. It aligns profit with productivity and sustainability. As one senior investor observed recently, “food security isn’t philanthropy; it’s disciplined investing in essential supply chains that sustain growth.” The principle applies acutely to Ethiopia, where collaboration and long-term perspective will define the first generation of private-capital entrants.

Food Security as a Long-Term Asset Class

For investors seeking real-asset exposure, food-system infrastructure offers inflation-resistant cash flows tied to essential consumption and low correlation with public markets. The sector remains underfunded, which translates into attractive risk-adjusted returns for disciplined investors. Equally, it satisfies environmental and social objectives without sacrificing performance, a rare alignment in global capital markets.

The next decade’s growth story will rest on productive assets that underpin economies: energy, data and food. Among them, food security stands out as both existential and investable. Across Africa, transactions in Morocco, Egypt, Nigeria and Kenya show what is possible when capital moves beyond aid into assets. Ethiopia, with its scale and unmet demand for logistics and processing infrastructure, now represents the frontier. For investors driven by fundamentals and partnership rather than speculation, it may soon become the continent’s defining opportunity, a signal that the conversation about food security and private capital is no longer theoretical, but imminent.