African Food-System Leaders Back Market-Led Model to Scale Agricultural Investment

KIGALI, Rwanda, African agriculture does not suffer from a shortage of promising projects. The harder challenge is turning them into businesses that can survive after grants, pilots and development funding end.

That was the central message emerging from a leadership breakfast convened by PepsiCo and RTI International at the Africa Food Systems Forum in Kigali, where representatives from business, government, development finance, philanthropy and agriculture examined how public-private partnerships can move beyond short-term interventions and build commercially durable food value chains.

The discussion centred on a simple principle: agricultural investment should begin with a credible market opportunity. That means establishing demand and offtake before capital is deployed, aligning incentives across the value chain and ensuring that farmers can participate profitably. Public and philanthropic capital can then be used where it is most valuable: reducing early risk, strengthening infrastructure, building capability and helping promising models reach the point where commercial finance can take over.

Ethiopia offered one of the clearest examples.

In 2024, the U.S. Government-funded Ethiopia Transforming Agriculture (ETA) activity, implemented by RTI International, launched an initiative to increase potato production by strengthening market access through rural technologies (SMART) in partnership with PepsiCo Foods Ethiopia. Implemented in partnership with EUCORD, SMART addresses key weaknesses in Ethiopia's potato value chain, including limited access to quality seed, fragmented supply systems, and weak linkages between producers and commercial buyers.

Today, more than 2,800 contracted farmers are growing potatoes for PepsiCo. Contract arrangements establish demand, quality requirements and pricing, while seed multiplication is helping address one of the value chain’s most persistent bottlenecks. PepsiCo’s potato sourcing in Ethiopia is now fully local, with 84% supplied through the initiative.

The significance goes beyond potatoes.

For companies, stronger local value chains can reduce supply uncertainty. For farmers, the proposition is equally practical: better inputs, higher yields, reduced post-harvest losses and, critically, more predictable access to a buyer.

“The real test of an agricultural partnership is not how many organisations sit around the table, but whether the farmer has a stronger business at the end of it,” said Meghna Laxman, Corporate Affairs Director, PepsiCo Africa Franchise + Ethiopia/Nigeria Foods. “If farmers can produce more efficiently, earn more predictably and reach a dependable market, while businesses build a more resilient local supply base, then the

partnership is creating value on both sides. That is the kind of model that has a chance to scale.”

Participants argued that this commercial discipline should also change how development and philanthropic capital is deployed.

Representatives from the Gates Foundation, African Development Bank, the Food and Agriculture Organization of the United Nations and the World Bank discussed the role of catalytic finance in absorbing risks that commercial investors cannot initially carry alone.

These can include infrastructure gaps, early-stage technology, farmer capability, currency and political risk, and the cost of developing new markets.

The longer-term objective, however, is not permanent subsidy.

The discussion highlighted a financing continuum in which philanthropic support is strongest when an idea is unproven, declines as the model becomes commercially established, and ultimately exits or assumes a narrower convening role once a venture becomes bankable.

“Successful public-private partnerships create the greatest value when they are tied to a real market opportunity and when incentives are aligned across the value chain,” said

Meghan Anson, RTI’s Senior Advisor for Food Security and Nutrition.

“When this alignment exists, investment is more likely to strengthen markets, improve resilience, and create value that extends well beyond any individual partnership.

Ultimately, the strongest partnerships are ones that create lasting value for all participants and continue generating results long after initial funding has ended.”

A second Ethiopia initiative discussed in Kigali shows the potential scale of that approach. RTI brings together PepsiCo and partners including John Deere, Corteva Agriscience,

Dimagi, Hello Tractor, Samanu, and others to develop a domestic sunflower value chain in Ethiopia. By leveraging American technology, this commercial partnership aims to reach 72,000 farmers across 43,000 hectares and generate $300 million in annual sunflower oil sales. The initiative also expands trade between the U.S. and Ethiopia.

The conversation also underscored that commercial demand alone is insufficient.

Roads, water, electricity, irrigation, extension services, finance, logistics and stable policy remain essential to making agricultural markets investable. Participants argued that governments and development institutions are therefore most effective when they establish the enabling conditions and public infrastructure around which private investment, technology and market access can grow.

That principle is now prompting conversations beyond Ethiopia.

Participants discussed the potential adaptation of market-led value-chain models in Rwanda, including approaches that combine government-supported land and water infrastructure, private-sector anchor farms, training and patient financing for women and young farmers.

One model under discussion would allow participants to repay the cost of greenhouse infrastructure from harvest revenues rather than servicing conventional loans before crops generate income.

Follow-up discussions are expected to examine how elements of the Ethiopia experience could inform future investment opportunities in Rwanda and other African markets, although no investment decision or formal Rwanda project commitment was recorded at the meeting.

The wider challenge is now one of replication: identifying commercially viable agricultural opportunities, designing finance around the realities of farming, aligning public and private investment, and ensuring that the farmer remains an economic participant rather than simply a beneficiary.

For Africa’s food systems, that may ultimately be the difference between a successful project and a functioning market.