Arab bank to step up support for African agriculture

KHARTOUM (Reuters) - The Arab Bank for Economic Development in Africa (BADEA) is to step up funding for agriculture projects to help governments stave off future food price crises and droughts, the bank's director general said.

Abdelaziz Khelef told Reuters the bank would increase total commitments to $1 billion under a new 2010-2014 five-year plan, a $100 million increase from the previous plan.

A quarter of that money would now go to agricultural and food security projects, up from less than 20 per cent in the last five-year period, he added.

BADEA was set up by countries in the Arab League to make grants and soft loans to development projects in sub-Saharan Africa. Sudan and other North African League members do not benefit.

"Most African countries are facing a very difficult situation in terms of food security ... And many African countries shifted their priorities towards food security," Khelef said in an interview in the bank's Khartoum headquarters late on Tuesday.

"We go with the priorities of African countries. We try to really help them implement their plans."

Khelef said the bank would be interested in supporting irrigation schemes and building rural food marketplaces.

It was also interested in helping fund regional trade blocs and long term government food security strategies.

Half the bank's total funding pot would go on African infrastructure projects, he said, particularly new roads to boost trade between regions and neighbouring countries.

Khelef said the bank did not have an emergency fund to help farmers caught up in the drought reported in parts of east Africa. "But we can help them develop projects to avoid a repetition of this kind of crisis in future."

Global food prices rose sharply in 2008 and many developing countries saw shortages and hoarding.

There was also unrest as farmers in poor countries complained they did not see their incomes rise as a result.