The Common Fund for Commodities (CFC) implements projects in partnership with governments, international organizations and other development partners from private and public sectors, which support commodity development measures and actions that promote and accelerate development, expansion and modernization of commodity sectors and contribute to sustainable development in its three dimensions i.e. social, economic and environmental.
The CFC supports innovative commodity development financial interventions aimed at improving the structural conditions in markets and at enhancing the long-term competitiveness and prospects of particular commodities inter alia including:
(i) increasing earnings to sustain real incomes;
(ii) enhancing sustainability in commodity value chain activities;
(iii) promoting value addition and enhance the competitive position of marginalized participants in the value chain;
(iv) contributing to enhancing food security; and
(v) promoting production, productivity, trade, quality, transfer and use of technology and diversification in the commodity sector.
The CFC exercises due attention to the fact that agriculture is a place-based activity and the strategies that reflects the local innovations clusters need to be acknowledge and factored in.
Commitments, financing and disbursements
The operational guidelines of the Common Fund were originally adopted under the Agreement Establishing the Common Fund for Commodities and entered into force in 1989. They remained in force till 31 December 2012. Under these operational guidelines, the Fund had approved financing for 219 Regular projects plus a further 150 Fast Track projects, together 369 projects, with an overall cost of USD 608.5 million, of which the Fund financed USD 292.9 million (excluding cancelled projects in the amount of USD 15.17 million). The CFC financing is about 46% of the overall project cost. The balance of project costs was co-financed by other institutions (USD 117 million or 19%) and by counterpart contributions in cash and/or in kind (USD 198.2 million or about 33%), provided either by the Project Executing Agencies, collaborating institutions, governments or International Commodity Bodies (ICBs). The Common Fund financing of projects under the original operational guidelines comprises USD 278.8 million in grants (95%) and USD 14.1 million (5%) in loans.
Recognizing the new challenges and opportunities facing the CFC Member Countries, led to adoption of the reform package of the CFC, including updated operational guidelines which became effective on 1 January 2013. Under the new operational guidelines, the Fund currently has 53 Regular projects plus a further 26 Fast Track projects, (a total of 79 projects) at various stages of preparation and implementation, with an overall cost of USD 329.01 million. In addition, the Fund is participating in 8 Investment Funds with Equity and partnership financing, which together have the total assets under management of USD 523.0 million. Of the total project cost of USD 329.01 million, CFC contribution totals USD 73.18 million or about 22.2%. The balance account was paid as co-financing and/or counterpart contribution by the proponents under the new operational guidelines. The Fund financing comprise of USD 70.05 million in loans/equity etc. (96%) and USD 3.13 million in grants (4%).
According to the Fund’s audited statements, the direct project related disbursements in 2021 (unaudited) stood at USD 0.09 million as grant and USD 9.20 million as loan/equity etc. (for both Capital Account and Operations Account). Special efforts are in place to streamline the components of the Agreements between the Fund and the Recipient of resources to reduce the delays between the approval of project and commencement of actual implementation on the ground and more of these efforts will be in place in 2022.
The CFC has funded projects in over 40 different types of commodities and in partnership with Investment Funds or Equity financing etc. The commodities funded includes abaca, arachis, bamboo & rattan, bananas, cashew, cassava, castor seeds, citrus, cocoa, coconut, coffee, coir, copper, cotton, fish, fonio, groundnuts, gum arabic, hides & skins, jute, lead, maize, meat and livestock, medicinal herbs and plants, olive, palm oil, paprika, potatoes, rice, natural rubber, shea nut, sisal, sorghum & millet, soybean, cane sugar, tea, timber, tropical fruits, spices and zinc, most of which are produced almost entirely in Developing Countries and in partnership with investment Funds among which are: Africa Agriculture & Trade Investment Fund (AATIF), African Agriculture SME Fund, Eco Enterprise Funds, Moringa Agro-forestry Fund, SME Impact Fund and agRIF Coopertief U.A.
