In a historic turn of events at the 35th Annual Meeting of the Governing Council held in The Hague, the Common Fund for Commodities (CFC) has declared the resounding re-election of Ambassador Sheikh Mohammed Belal as its Managing Director. Ambassador Belal, now holding the rank and status of Under Secretary-General (USG), secured a landslide victory for a second and final term.
The election, held on November 22, 2023, at the Marriott Hotel in The Hague, witnessed the participation of representatives from CFC member countries. Ambassador Belal’s triumph, with a two-thirds majority in the first round, marked a significant milestone in the 34-year history of the CFC, being the first instance of any candidate securing such overwhelming support in the initial round. He garnered just over 68% of the votes, surpassing his Italian counterpart, who secured 31%.
The CFC, an autonomous intergovernmental financial institution operating within the United Nations framework, was established through negotiations at the United Nations Conference on Trade and Development (UNCTAD) from 1976 to 1980, officially coming into effect in 1989.
Operating on an IMF-style election method, the CFC allocates votes to countries based on a weighted average of their share capital, with a winning candidate requiring a two-thirds majority of the votes cast. Ambassador Belal, in his re-elected capacity, is set to steer the CFC through a decisive four-year term, overseeing crucial growth and impact initiatives.
The announcement of Ambassador Belal’s re-election follows a contested and democratic process, underscoring the CFC’s commitment to transparency and effective leadership. The session, chaired by H.E. Dr. Eniola Ajayi, Ambassador of Nigeria to the Kingdom of the Netherlands, saw Ambassador Belal securing a two-thirds majority from the members present.
The session was formally inaugurated by H.E. Dr. Akinwumi Adesina
President, African Development Bank Group (AfDB) through a video message. In his message, President Akinwumi, among others, stated that AfDB “count on the Common Fund for Commodities’ impact-driven strategy to help turn this around. It is important to support organisations like this Fund – because your activities are reaching smallholder farmers and other beneficiaries across Africa’s agriculture value chains. I commend the creation of a new “Agricultural Commodity Transformation Fund,” to unlock local agriculture sector potential by providing affordable finance, reducing risks facing investors, and delivering technical expertise to create equitable low-carbon supply chains. This will bring us closer to overcoming challenges in the food systems”. The message of the AfDB President Akinwumi could be found here.
As an international organization, the CFC plays a crucial role in providing financial support to projects across commodity value chains in its member countries. These projects, supporting businesses, cooperatives, and institutions engaged in commodity production and trade, contribute to sustainable development.
The 35th Governing Council meeting, hosting representatives from 101 member countries and international organizations, served as a platform for dialogue and collaboration. Discussions highlighted the challenges and opportunities faced by commodity-producing nations, emphasizing the need for visionary leadership.
In his capacity as the re-elected Managing Director, Ambassador Belal expressed his commitment to the CFC’s unique mandate, stating, “The CFC is a unique institution with a great history. I come as a firm believer in its mandate to help alleviate as many smallholders as possible from poverty through our technology-enabled impact investment.”
As news of Ambassador Belal’s successful re-election resonates globally, it reflects the confidence and support placed in the leadership of the Common Fund for Commodities. This outcome positions the CFC to continue its vital work, positively impacting the lives of individuals in member countries.
The Governing Council also ceremonially elected H.E. Margaret Shava, Ambassador of the Republic of Kenya, and H.E. Ambassador Jose Eduardo Malaya of the Philippines to the Kingdom of the Netherlands as the new chairpersons of the Governing Council and Executive Council, respectively.
The CFC, with a partnership of 101 member states and nine institutional members, opens its membership to states that are members of the United Nations, its specialized agencies, the International Atomic Energy Agency, and intergovernmental organizations focusing on regional economic integration and possessing expertise in the CFC’s areas of operation. It is worth recalling that Ambassador Belal was initially elected as Managing Director of the CFC in 2019, triumphing over candidates from five other member states.
Transcript of the remarks of Dr. Akinwumi Adesina, President, African Development Bank Group
21-22 November 2023 – The Hague, The Netherlands
The Chairperson and Distinguished members of the Governing Council of the Common Fund for Commodities, Good morning – Goede morgen (Khoo-duh-mor-khen) It is my pleasure to address the Common Fund for Commodities during its 35th Governing Council.
First, I would like to recognize the Chairperson of the Governing Council, Her Excellency Eniola Ajayi, Ambassador of Nigeria to the Kingdom of the Netherlands. Thank you for your leadership and stewardship. I wish that I could join you physically, but I am unable to due to other engagements that I have in Berlin on the G20 Compact with Africa Conference with the German Chancellor and African Heads of State.
I took time out during the meetings to write this speech and do the video recording because I believe strongly in the work of the Common Fund for Commodities and the work of the Governing Council.
Your Excellencies, Ladies and Gentlemen, you all gather from around the world for the Governing Council of Common Fund for Commodities. You gather at a time that the world is facing geopolitical tensions and conflicts that are fuelling global inflation and worsening food insecurity for billions of people. The Russian-Ukraine war led to soaring of prices of wheat, maize and fertilizers. The recent ban on the export of rice by India, which could be followed by other large rice exporters, will worsen global price volatility and calls for greater efforts to support Africa to feed itself. I say this because I know that Africa is of great interest to the Common Fund for Commodities. Nearly half of the Fund member countries are African, and the continent benefits from 70% of Fund investments.
Your prioritizing Africa makes a lot of sense and is strategic in terms of how we will feed the 2.5 billion people in the world by 2050. That is because Africa accounts for 65% of all the remaining uncultivated arable land left in the world. so, what Africa does with agriculture will determine the future of food in the world. Yet over 250 million Africans go to bed hungry daily.
These challenges are compounded by the threat of climate change and environmental degradation. Africa contributes the least to global greenhouse gas emissions, yet it is the region at greatest risk when it comes to the impacts of climate change. Nine of ten countries that are most vulnerable to climate change are in sub-Saharan Africa.
Ladies and gentlemen, we can’t let this stand. These challenges are interconnected and addressing them requires a comprehensive strategy. Africa must adapt, to survive and thrive. It has the resources and technology to achieve that. We count on the Common Fund for Commodities’ impact-driven strategy to help turn this around. It is important to support organisations like this Fund – because your activities are reaching smallholder farmers and other beneficiaries across Africa’s agriculture value chains. I commend the creation of a new “Agricultural Commodity Transformation Fund,” to unlock local agriculture sector potential by providing affordable finance, reducing risks facing investors, and delivering technical expertise to create equitable low-carbon supply chains. This will bring us closer to overcoming challenges in the food systems.
The African Development Bank Group is also ‘walking the talk’ toward agricultural transformation. The continent’s food and agribusiness will be worth $1 trillion by 2030. We must fully unlock these potentials and opportunities. Like the Common Fund for Commodities, one of our strategic objectives at the African Development Bank is to boost smallholder farmer productivity, food security and incomes.
Under our “Feed Africa” strategy, the African Development Bank supports African countries to build resilience in the continent’s food systems. Furthermore, through the Bank’s Technologies for African Agricultural Transformation programme, our investments are delivering climate-smart agricultural technologies for millions of farmers. We also deploy innovative financial instruments to de-risk lending to agriculture and provide mechanisms to adapt to or manage climate risk.
Since the launch of the Feed Africa strategy in 2016, we have invested more than $8 billion in agriculture. Over a quarter of a billion Africans have benefitted from the Bank’s interventions and support. Despite these achievements, many African countries remain dependent on agriculture, extractive exports and other commodities. Far too much of what comes from the African soil, is exported as raw material for processing and value addition abroad. Consider, for example, cocoa. More than 60% of the global cocoa supplies come from West Africa. Yet Africa processes only a fraction of that raw product into chocolate and other consumer goods. What is true for cocoa, is true for too many of Africa’s commodities.
The mission of the Common Fund for Commodities is as relevant today as it was when it was created: to reduce commodity dependence, especially in Africa. Africa cannot continue to export raw commodities, which are subject to low prices and significant volatilities. The export of raw commodities is the door to poverty, while value addition and exports of value-added products is the highway to wealth.
Ladies and gentlemen, excellencies, distinguished guests…it is time for Africa to reap more of what we sow and other natural resources. It is time that developed countries, within and outside the European Union, do more to implement and support innovations that add value to commodities in Africa. I believe that one of the solutions is the Bank’s Special Agro-Industrial Processing Zones initiative (SAPZs). These zones concentrate production, processing, storage, transport and marketing of commodities – like cotton, cocoa, and cashew – in areas with high agricultural potential.
These zones target secondary cities and are designed to boost or revitalize rural areas of under-development, effectively transforming them from zones of economic misery to new zones of economic prosperity. The African Development Bank has committed $853 million to develop 25 Special Agro-Industrial Processing Zones in 11 countries and this investment has further attracted $661 million in co-financing from our partners.
Earlier this month, at the Africa Investment Forum in Morocco, the founding members of a new private sector-focused Alliance for Special Agro-Industrial Processing Zones announced $3 billion in new investment for the initiative. The Alliance, made up of development financial institutions, the private sector and development-oriented technical partners from around the world, will also help to streamline the development and delivery of at least a dozen additional zones.
The African Development Bank is also working with the Government of Canada to set up the $85 million Agri-food Small and Medium Enterprise Catalytic Financing Mechanism. The mechanism blends finance with innovative financial products to strengthen agricultural value chains and improve food security across the continent.
The mechanism represents the Bank’s first blended financing facility to target agriculture-related small and medium enterprises. The mechanism also supports partial risk guarantee instruments available under the African Fertilizer Financing Mechanism, which seeks to enhance pan-African agricultural productivity by promoting the use of fertilizers. We look forward to working with the Common Fund for Commodities for concessional financing to African farmers and small and medium sized enterprises, as well as to de-risk lending by financial institutions to agricultural value chains.
Your Excellencies, Ladies and gentlemen, as the Governing Council of the Common Fund for Commodities reviews the year’s activities and votes on its future, I urge you to do so mindful of renewed political commitment of African leaders to not only feed Africa, but to unlock the full potential of its agricultural sector. This was clearly demonstrated at the Feed Africa Summit, which the African Development Bank organized together with the Government of Senegal and the African Union in January of this year. Attended by 34 Heads of State and Government, the Summit developed and agreed on food and agricultural delivery compacts for 41 countries. I am delighted that we have mobilized $72 billion to help support the implementation of these compacts.
Therefore, the Common Fund for Commodities’ resources should leverage on these food and agricultural delivery compacts, to support smallholder farmers, especially women and the youth, and small and medium sized enterprises to produce, process and take greater advantage of trade. Together, let us turn the sweat of farmers into wealth. I wish you excellent and productive Governing Council sessions.