Annual Report 2023

The modern world is built on commodities – from the food that keeps us alive to the oil that fuels our cars to the metals that power our smartphones. We rarely stop to consider where they have come from. But we should. We invite you to peruse our annual report to make a difference in the lives of almost three billion smallholders who work so hard to make all those commodities available to us.

Compared to our smallholders, the world of commodity traders, with few exceptions, remained private and divide their enormous profits only among few. The family that owned Cargil contains no fewer than fourteen billionaires – more than any other family business in the world. Louis Dreyfus, the historic grain traders, is entirely owned by a single person. Glencore, the European commodity giant, produced no less than seven billionaires since it floated in 2011.

As we traversed the year 2023, the tribulations afflicting the global economy persist unabated. Instead of abating, we find ourselves entangled in escalating tensions, humanitarian crises, and an alarming proliferation of violent, inter-linked conflicts. The unprecedented displacement of people from their homes continues unabated. The war in Ukraine relentlessly disrupts the supply chains of food, fuel, and energy, further aggravating economic instability. As if this were not sufficient, recent devastations in the Middle East present additional grave concerns.

Commodity prices remain highly volatile, influenced by geopolitical tensions, climate change, and economic policies. This volatility breeds uncertainty for both producers and consumers of soft commodities, complicating planning and investment decisions. For commodity exporting nations, such price volatility results in unstable export revenues, undermining their economic stability.

This instability has become existential as humanity, in the poignant words of United Nations Secretary-General Antonio Guterres, wages war on nature. One million species teeter on the brink of extinction. Ecosystems vanish before our eyes, deserts expand, and wetlands are lost. Annually, we lose ten million hectares of forest. Oceans, overfished and choked with plastic waste, absorb carbon dioxide that acidifies the seas. Coral reefs bleach and die. Air and water pollution claim nine million lives each year – more than six times the toll of the pandemic.

Amid these dark clouds, a silver lining emerges in the form of rising public concern for the environment and biodiversity loss. Businesses can no longer afford the luxury of complacency, adhering to outdated practices. They must realign their operations to resonate with the empathy of conscientious consumers for the impoverished and destitute. If this trend persists and people increasingly align their investments with their values, we may witness a tangible impact on the cost of capital in public markets. In a few years, impact investment could become mainstream, driven by value-based investing which term as ‘humanizing the value chains’

By humanizing the value chains, we are essentially asking you to pay a reasonable price for the smallholders. Using our newfound technological capability as well as growing awareness for sustainability among the generation Z and millennials, we seek your attention to this aspect of humanizing the value chains. Please contact us if you wish to be a part of this humanizing exercise at this time when dehumanizing practices by the profiteers and the polluters are pushing millions, if not billions, back to poverty.

CFC is trying its best to keep track of the shifting consumer preferences. For instance, the burgeoning demand for organic and sustainably produced food impacts the agricultural commodity market in a positive way. Notably, the joint CFC-UNCTAD study on ‘Harnessing the potential of nutraceutical products in landlocked developing countries’ presented at the Fifth United Nations Conference on the Least Developed Countries (LDC5) in Doha, has garnered considerable attention.

According to the UNDP, by the close of 2023, an additional 165 million people will have fallen into abject poverty. This increase is particularly severe in low and lower-middle income economies, with the poorest 20% in low-income countries bearing the brunt. Poverty often persists in concentrated areas over extended periods, creating a self-perpetuating cycle of diminished opportunities and increased vulnerability, undermining years of development efforts. Breaking this vicious cycle sustainably remains a formidable challenge for the CFC in commodity-dependent countries.

Given that fact that as per latest UNCTAD report on commodity dependency, between 2019 and 2021, only 12% of advanced economies were on the list, compared to a staggering 74% of the world's least developed countries. A total of 29 out of the 32 nations classified as having low human development in 2021 were commodity dependent, according to the UN's Human Development Index. So, for those commodity dependent countries who rely heavily on their natural resource exports for domestic employment, foreign exchange earnings and tax revenues, the unidirectional movement of profits towards the global North needs human reconsideration.

This appears urgent in the case of CFC as our internal financing capacity is approaching its limits. Over the past two years, the CFC has received a staggering 745 project proposals through its regular calls for submissions, necessitating a total of USD 665 million for full implementation. However, the CFC could only approve 33 projects, with a total commitment of USD 30.4 million. This represents less than five percent of the total proposals received. Considering this, the CFC renews its call for the resumption of voluntary contributions by member states. This appeal is in alignment with the UNCTAD IV resolution on ‘93 (IV) Integrated Program of Commodities,’ which is considered as the foundational resolution for the Common Fund for Commodities (CFC). We look forward to UNCTAD's 60th Anniversary celebrations in June 2024 which will be held under the theme of "Charting a New Development Course in a Changing World," underscoring the need for innovative approaches to trade and development"

Defying the severe liquidity squeeze, we are immensely proud of our accomplishments this year. 2023 has been another year with extremely high number of projects seeking CFC financial support, with over 400 applications received. Although a record 18 new investments were approved by the CFC's Executive Board, this is still only a fraction of what our valued applicants wish us to invest in.

These approvals accounted for a total value of nearly USD 280 million, with USD 14 million coming directly from CFC. These investments are aligned with the core Sustainable Development Goals (SDGs), targeting areas such as poverty alleviation (SDG 1), hunger eradication (SDG 2), gender equality (SDG 5), economic growth (SDG 8), innovation (SDG 9), reducing inequalities (SDG 10), responsible consumption and production (SDG 12), and climate action (SDG 13).

These partnerships reach over 98,000 farmers, a net additional income of up to USD 2,750 per annum. An additional 11,000 jobs were supported by investee companies of the CFC, thereby enabling CFC to contribute sustainably and in substance to the needs of the poor and underprivileged.

Given this heightened demand for CFC financing, the developments regarding the Agricultural Commodity Transformation Fund (ACT Fund) are particularly timely. The ACT Fund will aid in meeting the increasing demand for impact investment in the commodity sector. Beginning in September 2023, the CFC team commenced fundraising discussions with potential investors identified during the market testing stage.

We aim to raise approximately USD 100 million to meet our increased demand through the ACT Fund. We continue to appeal to those member states that are major beneficiaries of commodity trades to step forward and help make the world of commodities fairer and more just. We urge that a change in the system is required to address the rules of the game which are predominantly set by industrialized countries, often sidelining the very nations and people who depend most on commodities for their survival. You can find more information about the CFC's ACT Fund in Section II of this report (page 14).

This initiative serves as a catalyst for transformative change. The Governing Council in its 35th Meeting held a side event to introduce groundbreaking projects spanning coffee, macadamia, handicrafts, and crucial infrastructural facilities – each playing a vital role in empowering commodity producers. This covered in Section VI of this report (page 41). This exemplifies how our investment in the resilience of grassroots enterprises in commodity-dependent developing countries is not merely assistance – it is a lifeline. Our mission is to localize development by implementing a model where local wisdom is harnessed and synergized with modern science and technology, wherever feasible.

In this endeavour, we recognize the crucial nexus between smallholders and small to medium-sized enterprises (SMEs). By fostering this bond through strategic interventions and vital inputs, we aim to elevate the income levels of small-holders and achieve significant milestones on the path to sustainability. Our approach involves empowering local communities by integrating their traditional practices with advanced scientific methods, thereby creating a harmonious and effective development strategy. Through targeted initiatives, we strive to enhance productivity and resilience, ensuring that the benefits of technological advancements are accessible to all. By bridging the gap between local knowledge and contemporary innovations, we are committed to driving progress that is both inclusive and sustainable, ultimately contributing to the economic upliftment of smallholders and the broader community.

In this report we present to you a feature article on humanizing the commodity value chains. Reducing disparities is central to our mission, and one way to achieve this is by humanising value chains, connecting consumers with the hardworking individuals behind the products they enjoy, such as chocolate bars, lattes, and t-shirts. Consumers increasingly seek sustainably produced goods, which includes fair compensation for workers. Rapidly developing technologies like blockchain and AI can play a crucial role by ensuring more of the money spent on products reaches smallholder farmers. Digital traceability tools provide consumers with detailed knowledge about the origins, creators, and production processes of products. Additionally, these technologies could enable consumers to tip farmers, like how they tip delivery workers, cab drivers, and waiters.

To gain further insight into how the CFC investments support smallholders through value chain innovation, read about the impact of our investments in: Clearpath coffee (Section II.1, page 12) and Organic Africa (Section II.2 page 23). This is only a snapshot of what we have been doing. You will see the full summary of our current operations in Section IV.3 of this Report (page 22).

CFC has always been keen to invest in agribusinesses that work with commodities such as millets, while helping small-holders build food security and develop more stable livelihoods. For example, read how our investment enabled grain trader Shalem to transition into an added value manufacturer that is supporting Kenyan smallholders to thrive: https://common-fund.org/supporting-kenyan-smallholders-thrive. With high impact project like this, CFC have been a very active participant in celebrating 2023 as the Year of Millets as was designated by the United Nations at the urging of India.

As an impact investor, CFC takes the issue of technical assistance with utmost importance. As it houses a talented team of TA experts capable of working as consultants for other impact investment fund, we are proud to see their diversified portfolio across the world. Aside from the core investments, the activities of our TA team in the Africa Agriculture and Trade Investment Fund (AATIF) and Agroforestry Technical Assistance Facility of the Moringa Fund (ATAF) helped rolling out 136 projects spanning 23 countries throughout Africa and Latin America regions. These initiatives have provided indispensable support to 46 agribusinesses and financial institutions, fostering growth and resilience across diverse agricultural value chains.

We know we are small. Not by design but by default. The founding parents of CFC always wished to see CFC working for all the commodity producing smallhodlers so that poverty could be uprooted at its origin-at the grassroot. To bring CFC closer to what it was intended, we are working to prepare our next batch of strategic frameworks. To do that, we need all member states to join their hands to restore CFC to what it was envisaged to do more to empower our smallholders with what they rightfully deserve. But to do more, we need larger partners such as the SIDA, BII, FMO, KfW, World Bank, IMF, IFC, GCF, EU and the broader UN ecosystem, to de-risk our investments with concessional finance.

We did our best to outreach to as many member states as possible including International Commodity Bodies (ICBs), members of UN and EU ecosystems like ECOSOC, UNOHRLLS, OASS, OACPS (Organization of African, Caribbean and Pacific States), African Development Bank, Islamic Development Bank etc.

We organised series of webinars including being a partner organiser for the Africa Dialogue Series 2023 at the United Nations, participated in the 2023 ECOSOC Financing for Development Forum (FfD). The CFC also became a member of the Global Impact Investing Network (GIIN) – an organisation devoted to increasing the scale and effectiveness of impact investing.

CFC also joined the internationally recognized Partnership for Carbon Accounting Financials (PCAF), which will enable us to estimate the carbon footprint of our investments more accurately. For us, in the CFC, making the commodity value chains carbon neutral is not only our natural choice, but also our call to action to what we preach. To meet our growing workload, we are trying to bring as many innovations as possible with initiatives like outsourcing, partnerships, collaborations and digitalisations. In this endeavour, we remain deeply grateful to the Ministry of Commerce of the People's Republic of China (MOFCOM) for singing the first ever junior professional Officer (JPO) program with the CFC.

These activities, illustrating an increasingly active CFC, would not have been possible without the sustained efforts and dedication of our colleagues to make our vision and mission come true. I am grateful for their contribution.

Finally, the year 2023 was, at least for me, a special year since it was the last full year of my first tenure at the CFC where I put my best efforts defying all the shortcomings. I remain grateful to the member states for their unprecedented support in re-electing me for the second and final term. It was a pleasure working with them and with you

We invite you to read this report and get inspired by our work to help us to do more together. Let's strive for a world where everyone has a fair opportunity for a decent life with dignity. Working for CFC is akin to serving humanity all the time.

Here's to more progress and success in the year ahead!

Sheikh Mohammed Belal

The designations employed and the presentation of material on this map do not imply the expression of any opinion whatsoever on the part of the Secretariat of the Common Fund for Commodities and/or on the part of the countries mentioned on it, concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The information shown is this map is for information purposes only and should not be considered as any form of endorsement by the Common Fund for Commodities and does not create any legal rights or obligations for any Member State.

CFC - Driving sustainable development through commodities

From the bread on your table and the cotton in your shirt to the copper and lithium in your smartphone, commodities are part of the fabric of our daily lives. But for centuries the rewards that come from producing and trading commodities have not been shared equally. The CFC was founded to change this.

Addressing the needs of commodity-dependent countries is in everyone's interests¹ . These countries, often characterised by their heavy reliance on the export of primary commodities, face significant challenges due to the volatile nature of commodity markets. This volatility can lead to sudden and severe economic downturns, impacting the welfare and development prospects of these nations. The inherent instability associated with commodity dependence exposes these countries to risks such as sharp reductions or reversals in capital inflows, often referred to as ‘sudden stops’, which can have profound negative effects on their economies. Moreover, the reliance on a narrow range of exports makes it difficult for these countries to achieve diversified and resilient economies, further entrenching them in a cycle of poverty and underdevelopment² , and undermining the global economic development.

The international community has a vested interest in supporting commodity-dependent countries in overcoming these challenges. By addressing the structural impediments to sustainable development in commodity-dependent countries, the international community can help unlock the potential for economic growth, poverty reduction, and sustainable development, aligning with the United Nations‘ Sustainable Development Goals³ . This requires a concerted effort to provide financial support, investment, and knowledge transfer, enabling these countries to develop competitive advantages in sectors beyond their traditional commodity-based industries⁴.

Our work is driven by the principle that commodity production, processing and trade should bring equitable benefits to everyone who contributes to the products that are part of our daily lives. In practice, we strive to deliver positive economic, social and environmental outcomes to all, particularly vulnerable communities in commodity-dependent developing countries (CDDCs).

¹ https://www.weforum.org/agenda/2019/05/why-commodity-dependence-is-bad-news-for-all-of-us/

² https://press.un.org/en/2023/gaef3589.doc.htm

³ https://unctad.org/publication/state-commodity-dependence-2023

⁴ https://common-fund.org/cfc-invests-ease-commodity-dependence-least-developed-countries

⁵ https://unctad.org/publication/state-commodity-dependence-2023

⁶ https://www.un.org/ohrlls/sites/www.un.org.ohrlls/files/cfc-2022.pdf

CFC and commodity dependence

According to UNCTAD, a country is commodity-export dependent when more than 60% of its total merchandise exports are commodities. The organisation’s State of Commodity Dependence 2023 report⁵ , notes that the number of commodity-dependent countries has remained unchanged at 101 in recent years. The vast majority are developing countries; 95 out 142 developing countries were commodity dependent, much of their populations remaining poor and vulnerable.

This dependency is symptomatic of the economic vulnerability of these nations and it highlights the difficulties in diversifying their economies away from primary commodities towards more competitive sectors. The CFC has been actively addressing these challenges by investing in initiatives aimed at alleviating poverty and promoting sustainable development in least developed countries (LDCs) and landlocked developing countries (LLDCs) as special priority vulnerable groups. The CFC's commitment to these efforts is evident in its strategic investments and collaborations within the United Nations system and beyond, focusing on enhancing the agricultural commodity value chain through accessible financing and private enterprise engagement⁶.

The CFC's approach to reducing the vulnerability of CDDCs, LDCs and LLDCs involves supporting smallholder farmers and small and medium enterprises (SMEs) to add value and increase productivity. By focusing on climate resilience and gender equality, the CFC aims to tackle the root causes of poverty and dependency in these regions. This strategy is aligned with the broader goals of the United Nations, particularly in fostering economic diversification and addressing capacity constraints to shield LDCs from socioeconomic, health and environmental shocks. Through targeted investments and partnerships, the CFC is making significant strides in transforming the commodity sector, thereby contributing to the sustainable development and resilience of the world's most vulnerable economies.

The CFC has been actively contributing to the implementation of both the Doha Programme of Action and the Vienna Programme of Action, which are critical frameworks aimed at supporting LDCs, LLDCs and small island developing states (SIDS). The CFC's mandate to support sustainable development in CDDCs is directly aligned with the objectives of these programmes. Through its investments and project financing, the CFC has been instrumental in promoting structural economic transformation within these vulnerable economies.

Overwhelming demand for CFC financing

The CFC keeps pushing the limits of its internal financing capacity. During 2022-2023, the CFC received 746 project proposals requiring a total of USD 665 million for implementation. While 33 projects have been approved with a funding allocation of USD 30 million, this represents less than five percent of the proposals submitted. Consequently, the CFC is calling for a resumption of voluntary contributions by member states, in alignment with the UNCTAD IV resolution on 93 (IV) Integrated Programme of Commodities, which established the framework for the CFC.

In order to meet our overwhelming demand, the CFC has been working for the formulation of a new fund-the Agricultural Commodity Transformation Fund (ACT Fund) for the past two years. The fund is now ready and CFC is actively pursuing potential funders-both form public and private-to invest for CFC ‘s unique portfolios that go directly into the grassroots of the commodity producing developing countries. For more details about our ACT Fund (see page 14) and be a part of the impact that you could help implemented to alleviate more people from poverty.

With our unique portfolio diversity and size, there are hardly any international financial organisations that can match us in terms of deeper impact at the grassroot. CFC goes in places and in communities that others find difficult or unwilling to get into. With our base in the innovation rich the Netherlands, we have also been working to bridge the gap between the global North and the South through technology and innovation transfer

Recent events have underscored the transformative impact of the CFC's initiatives. A side event at the Governing Council of the CFC showcased several CFCsupported projects, including those in the coffee, macadamia and handicrafts sectors, alongside crucial infrastructural developments. These projects highlight the critical support provided by the CFC to enhance the viability and resilience of commodity producers in developing countries. These efforts are central to the CFC’s mission to generate sustainable development impacts. In upcoming sessions, attendees will have the opportunity to hear from beneficiaries who have directly experienced the positive changes brought about by the CFC’s work.

CFC for food security

As the global population continues to surge, with median projections reaching 10 billion by 2050 and 11.2 billion by 2100, the challenge of ensuring adequate food supply intensifies. This demographic expansion necessitates a significant increase in global food production, by as much as 70%, to prevent potential shortages and sustain the growing number of inhabitants. The CFC plays a pivotal role in addressing these concerns, focusing on enhancing agricultural productivity and sustainability. By investing in innovative agricultural practices and technologies, the CFC aims to boost food production efficiently and sustainably, ensuring that the Earth's resources are utilised judiciously to support its burgeoning population. This approach not only aims to meet the immediate food needs but also considers the long-term implications of agricultural practices on the planet's health and capacity to provide for future generations.

In its mission to combat food insecurity, the CFC aligns its efforts with several of the United Nations’ Sustainable Development Goals (SDGs), particularly targeting SDG 1 (No Poverty), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). By focusing on these areas, the CFC not only contributes to increasing the global food supply but also ensures that its initiatives promote social equity, economic development, and environmental sustainability. Investments are carefully selected to empower communities, particularly in developing countries, by providing them with the tools, knowledge and resources needed to improve agricultural productivity, adapt to climate change, and achieve food security. Through these targeted investments, the CFC is making significant strides towards a future where food is accessible and abundant for all, irrespective of the challenges posed by a growing global population and the limitations of our planet's resources.

CFC makes contributing to Climate Action a priority

The CFC is acutely aware of the intricate link between the production and trade of commodities and the global challenge of climate change. As the world grapples with the urgent need to transition away from fossil fuels, the CFC is intensifying its efforts to support renewable energy initiatives in developing countries. This commitment is in direct alignment with the United Nations' Sustainable Development Goal 13, which calls for urgent action to combat climate change and its impacts. By increasing investments in businesses that are innovating in the field of renewable energy and sustainable practices, the CFC is playing a crucial role in facilitating a greener, more sustainable future.

Commodities, while being a primary source of income for many nations, can also lead to environmental degradation and social inequality if not managed sustainably. The CFC recognises that the drive to produce more can often lead to a surplus that depresses market prices and strains natural resources. This unsustainable approach can hinder longterm development and exacerbate the 'resource curse', where countries with abundant natural resources experience stagnant economic growth and social challenges. The CFC's mission is to transform this dynamic by ensuring that the entire commodity value chain, from production and processing to trade, is equitable and beneficial for all stakeholders, particularly smallholder farmers and local communities.

The CFC's investments are tailored to the unique strategies and developmental needs of each country and region in which it operates. Sustainable development, a multifaceted concept, requires a nuanced approach, and the CFC's strategies reflect this complexity. The cornerstone of the CFC's investment philosophy is to enhance food security, financial stability, and market access for smallholder farmers, who are responsible for a significant portion of food production in Africa and Asia. These farmers often live on the margins, with their livelihoods hanging in the balance.

To mitigate the challenges faced by these critical players in the agricultural sector, the CFC provides financial backing to innovative projects that promise to deliver positive change. These projects aim to increase production, improve market connectivity, and boost incomes for smallholder farmers and SMEs involved in the commodity sector. Through impact financing at the grassroots level, the CFC empowers these stakeholders to adopt sustainable practices that not only raise their standard of living but also contribute to the global fight against climate change. In doing so, the CFC is not only investing in the present but is also sowing the seeds for a more resilient and environmentally conscious future for commodity-dependent economies.

Our core activities

Acting as an impact investor, we support communities that rely on the commodities sector and are most exposed to its risks. We are based in the Netherlands, where we can harness innovation to help agri-SMEs and smallholder farmers in CDDCs, LDCs and LLDCs thrive.

We offer financing up to USD 2 million7 , which SMEs submit proposals for. This bottom-up strategy ensures our investments are targeted to their needs and those of their local communities, while preserving the environment and creating stronger value chains.

We also manage technical assistance facilities for other impact investors operating in areas connected to our mission. This collaborative and knowledge sharing approach enables us to extend our support to more SMEs and smallholder farmers in more countries.

Investing to make a difference

The CFC works with various partners across the public and private sectors, development institutions, and civil society, to support and invest in commodity value chains. Our aim is to use the commodity production, processing, manufacturing and trading sectors to improve the lives of the economically disadvantaged.

We fund organisations and initiatives that:

Promote innovation: We look for innovative projects that tap into new commodity market opportunities. These should drive economic growth, create jobs, boost household incomes, reduce poverty and improve food security.
Offer scalability and sustainability: We invest in projects that can be scaled up and replicated, and are financially sustainable.
Deliver measurable benefits: We support activities that have a clear, positive impact on both the social-economic and environmental aspects of the communities and regions involved in commodity value chains.
Strengthen market connections: We aim to enhance existing market links or develop new ones within the value chain.
Improve financial services: We increase access to financial and other support services for commodity producers and businesses.
Enhance knowledge and information sharing: We promote the sharing of knowledge and information across the industry.
Foster effective collaboration: We help build efficient and cost-effective partnerships among producers, industry, governments, civil society and other stakeholders working to enhance development through commodities.
Connect producers with consumers: Using technology, we bridge the gap between modern consumers and smallholder farmers. This approach, which we call ‘walking back along the value chain’, directly benefits the smallholders who are essential to our food supply.

Photo: CFC Consultative Committee

Key areas we support

We offer comprehensive technical and financial assistance throughout the entire value chain – from production to consumption – covering local to international markets. Here are key focus areas where we provide support:

• Enhancing production, improving productivity and ensuring quality

• Advancing processing techniques and adding value to products

• Differentiating products to stand out in the market

• Promoting diversification to expand market reach

• Boosting marketing efforts

• Transferring and upgrading technology, fostering innovation

• Implementing measures to reduce risks in physical marketing and trading

• Assisting with trade finance

• Managing risks such as price fluctuations and weather volatility

• Increasing awareness of tackling commodity dependence

• Providing technical assistance

Investment with Impact

Our investments are aimed at sustainability and creating significant developmental impacts, aligned with the SDGs. We primarily provide financial support through loans, which may include working capital and trade finance. On occasion, we consider equity investments, quasi-equity, lines of credit and guarantees. We also offer limited grants to qualified organisations to initiate new strategic activities or enhance existing projects with capacity building and technical support.

Funding for our activities comes from voluntary donations, capital given by member countries, and the interest we earn on our investments. The greater the support from our member states, the more resources we have to help reduce commodity dependence and combat poverty, contributing to a more equitable and thriving global community.

Partnering up to grow our impact

A critical aspect of the CFC's success in achieving its mandate lies in its collaboration with a diverse range of partners who operate within commodity value chains. These partners include small business operators, SMEs, cooperatives, producer organisations, governments, international organisations, and other development partners from both private and public sectors.

Our partners are carefully selected based on their proven track record in commodity development and their ability to invest in the value chain to either reduce transaction costs or increase revenues for producers, processors, storage facilities or marketing entities. This ensures that the interventions are not only impactful but also sustainable in the long term. Moreover, these partners are expected to have a clear plan focusing on developing and/or diversifying their production or services, as well as expanding their markets at the local, national, regional and international levels. This broad market approach is crucial for the scalability and replicability of the projects, thereby maximising their impact.

The technical, managerial and financial capacity of the CFC's partners is also a key consideration. This ensures that activities are implemented effectively and efficiently, leading to measurable positive socio-economic and environmental impacts on the stakeholders in commodity value chains. By including social, economic and environmental aspects in their scope of work, the CFC and its partners address the multifaceted challenges faced by commodity producers and contribute to every element of sustainable development.

Furthermore, the CFC's partners are aligned with the Fund's values, including internationally recognised principles concerning human rights, labour standards, the environment and anti-corruption. This alignment ensures that projects not only contribute to economic growth but also to the improvement of living standards and the protection of the environment.

Collaboration with these partners allows the CFC to extend its core activities and create additional opportunities for everyone involved in the commodity value chain. By leveraging the expertise, resources and networks of its partners, the CFC can implement innovative commodity development financial interventions aimed at improving structural conditions, enhancing sustainability in commodity value chain activities, and promoting value addition.

This collaborative approach is instrumental in achieving the CFC's aim to realise the potential of commodity production, processing, manufacturing and trade for the benefit of the poor, thereby making a significant contribution towards the SDGs.

Photo: Tashfia Mubtasim, CFC

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Annual Report 2023

Foreword: a message from our Managing Director

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