AfDB to invest $24b in strategy to transform agriculture in Africa into business
The Board of Directors of the African Development Bank (AfDB) has approved a strategy to transform agriculture on the continent.
In a press release issued in Abidjan and copied to ghanabusinessnews.com Friday June 24, 2016, the Bank said the strategy is aimed at transforming and making agriculture a competitive and inclusive business that creates wealth, improves lives and secures the environment, and the Bank is investing $24 billion into it.
The AfDB indicates that the strategy known as ‘The Feed Africa Strategy’ makes a strong case for reversing the situation of a continent that spends $35.4 billion on food imports annually despite being home to 65 per cent of the world’s undeveloped arable land.
“Some 70 per cent of Africa’s population and about 80 per cent of the continent’s poor who live in rural areas depend on agriculture and non-farm rural enterprises for their livelihoods. This growing multitude is increasingly unable to meet its basic food needs as population pressures grow, land and water resources become scarce and degraded and agricultural productivity stagnates,” the bank notes.
The strategy, the Bank said, is the second of its High 5 priorities – Light up and power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and Improve the quality of life for the people of Africa – a blueprint for the implementation of its Ten Year Strategy 2013-2022.
The strategy it says, would be focusing on transformation, scaling up agriculture as a business through value addition, led by the private sector and enabled by the public sector, and using innovative financing mechanisms.
The release stated that the total investment for the realization of the transformation agenda over 10 years is estimated at $315-400 billion with annual returns of $85 billion, when fully funded.
“The Bank will itself invest $24 billion and leverage additional investments through equity, quasi equity, debt and risk instruments to catalyze investments at scale from the private sector and with co-financing from traditional donors and new players.
The identified financing gap estimated at $23 billion can be met using innovative de-risking tools and blended financing from combined sovereign, pension and private equity funds,” Chiji Ojukwu, Director of the Bank’s Agriculture and Agro-industry Department, was cited as saying.
The AfDB President Dr. Adesina Akinwumi was quoted as saying, “The agricultural agenda in particular and the High 5s in general are critical at this time when “almost all of Africa’s rural areas have become zones of economic misery. We should turn them into zones of prosperity.”
By Emmanuel K. Dogbevi