How the AfDB wants to spur economic growth in Africa by transforming agriculture

Dr. Akinwumi Adesina – AfDB President

Introduction: The African continent can very much be the food basket of the world, but not yet. There is currently an impending threat of famine facing some 100 million people on the continent, particularly in the Horn of Africa.

Meanwhile, agriculture is a very important sector in Africa – the continent is literally an agriculture continent, but African countries together spend $35 billion every year importing food, and that is expected to rise to $100 billion by 2025.

On average, agriculture contributes 15 per cent of the total GDP of Africa, however it ranges from below three per cent in Botswana and South Africa to more than 50 per cent in Chad, implying a diverse range of economic structures, according to the OECD-FAO Agricultural Outlook 2016-2025, 

It adds that the sector employs more than half of the total labour force and within the rural population, provides a livelihood for multitudes of small-scale producers. Smallholder farms constitute approximately 80 per cent of all farms in sub-Sahara Africa and employ about 175 million people directly. In many of the countries, women comprise at least half of the labour force.

Africa has a population of 1.2 billion, and despite the importance of agriculture, about 65 per cent of the continent’s arable lands remain to be cultivated.

There are about 14 universities in Africa that have departments and Faculties of Agriculture or agriculture related specialties, there could be more, but the continent is till poor and hungry!

What is wrong with agriculture in Africa?

Agriculture is the mainstay of most economies in Africa as the data shows, but it is held that farming or agriculture is unattractive to the continent’s youthful population – and the youth make up the majority of the population. It is estimated that 62 per cent of the population is below 25 years old. The sector is considered to be the preserve of old rural folks.

According to the Alliance for a Green Revolution in Africa (AGRA), on average, Africa has just 70 agricultural researchers for every million people, compared with 550 in Latin America and 2,640 in North America.

It has also been found that increasing investment for agricultural research and development faces the twin challenges of inherently long lag times between initial investments and future benefits, and limited evidence showing high rates of return for national research programmes.

Other factors hindering growth is lack of inputs. Agriculture in Africa is largely small-scale and not very much mechanized. The process is done mostly with the hoe and cutlass.

African governments over the years have consistently failed to meet budgetary allocations to agriculture despite signing onto the Maputo Agreement. In 2003 African Heads of State committed to invest 10 per cent of their national annual budget to support agriculture and ensure annual growth rates in the sector by six per cent. There hasn’t been consistency in keeping to this agreement, leading to decline in general in the sector.

What some organisations are doing with agriculture

There are a number of organisations working to improve agriculture in Africa. One of such organisations is the  Alliance for Green Revolution in Africa (AGRA). AGRA is involved in supporting small-scale farmers across Africa. AGRA believes that it is possible for agriculture to be both more productive and hip enough to attract young farmers.

The organization says it is mobilizing 450 farmers’ organisations in 14 countries to give smallholder farmers market access and bargaining power for their produce

What the AfDB wants to do with agriculture

To show how important agriculture is to the continent’s economic growth and poverty reduction, the AfDB made agriculture the main focus of its 52nd Annual Meetings, held in Ahmedabad, India from May 22 to 26, 2017.

In his opening address, the President of the Bank, Dr. Akinwumi Adesina, pointed out that despite challenging times occasioned by the global economic recession, Africa continues to post resilient growth.

“Growth will pick up from 2.2 per cent last year to 3.4 per cent this year. These averages hide exceptional growth performance of many countries. In 2016, 12 countries grew at over 5 per cent and 20 countries grew by 3-5 per cent. Africa’s head is above waters, in rising waters of global recession. Africa is resilient. But we must move quickly to unlock greater growth rates that will substantially drive down poverty and support faster diversification of the economies,” he said. 

According to Dr. Adesina, it is confidence in Africa and its potential that is driving the work of the AfDB.

“The new kick in our steps for Africa comes from our High 5s: Light up and power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the quality of life for the people of Africa. The High 5s will accelerate Africa’s development. Don’t just take it from me. The United Nations Development Programme’s (UNDP) independent analysis and report shows that Africa will achieve 90 per cent of the Social Development Goals and 90 per cent of Agenda 2063 by focusing on these High 5s. The distance between vision and reality is action. We need to accelerate actions on these High 5s. Africa’s future must not continue to get postponed into the future,” he said.

He said to that end, the Bank is accelerating its investments in Africa.

“In 2016, we approved $10.5 billion – the highest ever in the Bank’s history. We disbursed $6.5 billion – the highest ever by the Bank. The Bank is delivering for Africa and we are ready to do more. Let me summarize what we achieved in 2016 alone in ‘action units’,” he said, and outlined the following:

  • 3 million Africans benefitted from new electricity connections;
  • 7 million Africans benefited from improved access to water and sanitation;
  • 7 million Africans benefitted from improvements to agriculture;
  • 3 million Africans benefitted from access to better health care services;
  • 7 million Africans benefitted from improved access to transport.

He argued that the Bank did all these, while implementing major institutional reforms to improve institutional efficiency and effectiveness, noting that the Bank has rolled out its new Development and Business Delivery Model and five regional business development and delivery offices have been approved.

“To develop with pride, Africa must feed itself. Africa’s food import bill stands at $35 billion per year and is estimated to grow to $110 billion per year by 2025. This has negative consequences on macroeconomic and fiscal stability. Africa must rise up quickly and unlock the full potential of its agriculture,” he said.

According to him, Africa has 65 per cent of the uncultivated arable land left in the world to feed nine billion by 2050, so what Africa does with agriculture today will determine the future of food in the world.

“The key is to turn Africa’s natural comparative advantage in agriculture into a competitive advantage. We must accelerate access to high-quality seeds, fertilizers, irrigation, mechanized services and finance. And agriculture must be taken as a business all across Africa,” he said.

He urged that Africa must industrialize its agricultural sector to unlock wealth.

“To achieve this, Africa needs to establish Staple Crop Processing Zones and Agro-industrial Zones –fully enabled with physical infrastructure – to attract private agribusinesses to locate in rural areas, create market pull for produce of farmers, and reduce high post-harvest losses in the supply chains. By doing so, we will turn rural areas from zones of economic misery to new zones of economic prosperity,” he said.

Dr. Adesina said confidently, “We are taking action. That is why the African Development Bank has rolled out its Feed Africa High 5 and have committed to investing $24 billion in agriculture over the next ten years. That’s 400 per cent increase of annual lending to the sector. We are investing in companies like East Africa Trading Group, providing market access to millions of farmers. We have developed the Technologies for African Agriculture Transformation (TAAT), a new technology dissemination platform to take agricultural technologies to millions of farmers across Africa. As you’ve just heard from Bill Gates, we’ve jointly launched the African Leaders for Nutrition to help address the high malnutrition and stunting levels in Africa.”

To achieve these, particularly in agriculture, it is important to take into account post-independent Africa and what the continent could have achieved using agriculture as a catalyst and move away from talk to work.

Knowing what it is known now, and the admission that agriculture has the potential to spur economic growth, the required efforts should pointedly be in agriculture with the aim of making it the driver of economic growth in Africa. This must succeed, with the benefit of hindsight.

By Emmanuel K. Dogbevi

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