Of all the challenges that Africa faces, there is one that transcends and embraces all the others: I mean agriculture. Our continent today runs the risk of missing a unique opportunity to develop and offer its youth the jobs it has the obligation to provide if it wants to avoid social implosion.
Agriculture, which employs or provides livelihoods to 60% of the population while contributing 20-30% to Africa’s GDP, is the sector that could by itself enable to save the greatest number of Africans from extreme poverty while giving them their dignity back.
And yet, it typically attracts less than 5% of lending from financial institutions on the continent, leaving farmers and agricultural enterprises starved of the capital they need to operate and grow their businesses.
The scope for growth is all the more important that the situation is highly paradoxical: Africa imports the equivalent of $ 50 billion of food every year. Yet more than half of the arable land unexploited in the world are on the continent!
The 12th CAADP PP taking place in Ghana this week is organised around the theme “Accelerating Implementation of CAADP through Innovative Financing and Renewed Partnership”. The theme reflects the urgency being placed on implementation by the African Union and its members.
To solve the agricultural equation, we must join forces and continue our efforts to define a common agricultural policy. In 2003, in Maputo, we really started to turn the corner in laying the foundations for pan-African agricultural initiatives. The Heads of State and Government of the African Union then decided to devote 10% of their national budgets to agriculture. In 2014, in Malabo, they reiterated their commitment to further increase investment, both public and private, in agriculture.
Innovative financing will be key in unlocking Africa’s Green Revolution. Innovative financing is a means of mobilizing additional resources for investment in agriculture or solving long-running market failures that can unlock private investment. Now we should aim at a growth model that is public-sector enabled, and private sector scaled.
Because of the rural and dispersed nature of agricultural production, where banks and formal financial institutions often lack a presence, mobile technology provides a convenient and low-cost distribution channel to reach farmers and agro-enterprises with electronic payments and information products, as well as savings, credit, and insurance products, among others. It can also help to transfer targeted financial support for small farmers and agribusiness.
Investments in infrastructure will also help drive increased private investment and production in the agriculture sector. Often resulting in public goods that benefit a broad base of economic activity, investments in irrigation, transport and market infrastructure in particular are critical to improving economic returns and productivity in the agriculture sector.
The next step is to put in place a system that ensures the prices and the flow (or storage) of production, combined with a system of variable levies at the external borders of Africa (taxes on imports) protecting productions potential competition from products from outside. This will require innovative financial mechanisms and technologies as well.
A proactive agricultural policy should be common because it requires us to share not only our resources, but also our minds and our wills. It should be common because it cannot be implemented without regional infrastructure, energy and logistics in particular, that will allow our farmers to compete and enter into a process of value creation. We should harness the latest innovations and technologies because Africa has no other option but to leapfrog if it wants to realize its tremendous potential.
*A contribution by Ibrahim Assane Mayaki is CEO of the New Partnership for Africa's Development (NEPAD).... Linking agrobiz, sustainable environs, people & technology