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).
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