Tom Collins Correspondent
On the sidelines of the UN General Assembly in New York, Aliko Dangote, Africa’s richest man, told investors: “Agriculture, agriculture, agriculture. Africa will become the food basket of the world.”
Prime weather conditions, acres of empty space and well-established agricultural sectors averaging 33 percent of GDP, all make Dangote’s statement more than plausible.
Yet, Africa’s thought leaders and businessmen have been emphasising the importance of agriculture for quite some time, and to date, familiar problems remain.
According to a World Bank estimate, the African agriculture sector could be worth up to $1 trillion by 2030, but lack of technology, lack of investment and an ageing farmer population all put this figure and Dangote’s vision into question.
Only in the past decade or so has the sector seen a sustained development effort, but more needs to be done.
Vision versus reality
Agriculture is positioned at the forefront of nearly every African government’s development plan.
The received wisdom is that rapid economic development comes from developing smallholder farms, evidenced by Europe, North America and Asia’s historical development.
Africa has about 33 million farms of less than two hectares each, accounting for 80 percent of all farms.
Rather than create large commercial farms, many believe that by increasing the yields of African smallholdings, and by ensuring manufacturing capability to improve and extend value chains, Africa can retain its agricultural wealth, reduce imports, and profit from a surplus of goods in the market.
Speaking at the African Green Revolution Forum (AGRF) 2017 in Abidjan, Côte d’Ivoire, Joe Studwell, author and journalist, said: “I put it to you that smallholder agriculture is not just important; if you want to transform your society quickly there is no other way to do it.”
In 2003 the African Union echoed this belief and adopted the Nepad Comprehensive Africa Agriculture Development Programme (CAADP), which aimed to revive agriculture by addressing numerous issues as well as pledging that each African country should dedicate 10 percent of their national budgets to agriculture.
Faced with substantial budgetary constraints, not all African countries have been able to allocate 10 percent, but progress has been made most recently by Ivorian President Alassane Ouattara, who gave $200m to coffee and cocoa farmers to meet the CAADP requirements and become a net exporter of food.
Other notable public endeavours include Ethiopia and Nigeria establishing an Agricultural Transformation Agency (ATA) to coordinate activities between government ministries across central and local governments, and Rwanda exceeding CAADP expectations by giving more than 10 percent of its budget.
However, policy often lags behind vision and commitment and many countries still have vastly underdeveloped sectors.
Dr Agnes Kalibata, President of the Alliance for a Green Revolution in Africa (AGRA), said: “We are starting to see African governments beginning to get their act together but there is still work to do.”
Public-private partnerships fill gaps
At the top of the AGRF 2017 agenda was the importance of using public-private partnerships (PPP) to fill the space left over by government incapacity.
During a panel talk at the conference, Liberia’s outgoing president, Ellen Johnson Sirleaf, commended the cooperative model: “This forum comes at a time when Africa is more coordinated than ever, in its policies and strategies, and this synergy bodes well for the collaborative approach needed for a successful green revolution.”
Many argue that if African governments can better present Africa as a viable emerging agricultural market, then foreign investment and technological know-how could greatly benefit smallholder farms.
Forums like the AGRF work well in bringing together various stakeholders in Africa’s agribusiness landscape, and some important deals were made.
The Partnership for Inclusive Agricultural Transformation in Africa (PIATA) was formed at the forum and includes the Bill & Melinda Gates Foundation, the Rockefeller Foundation, and USAID.
The partnership earmarked up to $280m to increase incomes and improve the food security for smallholder households in 11 countries by 2021.
Maslaha Seeds Limited and Syngenta committed to a $1m investment in increased rice and seed production, while BlackPace Africa Group committed to multi-million-dollar deals to develop potato processing in Nigeria and Rwanda, and Kenya’s Agricultural Finance Corporation settled on investing $2m in lending to potato farmers — all of which illustrates the usefulness of the private sector in meeting demands.
Pressing concerns
Africa’s agricultural and agribusiness limitations are many and include both the way goods are grown and the way value is added.
In a report released by the Centre for Agriculture and Bioscience (CABI) at AGRF 2017, the fall armyworm — a large worm that spreads rapidly and destroys crops — has now infested 28 African countries.
The worm feeds on more than 80 crops and can cut yields by up to 60 percent, raising a substantial threat to agricultural output.
CABI estimates that the financial cost of the worm in just 10 of Africa’s maize-producing countries could be as high as $5.5bn a year.
Although many farms are starting to use new technologies to counter environmental concerns, such as disease-resistant seed strains, environmentally friendly pesticides and improved irrigation, yields remain significantly under their potential.
Finance is also a sizeable barrier to the upsizing of smallholder farms, as financial institutions rarely find agricultural projects bankable in Africa.
As Kalibata explains: “Banks are not in the business of losing money. It becomes about how viable smallholder farms are as entities that can hold and pay back money; that is what enables farmers to access finance.”
As an alternative to banks, more innovative methods of financing smallholdings are beginning to emerge, especially with the ubiquity of the smartphone and the greater connectivity of farms.
A young farmer at the conference said: “We need to find other channels of getting access to finance, we need to start working with other farmers to save money and borrow from other groups.”
Urbanisation and an ageing farmer population are also a concern, causing a quickly depleting workforce.
The average age of Africa’s farmers, who account for two-thirds of employment, is 60 and the youth in many rural areas leave for urban centres at home or abroad.
“You need to stop talking about making agriculture sexy and cool to young people, what needs to happen is to actually make it a business and to focus on young people who are taking the choice of investing in the sector,” continued the farmer.
Finally, many raw commodities are being exported across the world and much of their potential value gets lost in the process.
As the UK’s Lord Boateng said: “The global cocoa market is worth $100bn, Africa gets 2 percent of that because we don’t process and manufacture chocolate products in Africa.” — New African.