Promoting Investments in African Agriculture: Agenda 2063, to enhance the socio-economic transformation of the continent over the next 50 years
The importance of Africa's agriculture in contributing to food and nutrition security, poverty reduction and overall economic growth is well documented. However, the task of transforming Africa's agriculture into a modern and dynamic sector is a complex one, faced with a number of key challenges. These include limited investment, technologies, knowledge and infrastructure to link input and output markets across the continent.
For agriculture to make a meaningful contribution to attainment of the aspirations enshrined in Agenda 2063, the Africa Union's strategic framework for the socio-economic transformation of the continent over the next 50 years, increased levels of, and targeted investments are required. A transformed and modern agriculture will be key to achieving inclusive growth and sustainable development on the continent.
The transformation of Africa's agriculture is anchored in the Comprehensive Africa Agriculture Development Programme (CAADP). The Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods, adopted during the 23rd Ordinary Session of the African Unions Heads of State and Government, provides further impetus to the CAADP process and gives the direction for agriculture on the continent for the next 10 years. This essentially constitutes the agricultural component of the first 10 years' implementation plan of Agenda 2063.
The investments, which are required for this transformation process, should come from both the public sector and private sector. Whilst CAADP implementation in the first 10 years focused on mobilizing public sector financing to address the agriculture sector investment requirements, there is evidence that private sector investments will continue to be central to leveraging existing public sector efforts. Under the right conditions, private sector investments have the potential to drive pro-poor development and strengthen food security.
Recognition of the pivotal role of the private sector in the renewed push for agriculture and agribusiness development in Africa, informs efforts to leverage the private sector and other stakeholders. Indeed, one of the commitments in the Malabo Declaration which is on “Enhancing Investment Finance in Agriculture”, calls for increased involvement of the private sector, in its diversity, both local and international, in African agricultural development, especially targeting strategic agricultural commodities value chains at national, regional and continental level.
So what are the required levels of investment? According to FAO estimates, over the period from 2006 to 2050, the cumulative global investments required in Sub-Saharan Africa in agriculture and downstream support services amount to USD 940 billion [in 2009 USD]. Of this amount, about 66 percent will be required for agribusiness and agro-industries capital outlays, covering items such as cold and dry storage (USD 78 billion), rural and wholesale market facilities (USD 159 billion), first stage processing (USD 207 billion), mechanization (USD 59 billion) and other power sources and equipment (USD 115 billion). These investments will have to be made primarily by the private sector. The public sector will thus be confronted with the need to create and maintain conditions that favour investment in agribusiness and agro-industries by the private sector.
Consequently, The AUC and the NEPAD Agency have been making various efforts aimed at scaling up investments into the agricultural sector. The AUC Department of Rural Economy and Agriculture has organized a series of private sector fora, the outcomes of which have fed into the development of the Continental Agribusiness Strategy. To give further voice to private sector concerns, there are ongoing efforts at strengthening national agribusiness chambers, with a view to establishing a continental agribusiness chamber / platform in the near future. Furthermore, through the facilitation of the New Alliance for Food Security and Nutrition, hosted at the AUC, work is ongoing which aligns private sector investment priorities with public sector policy commitments. Similarly, through the Grow Africa Partnership hosted at the NEPAD Agency, efforts are made to increase private sector participation in agriculture and to accelerate the execution and impact of investment commitments.
The engagement of the private sector, within and outside the continent, should complement public sector investments in the agricultural sector, from both domestic and external sources, to deliver the required financing for the bold commitments in the Malabo Declaration in order to realize the transformation that will bring about food security and prosperity for the people of this continent.