KIGALI, RWANDA — African governments have been urged to boost the continent’s agriculture by accelerating the development of infrastructure such as roads and storage, increasing access to financial services such as credit and insurance, and dropping intra-African barriers to trade.
In spite of agriculture being an acknowledged as the leading growth driver for Africa, the potential of the sector’s contribution to growth and development has been underexploited mainly due to a variety of challenges, including the widening technology divide, weak infrastructure and declining technical capacity, panelists said on May 21 at the ongoing Annual Meetings of the African Development Bank (AfDB) in Kigali, Rwanda.
These challenges, they argued, have been exacerbated by weak input and output marketing systems and services, slow progress in regional integration, land access and rights issues, and limited access to affordable credit.
These were some of the issues highlighted during the high level dialogue about this year’s Africa Progress Report – Grain, Fish, Money – which highlights how Africa must boost agriculture to benefit the two thirds of Africans who depend on farming for their livelihoods.
The report argues that boosting agriculture is not only an effective strategy for poverty reduction – it represents tremendous economic opportunity.
In 2011, Africa imported food worth $35 billion. This is a market that African farmers, not foreign business, could be supplying. As Grain, Fish, Money shows, Africa’s agricultural productivity could double within five years.
Speaking at the interactive session, Donald Kaberuka, president of the AfDB, emphasized that increasing productivity in agriculture is critical for sustainable development and poverty reduction.
“Improving agricultural productivity is not rocket science. People know what to do – the question we must ask is why people are not doing it?” he said, pointing out that several countries, including Cape Verde and Rwanda, are already demonstrating the possibilities for agricultural growth.
The AfDB, through its investments in rural infrastructure (rural access roads, water management systems for irrigation, electricity generation/distribution and proper storage facilities); agricultural productivity enhancement through support to research; and sector capacity-building and knowledge-sharing on appropriate development policies for the sector in Africa, has helped to improve agricultural productivity and competitiveness in the region.
“Agriculture should not been seen just as a development project – it should be seen as a business. Whether you are talking of small scale or medium size – this is very important. African farmers are living in antiquity by the material that they use, inadequacy of infrastructure and poor access to markets. This should not be,” said Olusegun Obasanjo, former president of Nigeria and a member of the Africa Progress Panel.
Obasanjo emphasized the need to invest in technology to modernize agriculture in Africa and increasing access to affordable finance for smallholder farmers as critical to increasing productivity.
He also noted that though few farmers have access to finance, the cost of it is still excessively high with interest rates ranging between 18% and 20%.
“There is no way farmers can make it at that rate of interest unless they are producing cocaine,” he said, underscoring the need to provide affordable financing to farmers.
Viswanathan Shankar, the group executive director and chief executive officer, Standard Chartered Bank for Europe, Middle East, Africa and Americas, observed that since the majority of Africans depend on agriculture, investing in the sector is critical to reducing inequality and creating jobs.
He noted that access to finance can be improved by investing into the entire agriculture value chain.
In her remarks, Claire Akamanzi, the chief operating officer of Rwanda Development Board, said Rwanda has managed to sustain growth in agriculture on average at 8% over the last decade due to the Government’s heavy investment in the sector, including ensuring access to financing for small farmers.
Over the past few decades, a growing concern about Sub-Saharan Africa’s agricultural sector has been its poor performance in terms of productivity and yield of main food staples, as well as market access and product pricing.
These challenges tend to worsen the financial welfare and food security of smallholder farm households. When inclusive agricultural and agribusiness models enhance productivity growth, this contributes significantly to food security, nutrition and poverty alleviation.