Unlocking Africa’s potential to create wealth from agriculture

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by Akinwumi Adesina, President, African Development Bank

There is an unbelievable contrast today in Africa: How can a continent with such an abundance of arable land, water and sunshine annually import food worth $35 billion? How can it be that the continent is not food secure? This must change.

We must change the narrative around African agriculture, which employs two-thirds of the population and accounts for nearly a quarter of the GDP. Agriculture is not a way of life, or a social sector. Agriculture is a business. A business that will help countries to diversify their economies, reduce their dependency on food imports, create jobs, and revive rural areas.

Migration out of rural areas is rising rapidly, and thousands of young people now jump on boats to the Mediterranean looking for new opportunities in Europe. The agricultural sector has four times the power to create jobs and reduce poverty than any other sector.

That is why we make the claim that we can diminish the migrant crisis in Europe by supporting agricultural transformation in Africa.

It is time that Ministers of Finance across the continent see the sector for what it is: the sector with the best potential to bring about macro-economic and fiscal stabilization.

The value of the food and agribusiness market is estimated to reach $1 trillion by 2030. This is an enormous opportunity for Africa, especially as it unlocks its agricultural and agribusiness potential to capture this market, while expanding regional trade. Africa may not be yet in a position to manufacture airplanes, but it can feed its growing population, and become a global powerhouse in food and agriculture. 

Feeding the estimated 9 billion people in the world by 2050 will depend on how Africa capitalises on having 65% of the world’s remaining arable land. By raising agricultural productivity, modernizing agriculture, developing agro-allied industries and investing in value-added processing for agricultural commodities, Africa can unlock its agricultural potential. As the private sector invests in large scale food processing and manufacturing factories across rural areas, and governments invest in integrated rural infrastructure – especially roads, rails, energy, water and irrigation – the cost of doing rural business will drop drastically.

New zones of economic prosperity will be created –where young people will be willing to live in the countryside and engage in profitable agricultural activities and non-farm and off-farm activities. A new generation of commercial farmers will emerge: younger, dynamic, technology-savvy and competitive. Smallholder farmers – the bulk of the farming population, the majority of whom are women – will be able to access reliable markets. Commercial banks and microfinance institutions will expand lending, as farmers secure markets for their produce and agro-industries expand Africa’s ability to compete in global markets.

Africa must think big and act big on agriculture, to help feed Africa. Africa may have the potential in agriculture, but you cannot eat potential. At a conference in Dakar this week, the African Development Bank is bringing together the best of the continent – including Ministers of Finance, Agriculture, Central Bank Governors, agribusiness people, farmers, civil society and scientists – to discuss the best hope of the continent: agriculture as a business.

How will this take place in Africa? How will agriculture become a sector that creates wealth rather than manages poverty? How will we move away from exporting primary commodities, to the point where we sell processed cocoa not cocoa beans, processed coffee not coffee beans, and textile instead of cotton? How will we move up the agricultural value chains, and finally take full advantage of the wealth of Africa’s soil, not just the wealth of its oils and minerals?

In Dakar, we will discuss how, within a decade, to end hunger and malnutrition in Africa. We will also debate how to eliminate extreme poverty in Africa, how to turn Africa into a net food-exporting region, and how to move Africa to the top of the global value chains through industrialization allied to agriculture. We will examine how Central Bank Governors and Ministers of Finance can work with multilateral development Banks such as the African Development Bank, the World Bank and the International Fund for Agricultural Development, to design and deploy at scale innovative financing instruments to make lending easier for farmers and agribusinesses, across entire value chains. We will discuss new ways of investing in agricultural corridors and staple crop processing zones that will be game changers for investments in the quality infrastructure and logistical systems which are needed to boost the rural economy.

When we do all this – backed by the political will of the leaders of this continent – we will change the narrative of African agriculture in ten years. Africa will feed itself, and fully unlock its potential to feed the world.

Feeding Africa –An action plan for African agricultural transformation

21-23 October 2015, Dakar, Senegal. #DakAgri2015