Developing African Agriculture for the Continent’s Inclusive Growth
Africa is now the world’s second fastest-growing continent. Despite a decade of seismic shifts in the global economy, the continent has continued to accelerate its economic growth, defying the pessimists and creating major improvements in its Human Development Indicators.
Yet these gains have been clouded by a crisis in jobs, particularly youth unemployment, and growing inequality. Economic growth, it is clear, has not been enough to stem the poverty and growing economic inequalities on the continent. The answer here, the African Development Bank believes, lies in creating more inclusive growth on the continent.
“Deliberate policies to reduce inequalities and promote inclusion are now needed more than ever before. It is time to focus on people’s expectations: decent work, a living wage, access to basic services, more democracy, and accountable governments,” the Bank’s Chief Economist and Vice-President, Mthuli Ncube, says. “Promoting inclusive growth is now a matter of urgency.”
With a production of close to one third of the continent’s GDP and employing some 65 to 70 per cent of its population, agriculture is, without doubt, a critical lever in efforts to create more inclusive growth in Africa.
The sector has enormous transformative potential. Africa is endowed with a wide diversity of agro-ecological zones, creating vast potential for agricultural products in both domestic and external markets. Sub-Saharan Africa (SSA) has about half of the world’s uncultivated land as well as vast reserves of untapped water, making it suitable for a large expansion of the sector, particularly as global and continental demand for food and agricultural products soars. African countries, for instance, import some US $25 billion worth of food each year. Only about US $1 billion comes from other African countries. This creates a large market for intra-African trade in agriculture and opportunities for the continent’s numerous farmers.
Yet if Africa is to tap this potential, new approaches to the sector will have to be out in place. To help secure long-term inclusive growth on the continent, African agriculture will require a shift from the highly diversified, subsistence-oriented farming in most of the continent, to more market-oriented production, with more agro-processing and agribusiness, as well as improved access to markets.
The agenda will also include practical measures to strengthen linkages between smallholder farmers and larger, market-oriented farming and agribusiness operations. This will call for improved supplies of inputs and the marketing of produce along the value chains. This will, in turn, demand improved rural-agricultural infrastructure.
There will be need innovation and the adoption of new technologies suited to local environments. The West African Rice Development Agency’s “New Rice for Africa” (NERICA), which combines the qualities of high-yield Asian and high-resistance African rice varieties to produce a variety uniquely suited to African conditions, is an example. Meanwhile, farming will also have to be made more attractive to the younger generations, prone to fleeing the rural areas for the cities.
In spite of the abundance in some areas, water scarcity remains a formidable problem in others, creating serious food insecurity. Deforestation and other corrosive practices also continue to erode African lands and diminish output. There will thus be a need for improved natural resource management. Here, the emphasis will be on improved conservation, utilization and governance of land, water, and forest resources, as well as the preservation of biodiversity.
Such a people-centered transformation of African agriculture will enable African farmers to tackle hunger and food insecurity within the continent, while also exploiting new opportunities in the global and continental markets, creating more inclusive growth.
The private sector will be an important partner for progress. The successful experiences of Asia and Latin America in agrarian reform and rural transformation show that it has played an important role in responding to investment opportunities in agriculture, especially in the light of globalization.
A scenario in which the state serves as a catalyst, providing the vision, strategy, and long-term commitment for agricultural transformation while also creating an enabling policy environment and institutional capacity to stimulate private sector investment in agriculture and agribusiness, will be appropriate.
For its part, the AfDB has already taken a lead role in this agricultural transformation for more inclusive growth. Unlocking Africa’s enormous agricultural potential is a prime concern in its 2013-2022 strategy which it also emphasizes this need for inclusive growth. Already, it is a major contributor to the development of Africa’s agricultural infrastructure through investments in rural roads, irrigation, storage facilities and markets, its areas of comparative advantage. It works in partnership with specialized agencies such as the Food and Agriculture Organization, the International Fund for Agriculture Development and others better positioned to intervene in other parts of the value chain, such as seeds, fertilizer, research and extension.
The Bank is also a leading financier of private investment in agriculture and agribusiness and has an operational trade finance program focusing on agriculture, among other sectors, in place. Its new 2013-2022 strategy reinforces its role in the development of African agriculture for the continent’s transformation and inclusive growth.