In this interview he granted to us shortly after a presentation on agriculture, during AEC in Addis Ababa, AfDB’s Principal Evaluation Officer, Detlev Puetz, suggests new ways for managing the crisis and supporting a post-crisis renaissance in Africa.
“How to have African middle class, at least partly, embrace the great traditions of agriculture trade and business in Africa, and not selling out to foreign interests. These are for me the key questions,” Bank Group Principal Evaluation Officer, Detlev Puetz said.
Question: Agricultural development programmes in Africa, in the past, performed below expectations and potential. In your presentation during the African Economic Conference, you mentioned new areas that can be explored. What needs to be done differently to capture the international winds of change?
Answer: Africa has vast underutilized agriculture and natural resources. Most importantly, we need more volume and steadiness in agriculture investments and strategic planning, with sustained public investment levels for the sector at around 10% of public budgets (as committed in the 2003 Maputo declaration) and good business incentives for private sector investments, particularly in marketing, rural finance, and agri-business. Secondly, more and better infrastructure needs to bring down the costs of doing business in Africa. Enhancing the provision of public services, including policy planning and regulatory services, farm extension and information systems, and partnering with emerging farmers associations and private entrepreneurs is a third important point. And above all, the conditions for innovations and productivity growth have to become right, with high-quality regional bio-technology, new product and market research institutions with critical mass. This is summarized as the 4 “I”s: investments, infrastructure, institutions, and innovations. The transformation of smallholder farmers into rural commercial entrepreneurs is the challenge.
Question: Why is regional integration for agriculture particularly important in the current financial and economic crisis?
Answer: More regional integration and regional thinking could achieve four major things: (i) increase the competitiveness of the sector by reducing marketing costs and producing larger markets, thereby attracting agro-industry and traders; (ii) enhanced stabilization of agriculture supply and prices, and balancing high price fluctuations from world markets or temporary local production deficits, thus facilitating more long-term planning; (iii) adoption of harmonized policies and standards, for instance on intra-regional and external trade tariffs, on the management of common natural resources (such as river basins and forests) and on industry standards; and (iv) creating a critical mass of research skills and funds to develop, adapt, and disseminate innovative technologies and products, from bio-technology for less crop diseases to new bio-fuels that could radically transform the rural landscape.
All these things, enhanced competitiveness, stabilization, harmonized policies and standards and critical innovation capacity, are important for agriculture to help African economies to provide a safety net, employment, and food security in these days of crisis, and to capture the expected post-crisis global opportunities for the sector. The North African countries have demonstrated that agriculture remains a critical sector for growth impulses, regional balance within countries, and poverty reduction long after its share in GDP gradually declines when economies grow and become more urban. And there are many new commodity demand and trade opportunities for agriculture on the horizon which could be captured. The financial crisis has drawn much attention to sustainable development and climate change, and new ways of looking at natural resource management and the diversity and quality of agriculture-based commodities. Diversification and innovation are a new challenge for agriculture and rural resource management.
Question: What are the overall obstacles to agricultural development in Africa?
Answer: Particularly in Sub-Saharan Africa agriculture has been largely neglected as a public policy issue for more than a decade. Only the temporary 2008 food price hike and the current economic crisis have refocused attention on the sector. As a result the recent joint evaluation by AfDB and IFAD of sector policies and operations identified three obstacles: first, a policy gap, with too few efforts to come up with strategic knowledge solutions to the heterogeneous opportunities and constraints of African agriculture, at country and regional level, and too little capacity to coordinate and implement them. NEPAD’s Comprehensive African Agriculture Development Programme is one of the efforts to be supported more strongly in this area. Secondly, the policy and governance capacities of many African countries’ sector institutions have seriously eroded over time, sometimes to the point of dysfunctionality, making it very difficult for governments and external donors alike to implement their policy and investment agenda. An example is the problem in implementing an ambitious international agenda on gender and support for Africa’s many women farmers. Third, as many things need to be done and individual partners have to be selective in their contributions, we have to build purposeful partnerships among African governments, donors, civil society, and private sector, or in other words, the overall “aid architecture” has to be redrawn. For this we have to establish and support better coordination mechanisms in countries and regions.
Question: What did you learn at the conference? What are your expectations for follow-up?
Answer: These have been exciting and heady days, with an old economic order apparently disassembling and a new one slowly appearing out of the mists. There is new enthusiasm for fundamental macro-change, from the more restrictive supply-side neo-liberal model of ‘managing poverty’ to a more expansive demand-side, diversified sustainable growth model and the prospects of large capital inflows from new private and public investors, in particular from Asian and Arab countries: From an aid dependency to a self-determined approach.
But I feel that this enthusiasm is not always matched with equal enthusiasm and know-how on building up the governance, business and social climate to mobilize Africa’s own minds and savings, to attract individuals from the African Diaspora, companies and FDI, and repatriate local capital. How to motivate and build up a new African middle-class, invested at home? And how to have this middle class, at least partly, embrace the great traditions of agriculture trade and business in Africa, and not selling out to foreign interests. These are for me the key questions. And hope for the future.