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Presentation at the 5th Annual Agribusiness and Economic Summit, held at the United Nations in New York
Dr. Damian Ihedioha, chief agro-industry officer, represented the Bank at the 5th Annual Agribusiness and Economic Summit, held at the United Nations in New York.
Ihedioha started with a goodwill message on behalf of Dr. Akinwumi Adesina, the President of the African Development Bank. Below is a summary of the presentation.
In the pursuit of its mandate to achieve rapid economic transformation and broad-based growth and development, the African Development Bank prioritised agro-industrial transformation through its Feed Africa and industrialisation strategies.
The two drivers of the strategy are import substitution and export promotion through agricultural value chain development. It is inconceivable that a continent with abundant arable land, soil variety and fertility, water, wind and solar resources, should be a net food-importing region.
Africa has 65% of all the arable land left in the world to meet the food needs of 9 billion people on the planet by 2050. This is a huge untapped potential. Nothing is more important then to the long-term well-being of the African people than the success of its food systems.
The abundance of safe and nutritious food is the foundation of good health and cognitive development. Africa must rapidly transform the agriculture sector in order to meet the growing food needs of its urban population, and to create much-needed jobs for our youth and boost the incomes of millions of farmers – the majority of whom are women.
To succeed in transforming African agriculture, the Bank considered the sector as a business, rather than a development project. A full value chain approach, from farm to fork, is a necessity for interventions to meet development impacts.
The Bank encourages and involves the private sector, from modern input supply companies, mechanisation services, irrigation and water management services, to warehousing facilities, commodity exchanges, food manufacturing and processing companies, transport, logistics, and storage services.
Africa’s rural areas need opportunities to unlock their huge potential and to help lift millions out of poverty. Revamping rural infrastructure, expanding rural energy, mobile telephony and access to finance will increase income growth, employment, financial inclusion, education and boost quality of life across our rural areas.
The Bank is building Africa’s private sector to create wealth. By developing financial markets and leveraging private capital markets, businesses will be able to access long-term financing, which is crucial to invest in needed machinery, equipment and working capital.
By unlocking the potential of small, medium and large businesses, Africa will fast-track industrial growth and development. As businesses pay taxes, domestic resource mobilisation will grow and support national and regional development from within Africa. The Bank hence prioritises the development of an agri-business sector to drive the industrialisation of the continent.
In regard to Feed Africa, the Bank is supporting a number of initiatives to accelerate agro-industrialisation. These include:
(i) the Technologies for Africa’s Agricultural Transformation (TAAT) programme, which follows a commodity value chain approach in eight different interventions/value chains, namely: self-sufficiency in production, cassava intensification, food security in the Sahel, transforming Africa’s savannas into breadbaskets, revitalising tree plantations, expanding horticulture, expanding Africa’s wheat production, and fish self-sufficiency.
Several value chains are supported within the identified intervention areas. For instance, with the food security intervention in the Sahel, the value chains include sorghum, cowpea, millet, dairy, and poultry.
We estimate that interventions in the 18 identified key value chains will cost $315-$400 billion over the period 2016-2025. The Bank will invest $24 billion over this period, a 400% increase from its current financing of the agriculture sector. Private sector investment is critical.
With the right technologies, skill acquisition, inputs and access to finance and to markets, smallholder farmers will generate the surplus that agro-industries need to add value and increase the shelf life of food products.
Governments are reducing their direct involvement to promote a system that allows private businesses and smallholder farmers to thrive, guided by a supportive regulatory environment. Increased private sector involvement in agriculture will increase the fiscal revenue base of the economy, encouraging governments to support the transformation of African agriculture and meet their commitments made in Maputo in 2003 and Malabo in 2014.
(ii) The Implementation of Post-harvest and Agro Processing (PHAP) will examine policy formation and institutional strengthening, agro-processing and storage facilities, technologies to reduce post-harvest losses, to add and develop value, and provide better access to production.
(iii) The African Fertiliser Financing Mechanism (AFFM), will arrange investment into fertiliser production among smallholder farmers. The funds will use the credit guarantee to mitigate the issue of collateral and make financing more accessible to fertiliser producers. It will create an enabling environment to mobilise the investments needed to achieve the target of 50 kilograms of fertiliser use per hectare. By raising the rate of fertiliser usage in Africa, the AFFM plays an important role in supporting and attaining the objectives of the Feed Africa Strategy.
(iv) The African Development Bank is currently supporting governments in the development of agro-processing zones in agricultural corridors of high production to aggregate infrastructure, value-addition facilities, market platforms and agribusiness support institutions to increase output.
(v) The Bank initiated the ENABLE Youth programme to strengthen the capacity of young people dedicated to a career in agriculture and agribusiness.
(vi) The Agriculture Fast Track fund (AFT) is a grant-making facility that supports the preparation of agriculture investment projects. The Fund supports African small and medium enterprises by offsetting the costs of project preparation activities, and seeks to develop a pipeline of bankable projects.
During the Summit, the Bank also chaired a session on inclusive financing for rural farmers grappling with the impact of climate change.
Below are the links to the conference sessions
http://webtv.un.org/search/1st-meeting-the-5th-annual-agrobusiness-and-economic-industry-summit-accelerating-innovation-worldwide-through-partnerships-and-roadmaps/6063617138001/?term=5th annual agro industry summit July 24, 2019&sort=date
http://webtv.un.org/search/2nd-meeting-the-5th-annual-agrobusiness-and-economic-industry-summit-accelerating-innovation-worldwide-through-partnerships-and-roadmaps/6063683748001/?term=5th annual agro industry summit July 24, 2019&sort=date