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    High Yield

    By Boaz Keizire

    As world heads of state met at the United Nations General Assembly (UNGA) last month, Africa was represented by several presidents, among them Ethiopia’s Prime Minister Hailemariam Desalegn, Zambia’s Edgar Lungu and Rwanda’s Paul Kagame.

    I was there too.

    The rest of the world had its eyes on Donald Trump, Bill Gates and Angela Merkel leading several institutional and state presidents to an event that had great political import following Mr. Trump’s earlier dismissal of the UN.

    But, amidst all the tension and accompanying political undertones, the African leaders nonetheless pulled away from the drama of the main assembly to hold a side-meeting, to which Mr. Gates was also invited, to engage on the state of agriculture in Africa.

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    Quuen F1 Cabbage variety at the 2017 Nyeri Agricultural Society of Kenya Show. PHOTO/JAPHET RUTO

    READ ALSO: African agriculture: who will own the future?

    In its own ‘back room’ way, far from the cameras and eyes of the media, that African side meeting at the UNGA was ground breaking, as the heads of state supported a measurement tool to achieve accountability in making the policy and many other changes, including investment, to stimulate the continent’s agricultural sector.

    The potential for agriculture to usher in a wealthier future for Africa is enormous, but for an industry that is dominated by small holders, it requires the mending of filling of multiple gaps, all of which are making it harder for our continent’s farmers and agripreneurs to draw the full potential from our vast lands.

    But for the heads of state to speak to the merits of measurement, country by country, and government accountability in delivering an agricultural transformation was a moment that I, personally, shall never forget. For me, it represents a milestone that many of us have worked long and hard for.

    READ ALSO: Measuring Africa’s agricultural takeoff is set to make billionaires, from ‘poor men’s fields’

    The agricultural scorecard idea was first mooted at the 2014 African Union Heads of State Summit in Equatorial Guinea, where African leaders agreed to a common set of targets for agricultural development and to a biennial review of progress made against these goals: in a commitment now popularly known as the Malabo Declaration.

    The African Union Commission and the NEPAD Agency have been leading the review process through the collection of data on a set of 43 indicators from its 55 member countries.

    With the findings of this first biennial review now set for presentation at the African Union heads of state summit in January next year, it was a wholly new experience, too, to hear Gates, one of the non-state world leaders and philanthropists at the meeting, comment on the enthusiasm for the scorecard concept, as he encouraged participants to move quickly to take advantage of the momentum created to secure support for the tool.

    “I am really enthused about the call for a scorecard, as it can be very catalytic,” said Gates.

    Gates’ sentiments were supported by businessman Dr. Strive Masiyiwa, who recommended quantitative tracking as a way for monitoring progress and encouraging best practices.

    The agricultural scorecard draws its inspiration from the success of similar tools, like the African Leaders Malaria Alliance (ALMA) Scorecard for Accountability and Action, which have seen countries across the continent act to eradicate the disease from the continent by 2020.

    READ ALSO: Major Deals to Accelerate Africa's Path to Prosperity through Agriculture Agreed

    Between 2011, when the first ALMA scorecard was released, and 2015, some eight countries, including Cape Verde, Uganda and Ethiopia, reported a reduction in malaria incidence of 40 per cent or more, in a drop that has, in part, been attributed to the accountability framework that has been provided by the ALMA scorecard.

    Kenya’s Cabinet Secretary for Foreign Affairs, Amina Mohammed, who sat in for President Uhuru Kenyatta at the UNGA side-meeting, expressed her pleasure at seeing resources being channeled towards the creation of a similar tool for agriculture, indicating that it holds the promise of improving the state of the sector across the continent, “just like the ALMA scorecard helped ramp up efforts in the fight against malaria”.

    AGRA president, Dr. Agnes Kalibata, one of the leaders that have been spearheading the development of the scorecard, also knows too well the importance of the accountability tool, which she hopes will, “build on and from the Biennial Review, but be designed for and by Heads of State to track progress and share best practices”.

    Overall, the agriculture sector received significant attention throughout the five-day UNGA with many speakers declaring it as the shinning hope of revival for a continent that has long held the promise of world leadership in food production.

    Anne Désirée Ouloto, the Minister of the Environment and Sustainable Development of Côte d'Ivoire, affirmed that the West African country’s outstanding GDP growth continues to be driven by agriculture, with agricultural transformation at the centre of its strategy for overall structural transformation.

    Ethiopia’s Prime Minister, Desalegn, also emphasised the importance of agriculture for economic growth and development in Africa, highlighting the need for new policies and investments to transform the sector.

    “Agriculture has been a key driver for Ethiopia, and has made it among the fastest growing economies in Africa,” he said.

    The response by various Heads of State and other world leaders to the prospects of a high-level agricultural scorecard now confirms that Africa is indeed ready for the second revolution, one which will emanate from our farm lands.

    Boaz is a Head of Policy and Advocacy at AGRA and also a 2017 Fellow for the Aspen New Voices Fellowship 

     

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    Kenya is set to benefit from an initiative that will scale up agriculture as a business through value addition, led by the private sector and enabled by the public sector, and using innovative financing mechanisms, the strategy aims to end hunger and rural poverty in Africa in the next decade.

    The initiative by African Development Bank is a strategy for a competitive and inclusive agribusiness sector that creates wealth, improves lives and secures the environment.

    “Feed Africa: Strategy for Agricultural Transformation in Africa, 2016-2025,” received unanimous endorsement by Executive Directors of the Bank Group in Abidjan, Côte d’Ivoire, on Wednesday, May 22, 2016. The document was widely reviewed by global stakeholders, peer institutions and partners as well as through regional consultations held in Rabat, Kinshasa, Lusaka, Dar es Salaam and Accra.

    READ ALSO: New Crop with Potential to End Hunger in East Africa Introduced

    This is the second of the Bank’s High 5 priorities – Light up and power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and improve the quality of life for the people of Africa – a blueprint for the implementation of its Ten Year Strategy 2013-2022.

    Realizing the objectives of the strategy would involve increased productivity; value addition; investment in infrastructure; creating an enabling agribusiness environment; catalyzing capital flows; ensuring inclusivity, sustainability and effective nutrition; all in a coordinated manner.

    The idea is to drive transformation through 15 priority commodity value chains in given agro-ecological zones specifically to achieve self-sufficiency in key commodities such as rice, wheat, fish, palm oil, horticulture, cassava; move up the value chain in key export-oriented commodities like cocoa, coffee, cotton, cashew; create a food-secure Sahel in sorghum, millet, livestock; and realize the potential of the Guinea savannah in maize, soybean and livestock.

    The Feed Africa Strategy makes a strong case for reversing the situation of a continent that spends US $35.4 billion on food imports annually despite being home to 65% of the world’s undeveloped arable land.

    Some 70% of Africa’s population and about 80% of the continent’s poor who live in rural areas depend on agriculture and non-farm rural enterprises for their livelihoods. This growing multitude is increasingly unable to meet its basic food needs as population pressures grow, land and water resources become scarce and degraded and agricultural productivity stagnates.

    READ ALSO: Measuring Africa’s agricultural takeoff is set to make billionaires, from ‘poor men’s fields’

    The total investment for the realization of the transformation agenda over 10 years is estimated at US $315-400 billion with annual returns of US $85 billion, when fully funded.

    The Bank will itself invest US $24 billion and leverage additional investments through equity, quasi equity, debt and risk instruments to catalyze investments at scale from the private sector and with co-financing from traditional donors and new players. The identified financing gap estimated at US $23 billion can be met using innovative de-risking tools and blended financing from combined sovereign, pension and private equity funds, according to Chiji Ojukwu, Director of the Bank’s Agriculture and Agro-industry Department, who presented the Strategy at the Board.

    The Board commended staff and management for a well-crafted Strategy and emphasized the need to monitor its implementation closely, while paying special attention to issues related to inclusiveness, land and resource mobilization. They also urged special consideration for small island countries and fragile states, mainstreaming of policy issues, and engagement with the private sector and civil society.

    For his part, AfDB President Akinwumi Adesina, who chaired the Board, underscored the overwhelming endorsement of the Bank’s agricultural transformation agenda from peer institutions such as the Food and Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural Development (IFAD) and the UN Economic Commission for Africa (ECA), along with the private sector and governments.

    READ ALSO: Africa Food Prize competition submissions closing soon

    The agricultural agenda in particular and the High 5s in general are critical at this time when “almost all of Africa’s rural areas have become zones of economic misery. We should turn them into zones of prosperity,” Adesina said.

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    Agriculture is instrumental in Africa’s poverty: it must also be instrumental in its wealth. Only through agricultural regeneration can growth, diversification and job creation occur for African economies, for no region of the world has ever industrialised without the agricultural sector being first transformed.


    In short, the future of Africa depends on agriculture. But Africa cannot develop quickly if farming remains largely a subsistence activity. 60% of the population are involved in farming, yet it accounts for less than one seventh of its GDP, and African agricultural yield is the lowest in the world.

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    A farmer weeding his maize garden. Between $30 and $40 billion a year over the next ten years is needed to transform African agriculture and create the vibrancy.


    So Africa is late in developing but even this very fact offers a large scale opportunity for international investors and big-ticket entrepreneurs.


    Economic diversification and lasting wealth creation begins with a vibrant agriculture sector. Between $30 and $40 billion a year over the next ten years is needed to transform African agriculture and create the vibrancy. It’s a lot of money, but it is available, even within Africa, if the projects are good enough.


    And they ought to be good enough, since such investments will create new markets worth at least $85 billion per year in added revenue by 2025. That’s a potential return of at least 100%. But which producers will own, influence and leverage these markets? Most, surely, should be made in Africa? We must own our development. The commitments of last year’s AGRF gave us a flying start with $30 billion over 10 years.


    And with such transformation would come the reduction of Africa’s net trade deficit in food, potentially bringing net savings of up to $100 billion per year. We must bring an end to the costly and damaging anomaly of the net deficit in food. No more should Africa produce what it does not or cannot consume, and no more should it consume what it does not (but could easily) produce.


    Other related measures would deliver similarly impressive albeit incalculable financial impacts: fiscal inclusion, tax reform, domestic revenue mobilization, higher remittances, reduced corruption and better governance.


    There are also still huge and unexploited growth opportunities in Africa. The continent is endowed with 65% of the world’s uncultivated arable land and huge reserves of water. Sub Saharan Africa also has 10% of the world’s oil reserves, 40% of its gold, and up to 90% of its chromium and platinum. And those are just the known reserves – the whole continent is one of the world’s largest unexplored resource basins. Africa may suffer from poverty but it is an unimaginably rich continent, even after fifty years and more of commodity exploitation.


    But how to bring about this transformation? How to close this potential deal of the century? Public and private sector should be acting together. They are needed to provide significant opportunities for Africa’s emerging innovators and entrepreneurs, not to mention its financiers, fund managers and financial advisers.


    Over the past few years, the Bank has been able to bring about a comprehensive re-evaluation of the potentially enormous role of agriculture in the transformation of Africa, and the AGRF has been a critical factor in the shared objective with the Bank of bringing about the green revolution in Africa.


    The technologies to feed Africa exist already. This is the period of climate change. High yielding drought-tolerant maize can allow farmers to grow a good crop even during droughts. Some cassava varieties can yield 80 tonnes per hectare. High yielding rice varieties that meet or beat international standards of imported rice now exist. Orange-fleshed sweet potatoes allow us to address the problem of vitamin A deficiency. Tropical and drought-tolerant wheat varieties are being grown in Nigeria, Kenya and Sudan.


    These technologies need to be scaled up for widespread adoption. This will not happen by itself. It will require specific incentives. In particular, the African Development Bank and the World Bank plan to jointly provide $800 million through “Technologies for African Agricultural Transformation”, a flagship programme for the scaling up of agricultural technologies to reach millions of farmers in Africa over the next ten years.


    For agricultural transformation more generally, the African Development Bank has committed $24 billion to agriculture over the next 10 years, with a sharp focus on food self-sufficiency and agro-industrialization.


    It’s also why we launched the Affirmative Finance Action for Women in Africa (AFAWA), to make an extra $3 billion available for women entrepreneurs, in order to improve food production levels on the basis that women are demonstrably more dependable and bankable than men.


    Getting our youth involved in agriculture as a business is crucial. That is why the Bank launched the ENABLE Youth program. This program will provide access to capital and capacity to “Agripreneurs” to create about 300,000 agribusinesses and 1.5 million jobs in 30 countries across Africa, with an estimated investment of $15 billion over the next five years.


    With so many entrepreneurs now on the case of farming, an issue to resolve quickly is the current low level of commercial financing for agriculture. Finance and farming have not been easy partners in Africa, and the farming sector receives less than 3% of the overall financing provided by the banking sector.


    The African Development Bank is promoting national risk sharing facilities in every country to leverage agricultural finance, similar to the Nigeria Incentive-Based Risk Sharing for Agricultural Lending (NIRSAL), a facility designed to reduce the risks of lending to Nigerian agriculture value chains. The impact in Nigeria was massive. Over four years, 15 million farmers were reached, 2.5 million of them women. Food production expanded by over 21 million tonnes. Today, several African countries are adopting the approach, as well as others such as Afghanistan.


    I predict that the next few years will see agriculture emerge fully from poverty and subsistence to become the next big booming business sector of Africa, with entrepreneurs, financiers, inventors and innovators all gathering round a honey pot of bankable projects, programmes and opportunities. After all, who eats copper? And who drinks oil? Africans need to become producers and creators, and not just consumers, in the fast-moving enterprising business of food.


    The African Development Bank will play its active role as a catalyst of this activity, and I am confident that we will soon see Africa’s first tranche of billionaires coming from the farming and food sectors.

    Dr Akinwumi A. Adesina, President of the African Development Bank. He authored this op-ed ahead of the African Green Revolution Forum

     

     

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