In a special session Monday at the World Economic Forum’s Sustainable Development Impact Meetings 2023, Kenyan President William Samoei Ruto, offered a grim assessment of the current situation of agriculture on the continent: Agricultural production in Africa is currently the lowest in the world, with severe implications on nutrition and food security. As of the end of 2022, this has left approximately 31.8 million people in East Africa in dire need of emergency food assistance, including 6.1 million children under the age of five.
“The numerous cases of hunger constitute a humanitarian crisis, highlighting the underutilization of our continent’s immense potential for high productivity and surplus food production,” Ruto said. “In fact, it is a paradox: The account of Africa’s starvation amid plenty is parallel to the account of Africa’s poverty amid resource abundance and underdevelopment in the middle of huge potential.”
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According to the president, the worsening food insecurity can be avoided in Africa’s future by governments forging innovative partnerships with the private sector to deliver the type of financing that Africa’s food producers desperately need.
He pointed to positive examples of innovative private sector-led initiatives to help Africa better realize its agricultural potential. Ruto singled out Sanergy, a Kenyan company that converts organic waste into fuel, fertilizer and animal feed and has expanded its footprint in Kenya, creating hundreds of jobs; Nairobi-based SunCulture, which uses solar energy for radiation and has made its technology accessible to over 10,000 farmers through an innovative “pay-as-you-go” model; and Del Monte, which has recently invested Sh 809 million in a new fresh fruit packing facility that sources from 2,000 Kenyan farmers.
Samantha Power, US Agency for International Development (USAID) Administrator, noted that the small and medium enterprises that comprise so much of Africa’s agricultural sector find themselves too big for microfinance and too small for bank loans. She stressed the potential to transform subsistence farmers into entrepreneurs – a change that has the potential to lead to improved livelihoods and educational opportunities for children, thus breaking the cycle of subsistence farming for the next generation.
Initiatives like USAID’s Feed the Future aim to help with this transformation by connecting small-scale farmers with global agribusinesses – “matchmaking,” as Power described by way of example, “between Rwandan growers of coffee and Starbucks – or PepsiCo could be interested in some of the chickpea farmers that we work with in rural areas, and maybe that could service some of the healthy and more nutritious snacks that they’re making.”
“Feed the Future has brought down poverty and malnutrition 25 per cent in the areas that it’s working for,” said Power.
Scott Nathan, Chief Executive Officer of the US International Development Finance Corporation (DFC), said that the DFC supports financial institutions throughout Africa and the world and lending to smallholder farmers who are thinking about not just helping with fertilizer, fuel (and) seeds in the ground, but also logistics. “Wastage is one of the hidden taxes on this issue that causes food insecurity,” he said. “So the extent that we can work on cold chain logistics, storage, we’re doing that in India, we’re doing that all over Africa.”
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Nathan noted that the DFC has provided Sh2.9 billion in funding to the One Acre Fund, a social enterprise focused on lending to smallholders. Capital allocated to such initiatives, he said, can generate “a huge amount of leverage for the private sector”.
“We’re helping smallholder farmers in the world’s most vulnerable communities access equipment, training and inputs so they can produce more food, while also strengthening their ability to store and distribute it,” he concluded. “Our goals must be ambitious as we work with the private sector to bring more produce to market and bolster food security.”