Feed Africa Feed Africa The Road to Agricultural The Road to Agricultural Transformation in Africa Transformation in Africa 24 May 2016 24 May 2016 DR. CHIJI OJUKWU DR. CHIJI OJUKWU Director, Agriculture and Agro-Industries Director, Agriculture and Agro-Industries Department Department African Development Bank African Development Bank
Presentation Outline I. Why do we need Africa-wide Agricultural Transformation? II. AFDB’s Strategic Response III. Implementation Costs and Financing IV. Flagship Initiatives V. Going Forward 2
FEED Africa: Agricultural Transformation in Africa I. Why do we need Africa-wide Agricultural Transformation?
Agriculture remains a major source of income in Africa; however, untapped potential has resulted in persistent poverty and deteriorating food security
Instability in commodity prices is creating an imperative for African countries to diversify sources of foreign exchange earnings There is a need to diversify sources of economic growth; food commodities are one of the least volatile groups Commodity price indices ; 2005=100, 2005-2015 Food 260 Metals Fuel (Energy) 240 220 200 180 160 140 120 100 80 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: IMF Primary Commodity Price System
Urbanization is driving increased demand for food products that are not currently being supplied by African producers Increasing urbanization across Africa Increasing urbanization across Africa Shifting consumption preferences to ‘premium’ rice Shifting consumption preferences to ‘premium’ rice African urbanization rates; millions of people, 2000-2025 Per capita rice consumption by grade – Nigeria Example Kg per capita per year 635 35.0 30.5 532 10.9 +4% (31%) 446 372 21.4 311 Standard (70%) 263 24.1 (69%) 9.1 Premium (30%) 2000 2005 2010 2015 2020 2025 Rural Urban % of pop.: 34% 35% 37% 39% 41% 44% Source: IFPRI, Policy options for accelerated growth and competitiveness of the domestic rice economy in Nigeria; World Bank; CGIAR, Technologies for African Agricultural Transformation; Africa Rice Center, The New Rice for Africa – a Compendium; World Bank Data; Dalberg analysis
Barriers Crippling Africa’s Agriculture Sector Poorly Poorly Limited Insufficient Limited reach Inconsistent Under- developed organized post- coordination of utilization of of extension to capacity for performing market harvest research and inputs and boost on-farm effective value value chains linkages and aggregation development mechanization production addition trade corridors and transport Insufficient transport, energy, water, waste and Undeveloped soft infrastructure including aging Insufficient other hard infrastructure , leading to smallholder farmers and a lack of skills for infrastructure uncompetitive cost structures commercial agriculture and agro-allied industries High service cost due to small Limited market attractiveness Limited access Real and perceived risk limiting deal sizes, lack of credit data, relative to perceived higher to agricultural and low capacity in agricultural returns outside of the private sector investment finance lending agricultural sector Unfavorable market access and Ineffective sector regulation Unsupportive business enabling Adverse agri- incentives limiting trade and creating long lead times for new environment restricting land business capacity to produce high-quality technologies and inconsistent tenure and general ease of doing environment products trade policies business Limited Insufficient inclusivity of women Limited incentives to ensure Limited access and affordability inclusivity, and youth in agricultural sustainability and climate- of commodities with high sustainability development resilient practices nutrition levels and nutrition
FEED Africa: Agricultural Transformation in Africa II. AfDB’s Strategic Response
AfDB’s “High 5 ” Priorities 1 . 1 . Power and Light Up Africa Power and Light Up Africa 2. Feed Africa 2. Feed Africa 3. Industrialize Africa 3. Industrialize Africa 4. Integrate Africa 4. Integrate Africa 5. 5. Improve Quality of Life of Africans Improve Quality of Life of Africans 9
FEED Africa: Co-Convening and Co-Developing for Transformation The Dakar High level Conference on African Agricultural Transformation Agenda HELD in October 2015 ATTENDED by over 600 Ministers of Agriculture and Finance, Central Bank Governors, Development Partners, RECS, Academia and Private Sector RESULTED in 4 Goals and 18 Dakar Action Points adopted to transform African Agriculture within the CAADP framework 10
The imperative for agricultural transformation: Where we are, Goals and Targets Become a net exporter Move to the top of Eliminate hunger and Contribute to the end of agricultural key agricultural value malnutrition of extreme poverty commodities chains 2 3 1 4 Goals 49% of Africans or 420 Staggering food net Low value addition to million live under the food import bill of USD agricultural commodities 33% of African children poverty line of $1.25 35.4 billion per annum and p redominantly Status Today live in chronic hunger; per day (2014); (2015); primary production; 40 million stunted Those living in poverty Net Imports projected Africa’s share in global children under the age of will rise to 550 million to increase to USD production of cocoa beans 5 years as at today by 2025 111.0 billion by 2025 is 73 % vs. 16% share in if we do nothing if we do nothing ground cocoa Eliminate large scale Contribute to alleviating Food security for all Africa share of market imports of commodities poverty though job Target by 2025 Africans that are value for processed that can be produced in creation and providing ‘undernourished’; commodities ~40% Africa, and selectively sustainable livelihoods; (Example for cocoa begin to export Zero hunger and grinding) ~130m lifted out of malnutrition Africa´s net trade balance extreme poverty – $0 billion 11
Feed Africa is anchored on the commitments made under the Comprehensive African Agricultural Development Program (CAADP) Feed Africa CAADP- Malabo Commitments • Recommitment to the principles and values of the CAADP • End extreme poverty by 2025 process • • Eliminate hunger and malnutrition by Recommitment to enhance investment finance in agriculture • 2025 Commitment to ending hunger by 2025 • • Make Africa a net exporter of Commitment to halving poverty, by 2025, through inclusive agricultural commodities by 2025 agricultural growth and transformation • • Move to the top of key agricultural Commitment to boosting intra-African trade in agricultural value chains by 2025 commodities and services • Commitment to enhancing resilience in livelihoods and production systems to climate variability and • Commitment to mutual accountability to actions and results Source: Commitments and Goals by African Heads of States and Government in 2014 Malabo-Equatorial Guinea
Country-level Transformation is already underway across Africa Becoming a major exporting Becoming a major exporting Improving yields through player within 10 years player within 10 years modernized input distribution Kenya Ethiopia Nigeria Exporting horticulture out of Exporting floriculture out of Scale farmer registration and Africa Africa input distribution Total horticulture exports, billion KSH Total floriculture exports, million USD Total farmers registered, million users GESS was introduced 10.3 to farmers in April 97 2012 +11% +41% 550 346 4.2 178 21 13 0.66 2000 2005 2010 2014 2001 2005 2010 2013 2016p 2012 2013 2014 • Strong foreign investor and partner • Ethiopian Horticulture Producers and • Strong political will and government support developing and driving the Exporters (EHPEA) actively managing support to transform the input supply industry the sector system • Contract farming model used to assure • Strong Government support in (1) • Use of public funds to leverage private- consistent supply infrastructure and logistics, (2) access sector investment (i.e. agro-dealers • Political will to support smallholder to land, (3) provision of long-term networks) • Leverage mobile technology to achieve farmer development credit and (4) attracting domestic and foreign investors scale and provide nationwide access
A Focused Approach on Integrated Commodity Value Chains The Bank and its partners will pursue an agenda to transform a selection of key agricultural commodities and agro-ecological zones In particular, Feed Wheat in North Africa Maize, soybean, Africa will take a livestock, and poultry commodity- across the Guinea focused integrated Sorghum, millet, Savannah cowpea, and livestock approach – across the Sahel simultaneously addressing multiple Rice in West Africa bottlenecks across entire prioritized agricultural Tree crops (inc. Cassava in humid and sub-humid zones cocoa, coffee, commodity value cashew, and oil chains and within palm ), horticulture related agro- and fish farming ecological zones across all of Africa Agricultural commodity value chains and agro-ecological zones targeted by the Feed Africa
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