The Promota Magazine
From Food Security to Wealth Creation: Why African Agriculture Matters
Mo Ibrahim Foundation recently convened a group of African and world leaders on this same soil – in what is today the city of Tunis – to discuss African agriculture and its potential to unlock new wealth. Making African agriculture more productive, resilient and accessible is about much more than simply alleviating hunger and safeguarding the continent's most vulnerable people; it is the continent's most effective high-growth investment strategy. The World Bank states that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture.
The potential for growth in this sector is extensive. Africa has the world's largest share of arable land and African average yields per hectare are a quarter of those seen in East Asia, for example.
There could not be a more important time to invest in African agriculture. By 2040, one in five of the world's young people will live in Africa and they will form part of the world's largest working age population. 16 of the 20 fastest growing cities in the world will be in Africa by 2025.
And new technologies provide an unprecedented opportunity to maximise the impact of these investments. Mobile phones and improved seeds, among other advances, have already begun to help African farmers access information more effectively, and adapt to emerging threats such as climate change.
African entrepreneurs are seizing these opportunities. The 2011 Ibrahim Forum on African agriculture heard from a number of prominent speakers. Two women, in particular, have demonstrated remarkable success. Eleni Gabre-Madhin is a pioneering agricultural economist and businesswoman who created the Ethiopia Commodity Exchange. The Exchange is considered a huge success, increasing trade by 128% this year. Another speaker Josephine Okot, founder and CEO of Victoria Seeds in Uganda, has established an innovative seed business which sells over 90 seed varieties and employs over 1,000 farmers. Her seeds include high-quality maize that can boost yields from one or two tonnes per hectare to seven tonnes per hectare.
Gabre-Madhin and Okot's successes have not come easily. The obstacles they have faced reflect some of the key challenges facing African agriculture today.
Trade restrictions, lack of access to finance and weak governance and infrastructure can all prevent businesses from establishing and achieving their full potential. For example, the bank interest rate in Uganda of 29% makes financing for new enterprises inaccessible. Okot was only able to launch her business in 2004 with the help of a loan guarantee from USAID.
The private sector and governments have a key role to play in providing start-up financing, loan guarantees, and a regulatory framework supportive of small businesses. Furthermore, the consensus at the forum was that political leadership and good governance are central to spurring African agricultural growth.
The visionary leadership of Pedro Pires, former president of Cape Verde and winner of this year's Ibrahim Prize for Achievement in African Leadership, is a case in point. President Pires embraced the importance of investing in agriculture for overall economic progress. This approach contributed to Cape Verde becoming only the second African country to graduate from the United Nations Least Developed category. This is a remarkable achievement for a country that experienced drought as recently as 1968.
There is already much momentum across the continent. African countries are creating and implementing domestic plans and programmes for agricultural development with varying degrees of success. Ghana has already met the Millennium Development Goal of halving hunger by 2015. 27 countries have agreed domestic plans for agriculture, 17 countries have achieved 6% growth in the sector and seven countries have committed 10% of their budgets to agriculture.
African leadership can and is already changing the landscape, working to take on the urgent task of becoming a net exporter and a breadbasket for the world. The African and other global leaders gathered in Tunis believe that these goals are achievable. The timing is urgent and the benefits of action will be enormous for the continent.
Without strong leadership, it is as if we are throwing salt on the soil of African farmers. Failing to act would be a missed opportunity to transform a continent.