Agnes Kalibata, First published in the Financial Times guest column *beyondbrics, 6/12/17
Agriculture captures the African story like no other economic activity — both the ties and traditions of the past, and the promise of a bright future. Etched in our history, farming tugs us back to the land in our villages while offering the promise of a modern, vibrant and prosperous future. Its value goes beyond providing our basic human need for food. It grows our economies and, more importantly, it changes society. I am not only convinced about this: I know it to be true, having spent my entire life in agriculture.
As a young girl, I grew up with my siblings on a small farm tilled by my parents. Their hard work afforded us, like many sons and daughters of African farmers, an education that gave us a shot at a decent life. I have since been privileged to hold different leadership positions in agriculture, shaping decisions and driving action. I have witnessed the changes in places where investment has happened and am convinced that success can stretch across the African continent if we are strategic and committed.
Why does agriculture hold such promise? It’s all in the numbers. For starters, the sheer number of Africans — 70 per cent of the population — who depend directly on agriculture for their livelihood, means that we should and must give the sector more attention. If we invest in these farmers, mostly smallholders, by giving them access to appropriately adapted seeds and fertiliser, and by ensuring availability of information on proper farming practices, yields will double and even triple in many instances. Going a step further to link these farmers to functional national and regional markets will, at the bare minimum, double their incomes. What does this look like in reality? Let’s take Uganda as an example. With a population of 40m, doubling incomes would raise per capita income to about $1,200 from the current $600. This would not only bring Uganda closer to its aspiration of becoming a middle-income nation by 2020, it would also improve the lives of millions of farmers significantly, while enlivening rural economies and securing them access to otherwise hard to reach services such as good quality education, health services and off-farm jobs. The good thing is that we are starting to see evidence of this, in real time, in countries where investment has been made in agriculture.
According to the International Food Policy Research Institute, in countries such as Burkina Faso, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Rwanda and others that are making big investments in agriculture, productivity on existing farmlands has risen by up to 6 per cent a year, spurring an average annual GDP increase of more than 4 per cent. However, for agricultural transformation to really shift the continent’s economic needle and deliver prosperity for all, many more countries need to join in. The urgency for Africa and its people is that we lack the luxury of time.
Recent news of the drowning of more than 20 young girls in the Mediterranean, like many before them, broke my heart — young lives with endless potential snuffed out. And they are gone because they had lost hope in this continent to deliver their aspirations for a decent future. Sadly, they join grim and growing statistics of young Africans who have perished making the perilous journey to Europe. If we sit and do nothing, young Africans will continue making this journey to look for jobs — jobs that we have, ironically, largely exported through our inordinate food imports, which cost the continent a staggering $40bn annually. Inaction will see this cost almost triple to an estimated $110bn by 2025. Fortunately, these trends can be reversed — and they should be. Indulge me here, in my back-of-the envelope calculation, which indicates that if that same $40bn a year was invested to produce food within Africa, we would create employment for more than 11m young people each year, paying them wages equivalent to what they would get in Europe. This would transform the lives of almost all the 10m-12m young people entering the job market in Africa every year — 70 per cent of whom cannot find employment. Our choices are, therefore, clear cut: continue as a net food importer, and face peril; or seize the business opportunities presented by the continent’s food market — valued at $300bn, and projected to rise to $1tn by 2030 — to build wealth and prosperity through agriculture. For me, there is only one logical choice: taking charge of our destiny. To do this, we must improve systems, infrastructure, policies and institutions that support agriculture. There are no excuses for not doing so.
Multiple lessons abound from regions that have launched their economic success on the back of a strong foundation in agriculture. The most recent examples are from Southeast Asia, where governments that consistently invested 15 to 20 per cent of their national budgets in agriculture for 10 to 15 years ushered in a period of rapid economic growth that quickly diversified to industries and services. At this level of investment, it is possible to unlock private sector potential in ways that would sustain the agriculture sector with minimal public intervention. I am encouraged by the many positive signs of progress that we are seeing across the continent. The private sector is stepping up to the plate in a big way. As an example, the partnership between DSM, the government of Rwanda and a number of other partners including the UN World Food Programme and CHI comes to mind. This joint venture saw the setting up of a $60m, baby food factory in Kigali. Besides improving access to nutritious food for babies and mothers, the company has directly created jobs for hundreds of Rwandans and offered a market for close to 9,000 local farmers, giving them a stable and sustainable income. DSM is also in very good business; in fact, they cannot satisfy the regional demand right now. This success can be attributed directly to strong leadership in the public and private sectors. I could cite similar examples in other countries including Ethiopia where, due to committed investment in agriculture, poverty is reducing at a rate of 5 per cent a year. For avoidance of any doubt, I am not trying to downplay the complexity of issues that underpin a successful agriculture sector. The emphasis is on possibilities and, more importantly, on the need for determined, visionary and unwavering leadership that is critical to making agriculture work. There will be no shortcuts out of the poverty that grips a majority of our people. Whatever choices we make, a population with some spending power is critical for the success of Africa’s economies — and, right now, for the majority of our people, a thriving agricultural sector would provide that opportunity.
Emerging markets guest forum *beyondbrics is a forum on emerging markets for contributors from the worlds of business, finance, politics, academia and the third sector. All views expressed are those of the author(s) and should not be taken as reflecting the views of the Financial Times.
Edited by Amy Smith (NIAS)