Strengthening the agri-food sector in Africa is key to preventing food shortages in Africa, as highlighted by the pan-African AgriBusiness Forum held in Johannesburg, South Africa, from 16 to 19 October 2011.

The recent food crisis affecting more than 10 million people in East Africa has revealed the urgent need to address not only the consequences of drought and food shortages, but also their root causes. Africa’s agriculture, and the development and growth of the private sector in this context, can make a major contribution to preventing emergency situations from occurring. The AgriBusiness Forum is shining a spotlight on ways forward to maximise this contribution.

A crucial element is close collaboration between all the main players involved in agriculture in Africa, primarily between the public and the private sector.

Caterina Giuliano
EMRC

“Agriculture development has not always been seen as a source of business and economic growth,” says Caterina Giuliano, Senior Programme Manager at EMRC, the non-profit organisation arranging the forum. “It has now become apparent that seeing the agricultural sector in Africa solely as a sector in need of development funds is not a sustainable solution. A crucial element is close collaboration between all the main players involved in agriculture in Africa, primarily between the public and the private sector.”

Explaining that small farmers account for more than 90 percent of Africa's agricultural production, she stresses that the success of Africa depends on the success of its own private sector: “The African agribusiness sector has an enormous potential for growth.”

Triggering investment in rural areas

Agribusiness risk is caused by vagaries of climate, poor and unreliable infrastructure, distance to market, fluctuating input and output prices, inconsistent government legal, regulatory regimes, land issues, local community issues.

Hugh Scott
AECF

Rural areas receive special attention. “Doing business in Africa is generally considered more risky than in many other places and doing business in rural areas even more risky,” says Hugh Scott, director of the Africa Enterprise Challenge Fund (AECF), a partner of the forum. “Agribusiness risk is caused by vagaries of climate, poor and unreliable infrastructure, distance to market, fluctuating input and output prices, inconsistent government legal, regulatory regimes, land issues, local community issues, etc.” The AECF encourages private sector companies to compete for investment support for innovative business ideas by making funds available through competitions. Over one million rural poor people benefited from investments made by the AECF last year.

In order to accommodate other growth strategies that are relevant and inclusive, but investment and recapitalisation of equipment and assets are required in order to accomplish this.

Richard Morgan Tsvangirai
Prime Minister of Zimbabwe

Prime Minister of Zimbabwe Richard Morgan Tsvangirai points out how important this kind of initiative is for his country: “The country’s economy was based on an import substitution strategy due to sanctions under the Smith regime. This has to change in order to accommodate other growth strategies that are relevant and inclusive, but investment and recapitalisation of equipment and assets are required in order to accomplish this.” Projects funded in Zimbabwe include the creation of a network of rural resource centres, a project increasing the quality and quantity of rural cattle herds, and the creation of a sustainable commercial operation that will supply rural stores with agricultural inputs and other supplies at competitive retail prices.

Addressing constraints

There is a need to establish and strengthen institutional mechanisms for collaboration, with some degree of shared understanding and vision for the future.

Doyle Baker
FAO

As Doyle Baker from the United Nation’s Food and Agriculture Organization (FAO) explains, there are different factors at play preventing the private sector from reaching its full potential.
“For sustainability of public-private collaboration, there is a need to establish and strengthen institutional mechanisms for collaboration. Dialogue and cooperation are difficult when there are not people on both sides with some degree of shared understanding and vision for the future,” he explains. “There are at least two other key constraints that must be addressed. One is the combination of circumstances that drive up the cost and risk of doing business in Africa, ranging from poor infrastructure – leading to high utility and transport costs – to policies such as export bans. The second is the need to build up competitive medium-scale enterprises [which] can produce the high-quality products and services needed to stem food import dependence while ‘deepening’ the market to give producers and retailers options to counteract the disparate market power of large politically-favoured companies.”

EU long-term commitment

Private sector involvement is of course just one aspect of the issue. To act as an efficient partner for Africa in this field, the EU is carrying out a broad range of activities targeting the availability of, the access to and the nutritional adequacy of food as well as crisis prevention and management. Helping to achieve agriculture-led development across the continent, the Comprehensive Africa Agriculture Development Programme (CAADP) is at the heart of efforts to boost agricultural productivity. Increased food supply to combat hunger is among its main objectives. The programme receives support from different EU financing instruments, with most of the national-level support coming from the European Development Fund.

In addition to its support for the CAADP, the EU furthers food security through country programmes. Food security and nutrition are addressed through the Food Facility, which provides €1 billion of funding to be spent over three years (2009-11), the Food Security Thematic Programme, and the Support to Farmers’ Organisations in Africa Programme.

Food security remains a top priority in the framework of the Africa-EU partnership to meet the targets of the Millennium Development Goals (MDGs). The partners aim to achieve substantial progress towards the goal of halving the proportion of people who suffer from hunger and malnutrition by 2015 in all African countries.