Africa’s agricultural revolution: From self-sufficiency to global food powerhouse | White & Case LLP

Africa’s Agricultural Renaissance: Unlocking the Potential for Sustainable Development

Introduction

Africa has 60 percent of the world’s uncultivated arable land and the agriculture sector accounts for 35 percent of Africa’s GDP. However, Africa still spends a staggering US$78 billion on food imports each year, and more than 20 percent of Africans face hunger. To address these challenges and achieve sustainable development, Africa must prioritize its agricultural sector and align its efforts with the United Nations’ Sustainable Development Goals (SDGs) and the African Union’s “Agenda 2063: The Africa We Want.”

The Potential for Growth

The African Development Bank predicts that Africa’s food and agriculture market could increase from US$280 billion in 2023 to US$1 trillion by 2030. This growth potential can be realized through six key levers:

1. Shifting legislation and policies to support a wider range of agricultural projects
2. Improving access to capital for the private sector
3. Addressing the infrastructure gap
4. Resolving supply chain issues
5. Improving productivity of small-scale farmers
6. Adapting to climate change

Shifting Legislation and Policies

African countries need to shift their development policies from supporting a few export-focused crops to prioritizing a wider range of agricultural products for domestic consumption. This will promote pan-African food security and increase intra-African trade. The African Continental Free Trade Area (AfCFTA) will play a crucial role in enhancing the flow of agricultural products across African borders. Additionally, processing exported goods locally will increase revenues and create job opportunities.

Improving Access to Capital

Access to credit is a major impediment to private sector investment in African agriculture. The current financing shortfall ranges between US$27 billion and US$65 billion annually. Impact investors can play a significant role in bridging this gap and supporting developers to bring about design improvements that traditional financial institutions cannot. Long-term strategies proposed by the Commercial Agriculture for Smallholders and Agribusiness (CASA) program include growing small agribusinesses, enhancing blended finance instruments, and building climate finance infrastructure.

Addressing the Infrastructure Gap

Poor infrastructure, including roads, railways, and harbors, hinders farmers from getting their goods to market and adds significant costs to trade among African countries. Investment in infrastructure projects needs to be increased, and the involvement of credible development finance institutions can enhance the probability of project success. Risk mitigation instruments can also improve the credit rating of borrowers and reduce the cost of finance.

Resolving Supply Chain Issues

Inefficient supply chains and rent-seeking practices increase the costs of doing business in African agriculture. Regulatory reform and institutional enhancement can help reduce these challenges. Large-scale farming enterprises are resorting to vertical integration of supply chain components to overcome these obstacles. Collaboration with supermarket chains is also improving downstream supply chain efficiencies.

Improving Productivity of Small-Scale Farmers

Small-scale farmers play a crucial role in African agriculture but face significant pressures. They need better access to irrigation, technology, and support in storing and transporting their produce to market. Centralized entities can be better positioned to attract funding and deliver results. Support for small-scale farmers should be integrated into the overall agricultural development strategy.

Adapting to Climate Change

Climate change poses a significant threat to African food security. Adapting Africa’s food systems to climate change is imperative. Research and planning are needed to assess how Africa’s food security can be achieved amid diminished agricultural potential and water scarcity. More ambitious adaptation interventions are required to avoid widespread famine and forced migration in the coming decades.

Conclusion

Africa has the potential to feed itself and become a global agricultural powerhouse. This requires a comprehensive overhaul of supply chains, infrastructure improvements, and increased productivity. Governments need to create a supportive regulatory environment, and private sector investment is crucial. By aligning efforts with the SDGs and Agenda 2063, Africa can achieve sustainable development and contribute significantly to global food security.

SDGs, Targets, and Indicators

1. SDG 2: Zero Hunger

   • Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round.
   • Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment.
   • Indicator 2.1.2: Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES).
   • Indicator 2.3.1: Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
   • Indicator 8.3.1: Proportion of informal employment in non-agriculture employment, by sex.

3. SDG 9: Industry, Innovation and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
   • Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.

4. SDG 13: Climate Action

   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
   • Indicator 13.1.2: Number of countries that have communicated the strengthening of institutional, systemic and individual capacity-building to implement adaptation, mitigation and technology transfer, and development actions.

Table: SDGs, Targets, and Indicators

Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The issues highlighted in the article are connected to the following SDGs:

   • SDG 2: Zero Hunger
   • SDG 8: Decent Work and Economic Growth
   • SDG 9: Industry, Innovation and Infrastructure
   • SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

   Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

   Source: whitecase.com

    

   

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