TAAT, which has a goal of aiding agricultural productivity through a scale-up of proven technologies, is a priority of the bank’s agricultural transformation agenda also called Feed Africa Strategy.
What are some of the bottlenecks to economic growth through agriculture in Africa?
Major bottlenecks hindering Africa’s economic growth through agriculture include low productivity, challenges to finding sustainable ways to scale up successful food production technologies to farmers and insufficient access to markets.
“Agricultural finance, in all its forms, is in short supply in Africa.”
For decades, there have been many attempts and commitments to transform African agriculture that has not come to full fruition partly due to a lack of funding by national governments, and the high cost of getting inputs to farmers and produce to the market.
Agricultural finance, in all its forms, is in short supply in Africa. Smallholder producers, small and medium size agricultural enterprises and early-stage firms suffer the greatest barriers to having access to funding for agriculture.
How can the financial sector accelerate Africa’s agricultural growth?
Neither commercial banks nor the emerging microfinance industry is willing or able to sufficiently meet the financial needs along agricultural value chains. This leaves many commercial smallholders and agricultural small and medium enterprises underserved.
On average, less than three percent of total commercial bank lending goes into Africa’s agricultural sector. Agriculture suffers from a perception of being high risk and with a modest return.
The African Development Bank takes a multipronged approach to solve this problem. We are working to establish a risk-sharing model that provides incentives to financial institutions to increase lending to the agricultural sector.
The African Development Bank’s Feed Africa Strategy foster coordination across key actors in the agriculture sector, for instance, though our partnership efforts in TAAT and the Leadership4Agriculture Forum that brings together agriculture policymakers, ministers of finance and agribusiness leaders to interact and assess policy reforms.
In Africa, the youth seems not interested in agriculture? How can this be reversed?
More than 60 percent of Africans are below 35, and more than half live in rural areas. Thus, it is critical for the agricultural sector to be seen as exciting employment and business opportunity for young people. Young people can be the engine of Africa’s economic transformation through agribusiness if their talents and energy are harnessed.
One of the African Development Bank’s initiatives to help youth embrace this mindset is called Empowering Novel Agri-Business-Led Employment Programme or “Enable Youth” in short that provides training, agribusiness development, exposure to new agricultural technologies and access to finance.
In areas where novel scientific innovations do exist, how can they be made accessible to smallholders, most of whom may be illiterate?
The mere existence of novel scientific innovations will do little to improve the welfare of vulnerable smallholders if these innovations are not made available to wider audiences.
Furthermore, scientific innovations must be deployed in a manner inclusive of farmers lacking strong reading or writing skills. This requires careful handling and planning to make innovations accessible.
Engaging with a small number of literate farmers who in turn can share that knowledge in local languages to an illiterate majority is key to inclusive agricultural transformation success.
Women constitute a larger proportion of smallholders in Africa but some studies indicate that many innovations are not user-friendly to them. Your thoughts on this?
Gender analysis has historically not been seen as integral to the core business of agricultural research, so for the most part, researchers have not yet developed a robust understanding of how women and men use technologies differently in agricultural value chains.
“An enabling policy environment is needed to facilitate massive uptake of agricultural technologies for increased productivity to make agriculture a viable business.”
An agricultural value chain starts well before the farm; it begins at the research stage, with scientists making decisions that have critical bearings on what happens across the entire value chain. It is crucial that agricultural research and subsequent innovations recognize and respond to the different priorities and needs of both men and women.
By focusing on innovations that address the constraints and priorities of African farmers at the margins, especially women, gender-responsive agricultural research offers the potential to maximize the efficiency and efficacy of African agricultural R&D and to help deliver inclusive, agriculture-driven economic growth for the continent.
What advice for transforming African agriculture do you have for policymakers?
An enabling policy environment is needed to facilitate massive uptake of agricultural technologies for increased productivity to make agriculture a viable business.
African policymakers should liberalize national seed systems and harmonize registration of inputs such as seeds and fertilizers registration across regions to enhance transfer of technologies without borders.
In addition, long-term, low-interest loans for buying agricultural machinery, inputs and land development should be provided to create a competitive agricultural sector. We need to remove inappropriate trade policies such as export bans to provide farmers a fair price for their produce.
Other policies such as secure land titles are also required to facilitate investment in land development. Strong nutrition policies, especially school feeding for children and a diversified bread basket, provides not only a market for farmers but a healthy and productive population.
It is critical to embrace agriculture as a business that entails building increased market access, supporting more fair trade practices and leveraging commercial credit for farmers and other actors along agricultural value chains.