…With 65% of the world’s arable land, Africa is currently punching far below its weight in food production, says Kenyan President William Samoei Ruto.
…To address Africa’s food security in the long term, the focus must shift from crisis response to investment in resilient, durable systems, says US Secretary of the Treasury Janet Yellen.
…Finding ways to facilitate lending to smallholders, who comprise the vast majority of African farmers, is key to unlocking potential and breaking the cycle of subsistence farming, says US Agency for International Development (USAID) Administrator Samantha Power.
TUE, SEPT 19 2023-theGBJournal |In a special session Monday at the World Economic Forum’s Sustainable Development Impact Meetings 2023, Kenyan President William Samoei Ruto, US Secretary of the Treasury Janet Yellen and other leaders called for strengthening value chains in Africa as key to transforming food systems and improving food security for the continent.
Ruto offered a grim assessment of the current situation on the continent: As of the end of 2022, approximately 31.8 million people in East Africa were in dire need of emergency food assistance, including 6.1 million children under the age of five. Agricultural production in Africa is currently the lowest in the world, with severe implications on nutrition and food security.
“The numerous cases of hunger constitute a humanitarian crisis, highlighting the underutilization of our continent’s immense potential for high productivity and surplus food production,” Ruto said. “In fact, it is a paradox: The account of Africa’s starvation amid plenty is parallel to the account of Africa’s poverty amid resource abundance and underdevelopment in the middle of huge potential.”
Africa’s already vulnerable food systems are straining under the combined weight of climate change, the COVID-19 pandemic and grain shortages brought on by the Ukraine War. Yet worsening food insecurity is not necessarily in Africa’s future as governments forge innovative partnerships with the private sector to deliver the type of financing that Africa’s food producers desperately need.
“The impacts of food insecurity on individuals and communities are acute,” said Yellen. “Hunger and poor nutrition undermine health and educational outcomes and well-being. Food insecurity also has economy-wide impacts, contributing to lower productivity that holds back economic growth. This means food security matters both morally, and for the global economy.”
Yellen noted how food security is inextricably linked to broader global challenges, which must be addressed in parallel. “Pandemics lower income. Conflict disrupts supply chains. Climate change poses risks to entire agricultural systems. So, combatting food insecurity also depends on broader efforts to address these global challenges and this requires evolving the multilateral development banks, which are a central pillar of our international economic system.”
Ruto, who addressed the nexus between climate change, agricultural productivity and food security at the Africa Climate Summit earlier this month, pointed to positive examples of innovative private sector-led initiatives to help Africa better realize its agricultural potential. He singled out Sanergy, a Kenyan company that converts organic waste into fuel, fertilizer and animal feed and has expanded its footprint in Kenya, creating hundreds of jobs; Nairobi-based SunCulture, which uses solar energy for radiation and has made its technology accessible to over 10,000 farmers through an innovative “pay-as-you-go” model; and Del Monte, which has recently invested $5.5 million in a new fresh fruit packing facility that sources from 2,000 Kenyan farmers.
Samantha Power, US Agency for International Development (USAID) Administrator, noted that the small and medium enterprises that comprise so much of Africa’s agricultural sector find themselves too big for microfinance and too small for bank loans. She stressed the potential to transform subsistence farmers into entrepreneurs – a change that has the potential to lead to improved livelihoods and educational opportunities for children, thus breaking the cycle of subsistence farming for the next generation.
Initiatives like USAID’s Feed the Future aim to help with this transformation by connecting small-scale farmers with global agribusinesses – “matchmaking,” as Power described by way of example, “between Rwandan growers of coffee and Starbucks – or PepsiCo could be interested in some of the chickpea farmers that we work with in rural areas, and maybe that could service some of the healthy and more nutritious snacks that they’re making.”
“Feed the Future has brought down poverty and malnutrition 25% in the areas that it’s working for,” said Power.
For Anne Beathe Tvinnereim, Minister of International Development of Norway, small-scale farmers and the food value chain hold the key to greater food sovereignty for African countries. “Too often, these businesses are considered too poor and too risky for investors, and the local market is held back not because of lack of capacity, but lack of capital,” she explained. “We want to reduce that risk. We want small-scale farmers to have increased access to inputs and markets. We want processors to be able to purchase new equipment, and distributors to reach the last mile. By de-risking private investments in the agro value chain, I believe African countries will be less dependent on expensive imports.”
Akinwumi Ayodeji Adesina, President of the African Development Bank (AfDB), noted how in response to the closing of the Black Sea ports during the Ukraine War his bank responded not by seeking foreign assistance, but by investing in African farmers. “We very quickly launched a $1.5 billion initiative to make sure that Africa can feed itself,” he said. “It’s not about begging for food, it’s about getting seeds in the ground in your bowl and actually growing your own food.”
“And it’s working extremely well,” he added. “Today, we are supporting 24 million farmers to produce 38 million metric tons of food valued at $12 billion. That is 8 million metric tons of food more than what Africa will lose from importing from either Russia or Ukraine. It’s all about Africa having the pride and the dignity of producing the food itself.”
Scott Nathan, Chief Executive Officer of the US International Development Finance Corporation (DFC), said that the DFC supports financial institutions throughout African and the world and lending to smallholder farmers who are thinking about not just helping with fertilizer, fuel (and) seeds in the ground, but also logistics. “Wastage is one of the hidden taxes on this issue that causes food insecurity,” he said. “So the extent that we can work on cold chain logistics, storage, we’re doing that in India, we’re doing that all over Africa.”
Nathan noted that the DFC has provided $20 million in funding to the One Acre Fund, a social enterprise focused on lending to smallholders. Capital allocated to such initiatives, he said, can generate “a huge amount of leverage for the private sector”.
“We’re helping smallholder farmers in the world’s most vulnerable communities access equipment, training and inputs so they can produce more food, while also strengthening their ability to store and distribute it,” he concluded. “Our goals must be ambitious as we work with the private sector to bring more produce to market and bolster food security.”
Twitter-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com| govandbusinessj@gmail.com
