Part 2

The debate on the needs and sources of resources for financing the transformation of agriculture in Africa is, at times, quite puzzling. The AU/NEPAD has just completed a planning exercise aimed at preparing sub-regional/regional Priority Action Plans and agreeing on early actions and institutional arrangements for the implementation of the key CAADP pillars concerning: land and water resources development; rural infrastructure and trade capacities for market access; food supply chains and responses to emergency food crises; and agricultural research, technology dissemination and adoption.

Now comes the time for the acid test of implementation and mobilization of resources required to do so. And the usual propensity to call first on the donor/lending community to help takes over. To say the least, this trend of affairs does not match well with the NEPAD guiding principle of doing the African development business differently, by proceeding first from Africa's own resources and resourcefulness. In this regard, the investment/financing puzzle goes like this. Early estimates from NEPAD indicate that it would take an average of US$ 17 billion of annual investment to adequately implement the CAADP. Against this figure, Africa's annual food and agricultural product import bill amounts to US$ 10-20 billion. Obviously, the arithmetic of these figures would strongly suggest that what is missing is not so much available domestic resources to finance agricultural transformation; it is rather the appropriate policies and strategies to mobilize those resources for investment in Africa's agricultural systems.  

Realizing the full promise of agricultural transformation requires a broader regional approach to diversification and specialization in agriculture. There is need to exploit the special diversity in resource endowments on the basis of the principles of "Comparative" and "Competitive" advantage at the global level of the continent. Regional economic integration and cooperation should be guided primarily by efficiency and comparative advantage rules. This could be facilitated by using agro-ecological zoning as a framework for identifying agricultural production potential and planning infrastructure development across zones and beyond national boundaries. 

A pragmatic way to achieve significant economies of scale and vertical coordination African agriculture would be to work at the regional level around a limited number of strategic food and agricultural commodity chains. The strategic qualification of such commodities would relate not only to their relative importance in the African food basket and internal economies, but also to their worth in the interface (trade relations) between African economies and the global economy. Of strategic importance would be such commodities: which carry an important weight in the African food basket; hold an important weight in the trade balance of the continent through their contribution to the overall regional export earnings or import bills; and for which the region has considerable unexploited production and processing/value-added potential, owing mainly to internal constraints as well as external impediments such as agricultural subsidies and support measures of trading partner countries outside of the continent. 

Commodities such as rice, maize, wheat, sugar, meat and dairy products, cotton, coffee, cocoa, etc. would meet these criteria of unexploited production potential to respond to increasing regional demand. For such selected strategic commodities, a common African market that transcends national and sub-regional borders would offer an appropriate economic space to allow for private investments at the level of regional economies of scale that would ensure profitability. Hence, for those strategic food/agricultural commodity chains, market integration needs to be moved beyond the national and sub-regional levels to encompass the global regional market - a common and single African market. 

Developing vertically coordinated regional chains (of production, processing and marketing) would further require building public private partnerships to create an environment that is conducive to ensuring both profitability and security of regional private investment. The creation of such an environment could proceed from the opening of Free Sub-Regional/Regional Investment Zones in those areas where the greatest unexploited production potential for selected strategic agricultural commodities lies, so as to stimulate the mobilization of pooled private investment into agriculture at a regional scale. Major river basin-wide initiatives such as those of the Niger and Nile rivers could lend themselves to a strategy of free regional investment zones for the development of vertically-coordinated chains of production, processing and marketing of strategic food and agricultural commodities/products.  

An important requirement for increasing the productivity and competitiveness of African agriculture is to significantly reduce unit costs of production, processing and distribution by increasing productivity at all stages. Technological developments in the biological sciences, energy, information and communications could  address this challenge. Africa is offered great opportunities to harness both conventional green revolution as well as emerging gene revolution technologies. Public investments in research and technology generation and diffusion is needed to encourage broad-based adoption of available technologies and to strengthen indigenous capacities to develop and/or adapt and diffuse the kinds of technologies needed to compete effectively in domestic, regional and global markets. This will require strengthening African research capabilities.

In the face of small national budgets, the establishment and/or strengthening of sub-regional/regional Centers of Excellence of agricultural research would help build critical research personnel and financial resource mass and achieve economies of scale.

These Centers of Excellence could be created along the lines of agro-ecological zones and strategic agricultural commodities mentioned earlier to give special attention not only to farm-level technologies, but also to adaptive research on post-harvest stage technologies (storage, processing, transport) and appropriate biotechnologies for food as well as cash crops. Furthermore, to capitalize the available scientific and technological skills there is need to:

• Promote networking among the proposed Centers of Excellence, especially through cross-border staff exchange and training programs, and schemes to attract and utilize scientists/researchers of the African Diaspora;
• Establish appropriate mechanisms (e.g., Trust Funds, public-private partnerships) to ensure sustainable financing of agricultural research through sub-regional organizations such as ASARECA, CORAF/WECARD and SACCAR and their regional apex, the Forum for Agricultural Research in Africa (FARA);
• Intensify the use of Information and Communication Technologies in agricultural research and extension; and
• Support innovations in agricultural extension systems to ensure greater public-private partnerships, participation of community-based organizations and NGOs, and effective access for smallholder and women-farmers to extension services.

Although the private sector in most African countries has yet to play a significant role in agricultural research, there are excellent prospects for public-private partnerships in innovations for agricultural transformation in Africa. For instance, the private sector could focus on crop and livestock breeding and the assimilation and adaptation of new technological advances in molecular biology. The public sector would continue to focus on ways to improve farming systems, farming practices, and environmental sustainability, which represent areas where information is more of a public-good nature. The area of post-harvest operations (i.e., storage, transport and processing) could also offer good economic opportunities for public-private sector research partnerships.

Success in innovations to transform agriculture for improved livelihoods and development in Africa relates to getting the TIIP (an acronym of my own) right: T (Technologies), I (Infrastructure), I (Institutions) and P (Policies). On the policy front, agricultural development/transformation should feature high on the agenda of the Poverty Reduction Strategies of African countries. Unlike in past business, the aim here should be the promotion and support of community-based and private-sector-led development. On the institutional front, we need to promote and support the empowerment of decentralized rural community-based organizations, private-sector business communities, and formal systems of agricultural education and research for technology generation/adaptation/diffusion at the national, sub-regional and regional levels. We also need to strengthen international solidarity in pro-poor technology development, sharing and transfer for the benefit of the direct stakeholders of agricultural transformation for improved livelihoods and development in Africa. None of these actions will yield tangible long-term impact on agricultural transformation and poverty reduction if we fail to innovate in addressing the central issue of the very survival and preservation of the human capital of the continent's agriculture, particularly the rural poor and most segments of the population.