Governments are keen to attract private investors after public expenses on agriculture nearly halve, despite a 250% increase in international development assistance.
A group that includes the finance ministers and central bankers of all African countries among its members has pledged to re-capitalize the continent’s agriculture industry by creating the conditions for an increase in private investment.
At a meeting held earlier this month in Gaborone, Botswana, that was also attended by executives from the World Bank Group and the International Monetary Fund, the leaders admitted that “the current approach to move from subsistence to commercial agriculture” had proved “inadequate” – a setback they attributed in no small part to Africa being “the most undercapitalized region.”
Noting that public investments in the sector has for years been in decline, the group emphasised the private funding and financing it hoped to unlock through policy frameworks focused on “de-risking investments” in agri-based manufacturing.
It called for the World Bank and the IMF to support this shift by improving their capacity to negotiate “win-win” public-private partnerships and by using “innovative” financial instruments to support rural transformation through agriculture.
Of particular importance in their declaration was the need to boost agri-related infrastructure, notably information and telecoms, to facilitate access to finance, land and markets at an affordable cost to smallholders.
The World Bank has consistently underlined Africa’s shortcomings in embarking on the green revolution that has lifted the fortunes of other regions such as East Asia and the Pacific – partly explained by unfavourable ecological factors and a flawed cookie-cutter approach to the problem by international advisors.
But it also underlined the role played by distorting fiscal policies and a steady decline in public spending on the sector. Although official development assistance has increased by about 250 percent between the 1980s and the 2010s, agriculture allocations have nearly halved over the period, according to the bank.