Key Note Address for H.E Tumusiime Rhoda Peace
Commissioner for Rural Economy and Agriculture
African Union Commission
at the International Conference on Revolutionising Finance for Agricultural Value Chains
14-18 July 2014,
Nairobi, Kenya
Prof. Kinandu Muragu, Executive Director, Kenya School of Monetary
Studies
Dr. Evans Kidero, Governor, Nairobi County
Prof. Njuguna Ndung’u, Governor, Central Bank of Kenya
Millison Narh, Chairman of the African Rural and Agricultural
Credit Association (AFRACA) and Deputy Governor, Bank of Ghana
Luca Alinovi, Representative, Food and Agriculture
Organisation of the United Nations (FAO), Kenya
Michael Hailu, Director, The Technical Centre for Agricultural and
Rural Cooperation (CTA) of the African, Caribbean and Pacific (ACP) Group of States
H.E Ambassador Lodewijk Briet, Head of Delegation, European Union
Honourable Felix Koskei, Minister of Agriculture, Livestock and Fisheries,
Kenya
Honourable Akinwumi Ayodeji Adesina, Minister of Agriculture and Rural Development,
Nigeria
Honourable Ministers from other AU Member States
Excellences, Distinguished Delegates, Ladies and Gentlemen,
I. Introduction
It is an honour for me to be part of this landmark dialogue on Revolutionising Finance for Agricultural Value Chains. Let me register the appreciation of the of the African Union Commission. I thank the Government and people of Kenya for graciously hosting this dialogue, for generous hospitality and for the excellent facilities placed at our disposal. Let me also, at this juncture, express gratitude to the Governor of the Central Bank of Kenya for the invitation. I also wish to commend the Bank’s collaboration with the African Rural and Agricultural Credit Association and the Technical Centre for Agricultural and Rural Cooperation in organisng this dialogue. The African Union is proud to partner with you because your initiative complements the efforts we are championing on the continent in the framework of Accelerated African Agricultural Growth and Transformation in line with the Comprehensive Africa Agriculture Development Programme (CAADP).
It is, therefore, my singular honour to deliver this statement on behalf of the African Union Commission.
II. Importance
I need not over-emphasise the importance of agriculture because the high turn up of participants at this international conference is eloquent testimony of the value that leaders, stakeholders and partners accord to agriculture. This commitment and enthusiasm is encouraging and promising that this time African agricultural transformation will materialise just like the green revolution in Latin America and Asia.
Let us, all the same, remind ourselves of a few pertinent facts about the driving role agriculture plays in the economic development and future growth of the African continent. You are aware that the agricultural sector remains the predominant sector in most AU Member States. We cannot tire to talk about this. It accounts for up to 80% of employment, 20% of total exports, and 40% of GDP. It has been established that agriculture, and agriculture related industries in Africa, are the top winners, above all other sectors, for a broad base of African citizens and from the perspective of returns on investment.
So, if the most important resource that Africa has are its own citizens and if for most of our citizens the occupation is agriculture, which other sector would deserve more attention than agriculture and supporting industries if we want to raise the standard of living of our people in pursuit of prosperity which is part of the vision of the African Union that aspires for: “An integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.’’….?
III. Support
Since it goes without saying that agriculture needs, deserves and must have support, it is imperative that we agree on the kind of investment needed for agriculture and effective and efficient mechanisms for delivering this investment for agriculture to produce the results and impacts we desire for the Africa We Want as captured in Africa Agenda 2063:
“A Shared Strategic Framework for Inclusive Growth and Sustainable Development & A Global Strategy to Optimize the Use of Africa’s Resources for the Benefit of all Africans”. Our convening here for the International Conference on Finance for Agriculture acknowledges that agriculture is a business, which begins on the farm and continues through building value-chains that defines the steps toward achieving the Africa where every citizen would like to live and not to migrate from.
The critical support that Africa’s agricultural sector requires is five-fold:
(i) To coordinate from a multi-sectoral approach public sector investment with rural economies at the centre where small holder farmers are empowered to evolve into enterprises that can contribute to and benefit from their sweat. Smallholder farmers have been the bedrock of African agriculture and should, therefore not be taken for granted or marginalised but rather empowered ;
(ii) To attract African financial capital into agriculture and supporting industries to strengthen agriculture value chains while at the same time improving financial sector performance culminating in resilient economies and societies. Governments need to put in place an enabling institutional and policy environment to encourage private sector finance and investment in agriculture;
(iii) To foster African innovation and entrepreneurship to catalyse Africa’s agricultural transformation while reducing risks from climate change and market shocks; to build a resilient citizenry
(iv) To focus across the board on women access to productive resources especially land and finance so that they can move from being farmworkers towards producers and owners of agribusiness;
(v) To harness the energy, quick-learning, and creativity of the youth and channelling them towards agricultural entrepreneurship. Mechanization of farming and value chain development are instrumental in attracting the youth to agriculture. And as you know definitely we shall not attract our youth to farming when we still use a handhoe.
This support needs to be implemented simultaneously, and not piecemeal, if it is to deliver the desired results and impacts in an accelerated manner. This is the only way to capture the moment that Africa has in its history for renaissance in line with the Theme of the just-concluded 50th Anniversary of the OAU/AU: Pan Africanism and African Renaissance.
If you look at resource allocation, how much goes to agriculture? Suppose this amount was increased, imagine what impact it would have on households, communities and nations, their economies and stability. And as you know, food security is really political, it brings crises.
Africa needs to learn from the West; we do not have to reinvent the wheel. Look at the U.S the world's leading economy, its foundation is agriculture. They invested in research, they invested in agribusiness; and in fact in the entire agricultural value chain. Up to now they still subsidise their agriculture; and which developed economy in the world does not subsidise its agriculture? Isn't it time that we put our money where our mouth is, as the saying goes? Why should we say no to subsidies for agriculture when even the developed countries like USA and others do subsidise their agriculture?
We have, in fact, seen that the non-oil economies that are registering fast growth, are those that are investing significantly in agriculture – am not going to mention them but they are there in Africa. They are investing in extension services, agricultural credit, targeted fertilizer subsidies, and so on. This is an example worth emulating.
IV. Opportunities
Fortunately, we are favoured with the following opportunities to tap for agricultural transformation:
(i) The agricultural vision, the Comprehensive Africa Agriculture Development Programme (CAADP) underscores the importance of agriculture and serves as a rallying framework for all AU Member States, Regional Economic Communities and their stakeholders and partners to work together to achieve the Accelerated African Agricultural Growth and Transformation. Over two thirds of AU Member States have signed CAADP Compacts and formulated National Agriculture, Food and Nutrition Investment Plans, ready for implementation, and in some cases already under implementation.
(ii) Africa has 60% of the world’s uncultivated arable land which when responsibly managed will underpin world-class agricultural transformation in Africa;
(iii) Africa has abundant water resources sufficient for irrigated agriculture, fisheries and aquaculture and sanitation for a healthy and productive population;
(iv) Africa’s population heralds huge and dynamic consumer markets given that by 2050, Africa will be home to one-fifth of the world’s population;
(v) Africa has the world’s youngest population that is dynamic and innovative who offer prospects for agricultural transformation and prosperity;
(vi) Africa is urbanising at an unprecedented rate opening opportunities for agribusiness and agroprocessing as part of the agricultural value chain;
(vii) The momentum towards the establishment of the Continental Free Trade Area by 2017 will boost intra-African trade dominated by African agricultural products because that is where Africa has a comparative advantage;
(viii) The operationalization of the Programme for Infrastructure Development in Africa (PIDA) will also boost intra-African trade dominated by African agricultural products. Intra-African trade requires appropriate infrastructure.
(ix) The purchased inputs business in Africa is ripe for investment given the lowest rank that Africa occupies in the world in the use of fertilisers, certified seeds, irrigation equipment and others;
(x) The market for African produced agricultural products will equate to at least USD40 billion which is the price tag for Africa’s current annual food imports. This money we donate it to buy food from outside and we also end up donating our jobs. And with world food production needing to rise by 40% over the next 30 years, Africa could be an important part of the solution.
These opportunities illuminate what is possible when you, the leaders, stakeholders and partners work together in public private partnership in pursuit of transforming Africa’s agriculture and economy.
V. Conclusion
Your Excellences, Honorable Ministers, Ladies and Gentlemen, I trust that, in the spirit of Pan Africanism and African Renaissance, you are all committed and determined to double your efforts to take advantage of the opportunities I have enumerated and more, in order to stem chronic hunger and malnutrition, water borne diseases, dependency on food imports, and food supply uncertainty. When we achieve the Accelerated African Agricultural Growth Targets we will ensure an unshakeable foundation for agriculture and Africa’s national, regional and continental economies in a way that perpetually fosters innovation, public and private investment in agriculture, and is fertile ground for Africa’s youth to realize their dreams and ambitions. This vision was expressed at the 23rd Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in June 2014, in Malabo, Equatorial Guinea. Further, the overwhelming participation here of over 800 persons, from 80 countries as we have heard at this landmark Finance for Agriculture meeting, indicates the tremendous alignment in today’s Africa that agriculture is the priority sector for wealth building and prosperity of Africa’s citizens, today and long into the future.
I look forward to a lively and productive dialogue during this week so that we all return with insights that we can apply toward increasing African investment in agriculture and accelerating African agricultural transformation and growth.
I thank you for your kind attention.
