At first glance it might seem surprising that the African Center for Economic Transformation (ACET) has zeroed in on agriculture as the focus for our 2017 flagship report, launched this week at the World Bank’s Annual Meetings in Washington. But that’s precisely the point: this is not primarily about agriculture, it is about how you transform the broader economy, with agriculture as the catalyst.
We are sitting on a vast, untapped source of economic potential. Our continent is home to more than half the world’s uncultivated arable land, with diverse climates suited to a wide range of plant and animal species. But dated, inappropriate policies and a lack of support are stopping our farmers from moving beyond subsistence to productive and profitable modern farming. We must change that. Our report draws on a wide range of data from across Africa to set out a bold agenda for strategic reforms and innovative programs to get our farms to be more productive and to power the rest of our economy.
Firstly, we must recognize that there is a new mix of players in African agriculture, which brings both risks and opportunities. Growing private sector involvement and developments in technology offer the potential to innovate and scale up production far beyond the reach of African governments with limited cash and resources. At the same time, we need effective regulation and smart programs to ensure competition, and to support smallholders so that the benefits are shared and sustainable.
The most obvious and urgent area for attention is our outdated land tenure system. Eight out of 10 African farmers are smallholders, but too few own the rights to their land. This means they have little incentive to improve it with better irrigation or tools, and banks won’t lend them money to do so since they cannot pledge their land as collateral. Women, who make up more than half of our farmers, generally face the biggest barriers in owning land. This must change, both on moral and on economic grounds.
First, land rights
We must overhaul land rights so that communal access to land is balanced against the need for clearer individual ownership. We must introduce macroeconomic and sectoral policies that ensure farmers can access affordable improved seeds, fertilizer, and credit, with insurance included as standard. We should also do much more to bring knowledge about modern farming to our farmers, and reduce the risks that they face. This could help farmers and stimulate businesses along agricultural value chains, attracting new investments. It should be a priority for those drawing up economic development plans at the national level.
Governments must also help farmers innovate. The “green-revolution” package of improved seeds, fertilizers, and education can work in Africa if well adapted to local conditions – indeed, it is already helping rice farmers in Ghana and Uganda boost their productivity. But this package is too often unaffordable, unavailable or ill-suited to the context. This is a policy failure and must change.
Then, public investment
In addition, we must strengthen the sector’s links with other areas of the economy. Productive farms supply raw ingredients to processing factories, thus creating demand for manufactured inputs, and logistical and other services. This in turn creates employment and raises incomes in the whole economy. But, in addition to policy deficiencies, poor infrastructure impedes these links. Public investment, particularly in roads, is needed, along with clearly thought-through industrial policies that prioritize agriculture and involve smart partnerships with the private sector.
Africa is fortunate that it can leverage new technology to help farmers tackle previously insurmountable challenges to transform agriculture. Drones can help with pest control, while mobile communications connect farmers to each other and the wider economy, and microelectronics mean we can tailor irrigation systems to a wide range of contexts. These are just a few of the numerous opportunities; realizing them will take smart policies and innovative programs and investments from both the public and the private sector.
Africa is vast and diverse – this report makes clear that blanket solutions will not work. But there are clear approaches which African policymakers and business leaders can adapt to their specific contexts to enable our farms to feed our people and grow our economies. The opportunity is huge, but we must get to work now if we are to deliver on this new vision for Africa’s growth.
Dr. Yaw Ansu is the Chief Economist at ACET.