african development bank group

Report
AFRICAN DEVELOPMENT BANK GROUP
West & Central Africa Fourth Agricultural
Sciences Week, Niamey, 16-20 June 2014)
Agriculture Transformation Through
Commodities
Value Chains Development
Dougou KEITA, Manager, AfDB
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AFRICAN DEVELOPMENT BANK GROUP
AGRICULTURE : A KEY AFRICA GROWTH
ENGINE
Shared growth engine
About 1/3 GDP
ECOWAS: 36% (2000-2009)
1st employer
About 70% of africans majority of
whom are women in agricultre
sector
S=
5,1%
AGRICULTURE
budget
Investing in Agriculture
Agriculture Subsidy
Croissance économique du continent
Climat & environment
Sustainable growth
Environnemental protection
Green growth
ECOW
AS
External Accounts balance
High food import
Impact of global food prices
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AFRICAN DEVELOPMENT BANK GROUP
opportunities
Challenges
Regional markets
Number of people affected by
Natural
disaster
victims (nber)
Natural
Disasters
River Basins Niger
ABN
Sénégal OMVS
Lac Tchad CBLT
Bassin du Congo
...
Recurent food crisis due to drought
Impacts of climat change; soil
degradation; food price volatility;
high demography; urbanization;
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2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
1965
Number
Existence of important regional markets (high
demands due to high income, urbanization & high
demography); large transboundary river bassins;
Important irrigation potential; large yield increase
potential; NEPAD / CAADP; ECOWAP
AFRICAN DEVELOPMENT BANK GROUP

Key sector constraints include:
Lack of access to production and
productivity enhancing technologies
 Limited capacity of sector institutions
 Poor production, processing and
marketing infrastructure
 Poor incentive system

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AFRICAN DEVELOPMENT BANK GROUP
Increasing agricultural growth and
productivity will require a wide range of
actions to address the challenges set out
above.
Priorities can be summarised in terms of
“the four Is”:
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 Adequate Incentive system;
 Adequate production, processing
and marketing Infrastructure;
 supporting Innovations; and
 Strengthening institutional capacity
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AFRICAN DEVELOPMENT BANK GROUP
How to efficiently support agriculture
sector development for


Wealth and employment creation
Food and nutrition security ?
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AFRICAN DEVELOPMENT BANK GROUP
Lessons
Past interventions in agriculture addressed on-farm
production constraints, without due consideration to
value addition, marketing and other backward and
forward linkages.
Such projects had limited success and were not
effective in:
 achieving their expected results
 ensuring sustainability
 Impacting gender
 protecting the environment
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AFRICAN DEVELOPMENT BANK GROUP
Commodities Value Chain Development
gives equal attention to:
production and productivity
value addition through processing
marketing.
 is demand-driven, public sector enabled,
and private sector led.
 links small/medium scale producers with
private operators.

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AFRICAN DEVELOPMENT BANK GROUP
 promotes contractual relationship
between private operators and farmers’
groups, private operator providing services,
such as:
 credit for inputs
 training in good agricultural practices
 transportation
 guaranteed market for smallholders’
produces
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AFRICAN DEVELOPMENT BANK GROUP

targets two major groups of beneficiaries:
 economically active smallholders willing
to participate in commercial agriculture;
 existing or potential small-scale
entrepreneurs and business
associations who provide services to
rural households.
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 focuses on limited number of commodities,
selected based on:
 market potential
 financial viability
women preferences
• Commodity Business Plan (CBP) constitutes the basis for investment
decisions.
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 Commodities for Ghana NRGP included:
Industrial crops( soybean; cowpeas, groundnuts;
brewery sorghum);
Women commodities (sheanut, sesame,
moringa, rice);
Four animal products (small ruminants, pigs,
guinea fowl, and fish);
Export fruits and vegetables (okra, chilly, French
beans, other vegetables, papaya, mango);
Certified seed production.
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AFRICAN DEVELOPMENT BANK GROUP
Incentives for Private Sector Engagement
0% duty on imports of agricultural machinery
and equipment
 Removal of restrictions on areas of
investment and maximum equity ownership
by foreign investors
 No currency exchange controls – free
transfer of capital, profits and dividends

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AFRICAN DEVELOPMENT BANK GROUP




Constitutional guarantees against nationalization /
expropriation
Pioneer tax holiday for agricultural investments
Infrastructure, Innovations and Institutional
capacity support
Alignment of stakeholders’ interests
 Land tenure
 Competitiveness risks
(unfair trade practices - raising tariffs to mitigate)
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AFRICAN DEVELOPMENT BANK GROUP
Uganda – AAMP & CAIIP: Some Results




Increase yields by more than 50% from 2002 to 08
Increase households’ income by 15% (2002 to 08)
24% of subsistence farmers moved to commercial
farming from 2002 to 2008
Number of traders accessing markets increased by
72% on busy market days and 35% on non-busy
market days
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AFRICAN DEVELOPMENT BANK GROUP


Increased of commodities farm gate prices
 Irish potatoes: from UGX 12,000 to 25,000
per bag
 Pineapple: UGX 300 to 800 / fruit
 Milk: UGX 100 to 300 / l
 Bananas: UGX 500 to 3000 (bunch)
Post-harvest losses reduced by over 20%
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AFRICAN DEVELOPMENT BANK GROUP
Conclusion


Interventions using the commodities value
chain approach have a greater chance to
transform agriculture.
They are more likely to:
build the capacity of the agriculture sector
institutions
provide incentives for the sector growth and
performance
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AFRICAN DEVELOPMENT BANK GROUP


promote the use of innovations (science &
technology)
develop production, processing, and
marketing infrastructure
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AFRICAN DEVELOPMENT BANK GROUP
Messages
 Agriculture specialists would do well to
promoting this approach. It is an efficient
strategy to:
 create shared wealth and employment
 contribute to food and nutrition
security,green & inclusive economic
growth, on a sustainable basis
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AFRICAN DEVELOPMENT BANK GROUP
Thank you
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