Kanayo F Nwanze: Smallholders hold key to unleashing Africa's potential

Published on Thursday 29 April 2010 20:50

A SEVERE food crisis threatens southern Sudan while, in East Africa, millions already dependent on food aid, face a sharp rise in the cost of staple crops.

These are just the latest sources of concern in a turbulent period that began two years ago when food shortages hit Africa and Asia due to a worldwide spike in prices. Higher food prices meant that poor people, already struggling to meet basic human needs, were pushed deeper into poverty. On its heels came the global financial crisis, which also hit the poorest hardest.

Agriculture is the main employer, job creator, and export in most developing countries. Historically, it has generated growth in many countries and has been shown to be at least twice as effective in reducing poverty as growth in other sectors. Investment in agricultural and rural development is, therefore, vital to food security and sustainable economic development.

Indeed, the vast majority of today's developed countries grew from strong agricultural foundations, where surplus production generated wealth and prosperity. This is what is happening in Vietnam, and it is the path China and India took on their way to becoming engines of economic growth.

Poverty is predominantly rural. Globally, three-quarters of people living in extreme poverty are in rural areas and depend on agriculture for their livelihoods. About 380 million people in sub-Saharan Africa live on less than $1.25 a day.

Many are malnourished or hungry. But, with some 80million small farms in sub-Saharan Africa producing 80 per cent of agricultural goods, smallholders have a key role to play in resolving the financial and food crises and unleashing Africa's potential to feed itself.

In order to lift people out of poverty and ensure food security, a sustained effort is needed to develop Africa's agriculture and the associated infrastructure – notably roads, telecommunication, and energy – needed to unleash agricultural potential. Strengthening agriculture is one of the best investments any African country can make.

Members of the African Union recognised this in 2003 in Maputo, Mozambique, pledging to increase spending on agriculture to at least 10 per cent of national budgets. Although eight countries have met or surpassed that target, the continent as a whole has not.

But reaching this target is not enough. Governments must create the right policy environment to allow for appropriate investments in research and development to enhance productivity.

Investment must focus on creating a dynamic smallholder sector, generating local demand for locally produced goods and services. In turn, this can spur sustainable non-farm employment growth in services, agro-processing, and small-scale manufacturing.

Agriculture, predominantly on a small scale, accounts for about 30 per cent of sub-Saharan Africa's GDP and at least 40 per cent of export value. In a number of small countries, agriculture represents 80 per cent or more of export earnings.

The potential in these numbers will remain untapped unless African countries put the right policies in place to help agriculture to develop and flourish. But the transformation will not happen until the private sector is fully engaged in agricultural production, processing, and marketing.

Governments must become more investor-friendly to attract private-sector interest.

More broadly, African countries need to put their houses in order. They must continue to deepen the foundations of democracy and ensure the stability that is so critical to growth. It is also crucial they continue to improve their systems to create an enabling environment for dynamic rural growth to transform subsistence farmers into entrepreneurs.

Rural women hold the key to food security. Any nation that does not provide opportunities for women will not reach its full potential. Significant progress must be made to advance women's empowerment and their status – particularly with regard to land and credit.

Finally, although investment in development assistance is key, nations will ultimately have to take responsibility for their own development. No nation, no people, ever experienced growth that sprang solely from external support.

So Africa's development must be made in Africa, by Africans, for Africans. Every tree, every plant, must be fully rooted in its own soil to flourish. Change cannot be imposed from outside, it must be cultivated from within.

&#149 Kanayo F Nwanze is President of the International Fund for Agricultural Development (IFAD), a United Nations' agency.