Building Infrastructure and Climate Resilience Will Boost Africa’s Food Production

Africa could be the world’s breadbasket if it has enabling policies, a conducive business environment, adequate and resilient infrastructure, innovative technologies, access to capital, and transparency in governance that will help the continent achieve this potential. 

An article in White & Case says that despite having 60% of the world’s uncultivated arable land, Africa spends a staggering US$78 billion in food imports yearly.

In 2020, more than 20% of Africans face hunger, a figure that is twice as high as any place in the world, and 80% of the continent’s food supply still comes from small-scale farmers, many of whom are engaged in subsistence farming.

Africa’s growing population also means that there are many mouths to feed. Agriculture accounts for 35% of the continent’s GDP and could grow more. The African Development Bank projects that its food and agriculture market could increase from US$280 billion annually in 2023 to US$1 trillion by 2023.  

But what would it take for the continent to become a prominent global food producer?

The article suggests six “levers” that, when implemented, will allow the continent to achieve this potential, which is as follows:

1. Shifting legislation and policies to support and incentivize large-scale commercial farming while supporting small-scale farmers to improve their productivity and competitiveness.
   
   
2. Addressing the infrastructure gap. Africa still lacks adequate infrastructure, and their poorly maintained and outdated roads, rail, and harbor infrastructure hinders farmers from getting their goods to market and adds as much as 30 to 40% to the costs of goods traded among African countries.
   
   While there is an increase in infrastructure investments in the continent, less than 10% reach financial close, with 80% failing at the feasibility and business plan stage. The article points to the “lack of clarity about the commercial viability, political and currency risk, counterparty and regulatory risk, and lack of exit opportunities” as factors in a high failure rate.
   
   
3. Improving access to capital and credit for the private sector to address the investment and funding gap for agriculture. The African Development Bank estimated the current financing shortfall ranges between US$27 billion and US$65 billion annually. This involves creating an environment to attract impact and private investors to help small agribusiness grow into commercially viable projects. Local banks have a crucial role to play – they must develop their capacity, incentives, and infrastructure to support smaller, less commercial businesses profitably.
   
   
4. Resolving the supply chain issues can boost Africa’s food production and agriculture sector. The key is having a reliable and efficient delivery of upstream goods and services and downstream delivery of the goods to market. However, corruption and rent-seeking by third parties can increase the cost of doing business and discourage investment in African agriculture projects.
   
   
5. Improving small-scale farmers’ productivity would require improving transport, irrigation infrastructure, and technology to support storage and access to markets and supplies.
   
   
6. Adapting to climate change. If temperatures exceed the 2°C threshold, impacts on Africa’s food security will be catastrophic. Hence, climate adaptation is crucial.

Climate adaptation strategies include providing farmers with climate-resilient and high-yielding seeds and fertilizer, improving irrigation flood barriers, building early warning weather systems, and investing in infrastructure such as new roads and railways to connect farmers to highly food-insecure areas.

Becoming a global bread basket is a considerable challenge but also offers opportunities for the continent – it will need all the support from international cooperation to innovations led by African scientists, engineers, farmers, financiers, entrepreneurs, and political leaders. The six levers suggested above are an excellent place for Africa to start.

Sources:

Hodder, G. & Migwalla, B. (2023, July 12). Africa’s agricultural revolution: From self-sufficiency to global food powerhouse. White & Case. Retrieved from https://www.whitecase.com/insight-our-thinking/africa-focus-summer-2023-africas-agricultural-revolution

Williams, M. (2022, November 10). Africa’s fragile food and water security threatens us all. Financial Times. Retrieved from https://www.ft.com/content/f3cda3a6-f4ee-4bc4-b512-d1f9f12925ec