A lull for the West African music genre Afrobeats was expected in the first month of 2023. This much can be predicted for the first quarter of ... 2023, a necessary spell of relative silence and rest from the dashing throttle of the last few months of 2022.
“We got the continent from colonial powers which was not manageable [or] viable,” Zinsou, an economist and investment banker who served as Benin’s premier from 2015 to 2016, tells The Africa Report on the sideline of the Alliance for a Green Revolution Forum (AGRF) in Kigali, Rwanda. The annual event is organised by Alliance for a Green Revolution in Africa (AGRA), a farmer-centred institution that focuses on transforming Africa’s smallholder farming.
The first post-independence generation of leaders had the challenging task of building states that barely generated revenue, Zinsou says.
In the process, they taxed all levels of agricultural production, including exports, bucking the global trend at the time of taxing imports and subsidising exports. It was these taxes that fed the treasury and built African states.
“In my view, we have an immense financial debt to the farmers and now we have to pay this debt,” he says. “We should ensure that they receive the financial resources out of respect and duty of justice. It’s not that we have to subside for them, we have to give them back part of what they have contributed.”
When he assumed office as the prime minister of Benin in 2015, Zinsou said the first question he had for the central bank governor was: How much is the budget allocation for agriculture? The answer he got was 2%, yet the sector was contributing 27% to the country’s GDP. Such an “imbalance is terrible”, he says.
Is climate change a game changer?
These days, substantial investment in the agriculture sector is even more pressing, Zinsou says, with farmers in dire need of financing to survive climate change.
In the 1960s, agriculture was the main driver of economic growth in almost all Sub-Saharan African countries. As of 2021, the World Bank estimated that agriculture contributed 17% to the continent’s economic growth, behind the service sector and industry, the top two drivers that contribute about 50% and 30% to Africa’s GDP, respectively.
Imagine what it will be with a bit of credit, irrigation and electricity. We have to equip them [farmers] with productivity tools and inputs
In countries like Chad, Sierra Leone and Somalia, agriculture still makes up over 50% of economic growth. However, in other nations, including Comoros, Central African Republic, Ethiopia, Guinea Bissau, Liberia, Mali and Niger, the sector constitutes a smaller portion in the ballpark of 30%.
Even though agriculture is no longer the main driver of economic growth in Africa, Zinsou believes African countries now have a breathing space to shift more funding to the sector to help farmers deal with the impact of climate change.
Lack of public, private backing
Agriculture funding from governments has hardly been flowing despite the Maputo declaration signed almost two decades ago, when multiple countries pledged to allot 10% of their respective annual budgets to the sector.
The said funding from the private sector into Africa hasn’t been substantial either, but Zinsou is optimistic that private equity, which has long been directed towards infrastructure projects in Africa, will start flowing into the sector – next to the climate change funding that the continent has already been receiving.
“We will have this driving force of private liquidity added to finance from development financial institutions and government resources going into the sector,” he says.
Aceli Africa, which mobilises funding for investment in the agriculture sector, aims to fill a $65bn funding gap for African small- and medium enterprises (SMEs).
Climate financing from multilateral development banks in Africa’s agriculture sector nearly quintupled in three years, increasing from $433m in 2015 to $2bn in 2018. It then declined to just over $1bn in 2020, according to a report by the Washington-based Brookings Institute.
Climate change adaptation in the agriculture and food system in Africa requires $15bn per annum, which is less than 1% of the continent’s GDP, the institute says, warning that inaction will exacerbate global warming-induced problems and cost African nations a dear price.
African farmers have proved their worth
Zinsou has high hopes for African farmers. He says the improvements they have achieved in terms of productivity and yields, despite the lack of financial support, have been remarkable, citing Benin’s cotton production which has doubled in six years.
“I think that in terms of skills and rationality, unlike what many think, what they [farmers] have delivered without credit, water, mechanisation is just amazing,” Zinsou says.
“Imagine what it will be with a bit of credit, irrigation and electricity. We have to equip them with productivity tools and inputs.”
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