by Bayano Valy – SANF 08 No 33
Africa’s growth rate could be derailed by the current global rise in food prices, the African Development Bank (AfDB) chairperson, Donald Kaberuka has warned.
Africa’s overall growth in 2007 was 5.7 percent, almost double the rate in 2000. It is however, hoped that growth for 2008 will rise to 5.9 percent, remaining steady throughout 2009.
The good news is that 31 African countries are likely to grow by over five percent this year, compared to 2007 where only 25 recorded more than five percent Gross Domestic Product (GDP) growth.
However, this growth is now under threat. Prevailing world food prices are sky-rocketing, with increases from US$375 to US$1,100 per tonne of rice just in four months (from December 2007 to April 2008). The prices of fertilisers have in the same period soared to US$1,100 per tonne from US$245 per tonne.
Compared with the fact that Africa imports close to 26 million tonnes of rice, slightly above half of its 50 million tonne consumption – this can only mean that much resources are likely to be deviated from other critical areas in order to fund food purchasing.
Kaberuka pointed out that although the food predicament is an additional hurdle that will put Africa’s ability to manage risks and overcome new threats to great test, it should be seen just as a challenge that can be overcome.
“Even this food crisis, whose effects and supply demand dynamics, has been extensively analysed, can be overcome.”
“Perhaps, for our rural farmers, if given quality support, this can turn out to be an opportunity which they have been waiting for, where farming, large and small, finally, becomes viable businesses rather than a source of scrapping a meagre livelihood,” said Kaberuka.
However, some measures have to be taken first. Africa should first turn to the numerous policy statements, including NEPAD’s comprehensive agricultural policy, as well as argue for the levelling of the playing field in agriculture in the next Doha Round.
Furthermore, rising prices provide an incentive rather than a threat. But the incentives have to be coupled with other initiatives.
For instance, to offset the high cost of fertilisers, the AfDB has approved an African Fertiliser Financing Scheme to ensure the availability of seeds to farmers. The Bank is sure that fertilisers alone will not do the trick, but other inputs and irrigation water have to be considered.
Africa should devise new ways to entice and support private financing of agriculture. While it is true that private investors could do their own irrigation, they need infrastructure, inputs and markets that work, research institutions that deliver and stable policies that encourage growth.
This can however, be provided mostly by the state. Consequently, there is a need to rebuild and beef up ministries of agriculture in the region in order to enable them to plan and coordinate agricultural activities.
Countries have also to have policies biased in favour of women since they are a majority.
Mozambican President Armando Guebuza agreed that soaring world food prices put development projects at risk. “International variations of prices have a negative impact on the productive sector, the balance of payments and the State budget,” he said.
Rather than just a food security problem, the world faces “a large scale social and economic problem”.
Consequently, the international community should commit itself more decisively “in the collective search for solutions to this challenge, which in countries such as ours can interfere in our programme to fight against poverty and to achieve the Millennium Development Goals”.
However, Guebuza emphasised the need for pro-active action on the part of Africans to “transform the challenge posed by the difficult situation we are going through into an opportunity to strengthen our partnerships and to speed up our countries’ development.”
