Regional Value Chain Development and Promotion in Africa

ECA-AUC-FAO

An ECA Presentation at the Seventh Session of the Committee on Food Security and

Sustainable Development (CFSSD-7) and the Africa Regional Preparatory Conference for the United Nations Conference on Sustainable Development ( Rio+20)

Addis Ababa, Ethiopia, 20 October, 2011

Agriculture is the Backbone of African Economies but:

– Land productivity is less than 55% of world average yields for rice and 34% for maize.

– Labor productivity is less than 60% of that in Asia and Latin America.

– Share of global agricultural exports fell from 15% in the mid-1960s to less than 4% currently.

– Food imports are increasing at a rate 3.2% per year since the early 1990s.

– Regional economies are extremely fragmented along sub-regional and national lines – sub-optimal economic space.

– Market segments closed to each other are fragmented but increasingly open to global trade outside of Africa.

– There are constrained perception of investment and trade opportunities for African agribusiness communities.

– There lacks a vibrant agribusiness industry and services sector to link farmers to evolving input and product markets

Multitude of RECs with Overlapping Memberships

Vision : food and agricultural commodities belts in optimal agro-ecological production zones (Preferential Investments Zones)

Agricultural Value Chain Development and Promotion from

a Regional Perspective

To address the fragmentation of African food and agriculture economy and to maximize the exploitation of regional markets:

– Economies of complementarities and intra-African trade potential – “Comparative” and “Competitive” advantage beyond national boundaries

– Economies of scale at all stages of the value chains– Economies of vertical coordination (transactions)

among the productive/services sectors involved in value chains

Deepen regional integration for the development of coordinated value chains of the strategic agricultural commodities by:

– Moving market integration beyond national and sub-regional levels to encompass the global regional market -- Common African Market

– Mapping potential regional production and processing belts of strategic commodities (REC x Agro-ecological approach)

– Creating an enabling environment for profitable and secure private investment in coordinated regional agricultural input and commodity value chains -- preferential sub-regional/regional agricultural investment zones

– Designing and implementing policies, legal and institutional frameworks, and PPPs to promote private investment in regional agribusiness joint ventures – investment codes, land policies, fiscal policies, etc.

In summary, link efforts on CAADP pillars around the explicit objective of developing regionally-coordinated value chains of strategic commodities for agriculture to yield its full potential in:

– Enhancing food security (reliable and affordable supply)

– Creating value-added and employment, especially for women and the poor (rural and urban)

– Providing capital and inputs to other economic sectors

– Creating demand for the non-farm sectors

– Improving export performance (integration in the global economy)

Regul

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A Multi-Institutional Approach for A Successful and Sustainable Project

Lead Institutions

Support Institutions

Other Stakeholders

Capacity Bldg & Dissemination and Domestication of the RPF

1.Reg. Assmt Studies with CC, LT and Trade, CM

2. Inputs for RPF

What has been done and Where we are going?

Increased awareness of policy makers and key stakeholders on:

1. The benefits and potential for regionally integrated value chains for selected strategic commodities as well as document

2. The underlying issues, challenges, needs and gaps that need to be addressed to facilitate agricultural development in Africa

Strengthened capacities of African policy makers and key stakeholders to mainstream the development and promotion of regional value chains in their agricultural development action plans

A Regulatory and Policy Framework (RPF) for developing Agricultural Regional Value Chains in Africa as a roadmap for implementing the development and promotion of regional value chains in Africa

Outcomes/Outputs

AMESEGNALEHU!

THANK YOU!

MERCI!