the african agribusiness and agro-industries development initiative (3adi)
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High Level Conference on the Development of Agribusiness and Agro-Industries in Africa
The African Agribusiness and Agro-industries Development
Initiative (3ADI)
Executive Summary
• The 3ADI presentation is delivered in 3 ModulesFirst, is the introduction and contextSecond, is the Program Framework: 4 main areasThird, is the Program Approach: building on other initiatives in Africa and means to build alliances .
• Main Messages: 1.We are not re-inventing the efforts in Africa but
rather build on them2.Great opportunities exist in agro-industries for
serious interventions and building of capacity: HR and Technology
Overture
What makes 3ADI different• Developed by Africans• Proposed, written, and presented by
Africans. • It’s about financially and commercially viable
interventions• It’s about adding value• It links with the private sector, especially
small producers and processors
what we are aiming at
• A programme for the promotion of agribusiness and agro-industries development endorsed by African Heads of State and Government (HOS).
• Agreement to establishment financial modalities for agri-business and agro-industry investment endorsed by HOS.
• Action plan for programme implementation and financial mechanisms endorsed by HOS.
• Launching of the African Agribusiness and Agro-industries Development Initiative (3ADI)
3ADI Expectations
3ADI How did we get here?• Global Agro-industries Forum (GAIF), New Delhi, India, April 2008
– Hosted by the Government of India– Event jointly organized by FAO, UNIDO and IFAD– Participation from 110 countries; 500 senior level delegates
• Representatives of 44 African countries recommended the organization of a regional forum– need to consider specific issues and priorities for agro-industries and
agribusiness development in Africa• Consultations with African leaders and organizations led to the decision to
hold this High Level Conference on the Development of Agribusiness and Agro-industries in Africa – HLCD-3A
www.gaif08.org
3ADI HLCD-3A Co-organizers
• Government of the Federal Republic of Nigeria (Hosts)
• African Union Commission (AUC)
• African Development Bank (AfDB)
• Food and Agriculture Organization of the United Nations (FAO)
• International Fund for Agricultural Development (IFAD)
• United Nations Economic Commission for Africa (UNECA)
• United Nations Industrial Development Organization (UNIDO)
3ADI Consultative Process
1. Concept Note Developed by UNIDO and FAO
2. Background document commissioned by UNIDO/FAO; “Accelerating Agribusiness & Agro-industries Dev. in Africa”
3. Expert Group Meeting on Development of Agribusiness & Agro-industries in Africa: Constraints & Opportunities. 27-29 April 2009 – Vienna
4. UNIDO/FAO/ Executive Secretariat meetings with the Government of Nigeria on administrative & logistic matters. 4-7 May 2009, Abuja - Nigeria
5. Writers workshop - 26-30 May 2009 – Rome
6. CAADP: private sector convening on CAADP implementation, 17-18 June, 2009 - Dakar, Senegal
7. UNECA Expert Group Meeting on Promoting Agro-industry & Agribusiness Development in African Countries, 22-24 July 2009 - Addis Ababa
8. Periodical Meetings of the Joint Organizing Committee; Vienna, Rome, Abuja & Tunis
9. Meeting on Financial mechanisms in Support of Agro-industries & Agribusiness Development in Africa; hosted by AfDB in Tunis, Jan. 2010
10. 3ADI document - African Agribusiness & Agro-industries Development Initiative: A Programme Framework
3ADI Consultative process- II
3ADI Needed Investment (I)1. Capitalizes on renewed impetus for growth & development for
Africa through increased agricultural investment
2. Recognizes the need for increased agro-based investments in order to meet food security goals
ITEM Sub-Saharan Africa1. Primary Production (including mechanization & other power sources) 496
2. Downstream Support Services (storage; markets & first stage processing) 444
TOTAL 940Source: Capital Requirements for Agriculture in Developing Countries to 2050, FAO, Rome, 2009
US$ 15 billion/year in additional investment needed
Cumulative Investments over 2005/07 in billion US$
3ADI Needed Investment (II)
3. Recognizes urgent need to increasing profitability (i.e., strengthening effective demand for finance) of agribusiness & agro-industries.
4. Focuses on ways to unlock local capital to meet agribusiness & agro-industry investment needs, especially in short run until public sector investments take hold.
PROGRAMME FRAMEWORK
The African Agribusiness and Agro-Industries Development Initiative
The goal of the 3ADI is to have an agriculture sector in Africa which, by the year 2020, is made up of highly
productive & profitable agricultural value chains that:
3ADI GOAL & 2020 Targets
1. effectively link SMS agricultural producers to markets;2. contribute effectively to increasing farmers’ incomes through
value-addition processes;3. supply higher-valued & differentiated food, fibre, feed and fuel
products to consumers at local, regional & global markets;4. lead to retention of a higher proportion of the consumer price in
the communities or countries where the primary production takes place;
5. utilize natural resources in an overall sustainable manner; and6. act as an effective basis for industrialization & generation of
increased & high quality employment
Main Objective
– To increase private sector investment flows going into the agriculture sector in Africa by mobilizing resources for agribusiness & agro-industrial development from domestic, regional & international financial systems
3ADI Main Objective
3ADI What the Initiative will do?
• Specifically the Initiative will:
1. Leverage current attention to agriculture in Africa to accelerate the development of agribusiness & agro-industries sectors that ensure value-addition to Africa’s agricultural products;
2. Support a well coordinated effort to share knowledge & harmonize programmes in ways that capture synergies, avoid fragmented efforts, & enhance developmental impacts;
3. Support an investment programme that will significantly increase proportion of agricultural produce in Africa that is transformed into differentiated high-value products.
3ADI Expected Results (I)
• Four main areas of support essential for agribusiness & agro-industries devmt:
1. Enabling policies & public goods;
2. Value chain skills & technologies;
3. Post-production institutions & services;
4. Reinforced financing & risk mitigation mechanisms
3ADI Expected Results (II)
1. Enactment of enabling policies & provision of public goods:
(i) Sector Strategies & Plans;
(ii) Legal and Regulatory Frameworks;
(iii) Grades & Standards;
(iv) Agricultural Mechanization;
(v) Markets & Trade Infrastructure;
(vi) National & Regional Trade Policies
3ADI Expected Results (III)
2. Development of skills & technologies needed for post-production segments of agricultural value chains:
(i) Producer, Commodity & Industry Associations;
(ii) Value Chains Facilitation;
(iii) Producer & SME Skills Building;
(iv) Technology Development & Transfer;
(v) Vocational, Business & University Training
3ADI Expected Results (IV)
3. Innovative Institutions & Public Services:
(i) Contract Farming & Out-grower Schemes;
(ii) Business Incubators, Hubs & Clusters;
(iii) Research, Technology & Agro-Food Parks;
(iv) Product Labelling & Certification Schemes;
(v) Commodity Exchanges & Market Information
3ADI Expected Results (V)
4. Finance & Risk Mitigation:
(i) Public-Private Partnerships;
(ii) Loan Guarantees;
(iii) Investment Funds;
(iv) Value Chain Finance;
(v) Risk Mitigation Products;
PROGRAMME APPROACH
The African Agribusiness and Agro-Industries Development Initiative
…the bulk of world food production is still concentrated in few regions…
315
2 4
5
55
35
Edaphoclimatic Conditions
Subsidies: US$ 350 billion/yr
Larger gains (Trade Balance improving by more than 0.2 percent of GDP)Small impacts (Trade balance changing between -0.2 percent and 0.2 percent of GDP )Smaller losses (Trade balance worsening by less than 1 percent of GDP and more than 0.2 percent of GDP)Large losses (Trade balance worsening by more than 1 percent of GDP)
No data
...during the food crisis (food security) among the most affected areas, Africa is included & the food import bill of the region have been
of US$254 billion in (2007), 33% higher than in 2006...
Source: IMF, 2008
Source: UNIDO, 2006; MVA – Manufactured Value Added
…although the share of MVA of developing countries has increased in the last 25 years it still responds to a limited amount of the world MVA…
Distribution of World MVA (%) (2005)
26
4
70
020406080
100
1980 1985 1990 1995 2000 2005
Developing countries Transition economiesDeveloped market economies
30
Sour
ce: U
NID
O, 2
006
Dist. of MVA by Developing Country Groups (%) 2005
Africa
LAC
S., E. & S-E. Asia
ChinaW. Asia & Europe
0
20
40
60
80
100
1980 1985 1990 1995 2000 2005
…and Africa, besides having the lowest share within developing countries’ MVA has even experienced a decreased from 06 to 03%…
5
41
20
31
36
47
12
3ADI Programme Approach (I)
1. CAADP Pillar II as overarching Institutional Framework;
2. Integrating into RECs;
3. Priority focus on domestic & regional markets;
4. Public support for engaging the private sector;
5. Synergistic & complementary financial mechanisms;
6. Preliminary ideas on innovative financial facility
3ADI
• 3ADI contributes to overall objectives of CAADP while addressing primarily its Pillar II
– Improving rural infrastructure & trade-related capacities for market access
CAADP, particularly Pillar II, is the overarching institutional framework
Programme Approach (II)
3ADI
• An African owned initiative– it will work closely with African Regional Organizations &
Regional Economic Communities throughout all stages of its design, inception & implementation;
– it should benefit from & be complementary to ongoing initiatives;
– it will ensure stakeholder involvement through engagement with existing entities that represent agribusiness and agro-industries in Africa
Integrated into African Regional Organizations, Alliances & Initiatives
Programme Approach (III)
3ADI
1. Domestic food staples in Africa, roughly a US$50 billion industry, will double by 2015;
2. Growing potential of domestic agri-food markets in Africa, fuelled by rapid urbanization rates & income growth;
3. Increased trade in domestic & cross-border markets alone expected to reach US$30 billion by 2030;
4. Focus is consistent with priorities identified & pursued by African organizations and policy makers
Priority to Domestic & Regional Markets
Programme Approach (IV)
3ADI
1. Engagement & cooperation of actors from both the public & private spheres of the African agri-food economy essential for success of 3ADI;
2. Public-private cooperation will be instrumental to implementation (also essential in mgt & oversight)
Public Support for Engaging the Private Sector
Programme Approach (V)
3ADI
• Designed to complement & act in synergy with the existing financial facilities, bridging the known gaps & unleashing newer financial opportunities, primarily those that can be supported by the African financial system itself
• Unique features– focus on downstream segments of value chains– the strategic emphasis on leveraging financial resources from African banks – wider geographical coverage, when compared to existing programs and financial
facilities that cover the agri-food sector in Africa.
• African multilateral organizations & financial institutions will need to play an active role in any governance structure to be established for the 3ADI & its financial modalities
Synergistic and Complementary Financial Mechanisms
Programme Approach (VI)
3ADI
• Consultations in progress1. Parallel meeting of financial professionals is currently being held in
another room to consider a concept and framework for financial modalities in support of 3ADI;
2. Concept tabled for discussion envisages a financing mechanism with two windows / channels that will deal respectively with public & private sector type funding;
3. After the outcome of the financial modalities in support of the 3ADI further consultations expected
Financial Mechanisms of 3ADI
3ADI
• What we expect from your deliberations:
– Discuss & refine the programme framework;
– Advise on the development of the financing modalities;
– Provide guidance on moving forward;
– Commit to its implementation.
The Way Forward
3ADI
THANK YOU!
For more information & follow-up, please check
WWW.HLCD-3A.ORG
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