by: dr. b. o. oramah executive vice president (business development & corporate banking ) by:...
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By: Dr. B. O. Oramah
Executive Vice President (Business Development & Corporate Banking )
By: Dr. B. O. Oramah
Executive Vice President (Business Development & Corporate Banking )
INTERNATIONALIZATION OF AFRICA’S INTERNATIONALIZATION OF AFRICA’S AGRICULTURE AND IMPLICATIONS FOR FOOD AGRICULTURE AND IMPLICATIONS FOR FOOD
SECURITYSECURITY
at the IEFA (Organized by PBSF) at the IEFA (Organized by PBSF)
Palm Beach, Florida, USA, April 6-8, 2014Palm Beach, Florida, USA, April 6-8, 2014
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INTRODUCTIONINTRODUCTION
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Thank you for the opportunity granted Thank you for the opportunity granted Afreximbank to participate in this year's Afreximbank to participate in this year's International Economic Forum of the International Economic Forum of the Americas. Americas.
We are happy to be associated with this We are happy to be associated with this event because it gives us the opportunity event because it gives us the opportunity to share our views on the impact of to share our views on the impact of globalization on Africa’s agriculture.globalization on Africa’s agriculture.
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AFREXIMBANK: WHO ARE WE?AFREXIMBANK: WHO ARE WE?
The Trade The Trade Finance Finance
Bank for Bank for AfricaAfrica
122SHAREHOLDERS comprising -African Gov’ts
and multilateral Institutions
-African Private Investors and Financial Institutions
-Non-African Investors
122SHAREHOLDERS comprising -African Gov’ts
and multilateral Institutions
-African Private Investors and Financial Institutions
-Non-African Investors
MANDATE: Promote and
FinanceIntra and Extra African Trade
MANDATE: Promote and
FinanceIntra and Extra African Trade
RATINGS:Baa2/BBB-/BBB-
(by Moody, Fitch/S&P )
RATINGS:Baa2/BBB-/BBB-
(by Moody, Fitch/S&P )
CREATED in 1993 under the auspices of the AfDB
CREATED in 1993 under the auspices of the AfDB
HEADQUARTERED in Cairo, EGYPT
HEADQUARTERED in Cairo, EGYPT
AUTHORISED CAPITAL USD5 BILLION
AUTHORISED CAPITAL USD5 BILLION
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Abundant Labour;
Abundant Water (i.e. Surface, Underground and Rainfall)
Diverse Ecosystem – from Mangrove to Desert
Vast Arable Land
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AFRICA: AGRICULTURE RESOURCE
ENDOWMENTS
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CHARACTERISTICSSMALL HOLDINGS
With Size of 0.2 – 1 hectare per
farmer
FRAGMENTED FARMS Due to Land Tenure System
LIMITED USE OF TECHNOLOGY (Rainfed, Low Mechanization, Chemicals, Seeds, e.t.c)
LABOUR INTENSIVE
LARGELY SUBSISTENCE POOR CREDIT DELIVERY
TRADITIONAL AFRICAN AGRICULTURETRADITIONAL AFRICAN AGRICULTURE OUTCOME
LOW YIELDS
LIMITED PRODUCTION FOR THE MARKET
LIMITED OR NO SUPPORT FOR AGRO-BASED INDUSTRIALIZATION MALNUTRITION ESPECIALLY IN THE RURAL AREAS
POOR ANTHROPOMETRIC INDICATORS
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PAST ATTEMPTS AT RESOLVING THE AGRICULTURE PROBLEMS
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POLICY-BASEDPOLICY-BASED
MARKET-BASED
APPROACH
MARKET-BASED
APPROACH
INSTITUTIONAL
INSTITUTIONAL
E.g. Promotion of Cooperatives, Agriculture Credit Schemes, Government-Run
Mechanization Schemes, Farm Settlements
E.g. Promotion of Cooperatives, Agriculture Credit Schemes, Government-Run
Mechanization Schemes, Farm Settlements
E.g. Rural banking, Subsidy schemes (such as fertilizer, e.t.c)
E.g. Rural banking, Subsidy schemes (such as fertilizer, e.t.c)
E.g. Green Revolution, Commercialization schemes, e.t.c
E.g. Green Revolution, Commercialization schemes, e.t.c
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Governance IssuesGovernance Issues
Inherent weaknesses in
approach (e.g. in subsidy
Inherent weaknesses in
approach (e.g. in subsidy
Diverse nature of Ecosystems
Diverse nature of Ecosystems
InadequateFunding
InadequateFunding
Poor Conceptualization
Poor Conceptualization
REASONSREASONS
FAILURE OF PAST INTERVENTIONS
DID NOT PROVIDE
FOOD SECURITYAfrica could neither feed
itself nor generate enough
revenue to buy what it
needs to feed itself
DID NOT PROVIDE
FOOD SECURITYAfrica could neither feed
itself nor generate enough
revenue to buy what it
needs to feed itself
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GLOBALIZATION
ECONOMIC REFORMS
EMERGING TRENDSEMERGING TRENDS
Integration of Africa’s Agriculture into the
Global Supply Chain:Internationalizatio
n of Africa’s Agriculture
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Challenges of Resource Fixity and Allocation:
Production for Food vs Production for Export
Massive Land Purchases by Foreign Entities: Export of
Africa’s Land Water and Labour
Rising Non-Equity Modes e.g. Contract Farming
Changing Taste as Imports replace traditional food
items
CONSEQUENCES OF INTERNATIONALIZATIONCONSEQUENCES OF INTERNATIONALIZATION
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Worsening of the Food Situation in Africa
RISKSRISKS
Food Consumption Per Capita Per Day
1984-86 1997-99
2015
Sub-Saharan Africa 2057 2195 2360
Industrialized Countries
3206 3380 3440
World 2655 2803 2940
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Malnutrition especially for the most vulnerable
(Women and Children)
E.g. African Malnutrition Population
2010 175 Million
2012 239 Million
Turning Land Owners into Labourers
Possible Political Instability from Social Unrest
RISKSRISKS
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Adoption of a MODEL that brings BENEFITS of
COMMERCIALIZATION while ENSURING FOOD
SECURITY – SUSTAINABLE INTENSIFICATION
Adopt Pillars I-IV of African Union’s Comprehensive
Agriculture Development Programme (CAADP)
WAY FORWARDWAY FORWARD
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Pillar I: Extending Area Under Sustainable Land
Management and Reliable Water Control
Systems
Pillar II: Improving Rural Infrastructure and Trade
Related Capacities for Market Access
Pillar III: Increasing Food Supply, Reducing Hunger
and Improving Responses to Food Emergency
Crises
WAY FORWARDWAY FORWARD
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Pillar IV: Improving Agriculture Research and
Technology Dissemination and
Adoption
WAY FORWARDWAY FORWARD
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Focus on Sustainable Contract farming as an optimal
approach that meets market needs while guaranteeing
food security. E.g. Hortico in Zimbabwe and
Farmapine in Ghana.
WAY FORWARDWAY FORWARD
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Hortico - Zimbabwe
Farmapine - Ghana
Involves 3000 Smallholders; 60% being Women; Restriction of Quantity of Export Crop to free Land for Other Food Crops
A Cooperative Market Strategy and Market Based Development Approach with Support from the World Bank.Enabled farmers to earn an average income of US$5,000 compared to GDP per capita of US$320 in 2004 allowing farmers to buy needed food for consumption.
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Thank You All
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