African ministers of finance have stepped up a campaign for additional financing led by the African Development Bank (AfDB) to channel funding required to boost production of rice and commercial farming in Africa in order to enable the continent to become an exporter of food.
The Ministers of Finance and Agriculture from the Republic of Guinea, Côte d’Ivoire, Senegal, Madagascar, Niger and Tanzania emphasised the need for the creation of an African agri-based financing facility that would oversee the channeling of adequate finance to the agriculture sector.
While insisting on the viability of commercial agriculture in Africa, the Director of Cabinet Affairs in the Office of the Prime Minister of Côte d’Ivoire, Ahoua N’Doli Théophile, said major international firms were willing to set up agri-based business enterprises to process cocoa in Côte d’Ivoire, but required guarantees. “We have understood the need for this financing facility in Côte d’Ivoire in a practical manner.
“We need finance to set up marketing infrastructure and the cost of marketing these products cannot be passed onto other sectors. We have companies that want to process cocoa for both domestic and international markets and have committed to invest in Côte d’Ivoire,” N’Doli Théophile said.
He noted that Côte d’Ivoire is discussing the release of US $800 million with the AfDB to finance capital flows to the cocoa plantations.
The need for a continental risk financing facility to aid agricultural investments in Africa was also proposed by Madagascar’s Minister of Agriculture, Roland Ravatomanga , who said commercial banks often resort to cancellation of loans to the agriculture sector whenever the demand increased.
Proposals to create an agricultural financing risk facility – a form of insurance agency for investors – featured prominently during discussions at the “Feeding Africa Conference,” which opened at the Abdou Diouf International Conference Centre in the outskirts of the Senegalese capital, Dakar, on Wednesday.
Also, these financial connoisseurs expressed concerns on food sufficiency and the agricultural markets; maintaining that the failure to develop efficient marketing systems would affect food demand and supply in national as well as regional markets.
These concerns, experts say are growing, because most West African countries have set the goal of increasing the production of staple food crops like rice, bananas, onions and cassava, which is adequate to meet national demand and for the export markets, creating fears of a regional commodity excess.
Senegalese Agriculture Minister, Papa Abdoulaye Seck said the concerns of an agricultural commodity excess should not worry African countries so long as opportunities to negotiate for fair trade regulations exist. “The transformation of rice production in West Africa is a challenging issue. We can still determine our relationship with the Asian countries which have been exporting rice to us and redefine trade,” Seck said.
According Seck, statistics show Asian countries could become major importers of rice by 2020, which could benefit the African countries currently investing in rice production. Seck said the AfDB should invest in helping rice farmers reduce post-harvest losses, which, if successfully done, could reduce the import bills by 10 percent.
The discussions at the Dakar conference on agricultural transformation reveal that efforts to improve the rapid industrialization of Africa through farming are ongoing. Nevertheless, governments still require funding to link up local and regional markets and create seamless routes for food trade.