“A path to agro-investments replacing international food aid”
25-27 May 2009 | Zanzibar, Tanzania Rescheduled to 28th to 30th September 2009 Organised by Europe SADC-States Bridge (ESSB) in cooperation with the Kuwait Fund for Arab Economic Development, the Islamic Development Bank and the African Development Bank [Excerpts below] The Important Role of Agro-Investment
Africa has a high potential in order to help fight the global food crisis. Many African countries comprise arable land and climate conditions favourable for growing agricultural products. Furthermore, approximately two third of the continent’s population is employed in the agriculture sector. Although conditions are in favour of high rates of food production Africa is still the biggest receiver of International Food Aid.
The rising need for food imports comes at a time when the exportable agricultural surplus worldwide has declined, as food markets are tight and stockpiles declining. Many exporter countries like India and Vietnam have implemented export restrictions in order to supply food to their domestic markets. Thus, many countries are looking for investment opportunities in the agriculture sector.
Due to the geographical and geological conditions, the African continent is a perfect partner in that area. Most African countries have a high potential to increase agricultural production and export large scales of agricultural products. But they lack the expertise and technology to effectively use these favourable conditions in order to secure the global food production.
During the General Assembly of the UN on 24 September 2008 in New York, USA and the UN Conference on Financing for Development in Doha, Qatar (29 November to 2 December 2008) many African Heads of State pointed out that there is the need to boost agricultural production in order to replace food aid, which will help fight the global food crisis.
In order to do so, investments in the area of innovative methods and technologies as well as agriculture equipment are vital. The Africa-Arab Agro-Investment Summit addresses this by its vital goals, such as facilitating partnerships in the margin of agriculture projects and supporting research & development in order to apply new technologies for a more effective and sustainable food production.
Thus, the people of Africa will benefit from this ground-breaking event toward agro- investments facilitating World food security and replacing international food aid.
Issues to be addressed
President Pedro Rodrigues Verona Pires of Cape Verde underlined during the General Assembly of the UN on 24 September 2008 the need to boost agricultural production. “The food crisis has endangered hundreds of millions of people,” he told the Assembly. “It is clear that urgent action is needed to guarantee greater agricultural production able to satisfy present and future needs. This goal requires the promotion of agricultural policies that are consistent with the needs of the situation, the participation of rich and technologically advanced states as well as the technical support of international organizations.”
Issue 1: Implications of projected food price inflation and global population growth
Besides the dominant rent inflation, food inflation has been put in the spotlight in the wake of global food price hikes. Food price inflation constitutes a major strategic challenge for the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, U.A.E.) as they have rapidly growing populations but a declining agriculture due to lack of water and arable land. Food inflation can also be the source of significant social unrest, as it hits lower income groups especially hard because they have to spend a relatively high share of their disposable income on food. The GCC countries have already started envisaging agricultural investment in Africa as well as Asia. The potential for African countries to engage in agricultural exports can be clearly identified. Many African countries have arable land as well as internal fresh water resources or sufficient rain falls. Still the export potential is strongly linked to Foreign Direct Investments to the agricultural sector. A considerable amount of new food production would be demanded by a growing population in Africa and agricultural production would need to be increased beyond the growth of the population. Furthermore, agriculture in Africa is still dominated by small plot family farms which often produce for subsistence or local markets and do not have access to larger national or international markets. Thus, the crucial factor is to improve productivity. Considerable productivity gains could be expected by larger plots and the advent of irrigation and mechanisation, which can be reached through Foreign Direct Investments to the African agriculture sector.
Issue 2: Context of Agricultural Trade with Arab Countries & Trade and Movement of Agricultural Goods and Services
Review of current cooperative programmes carried out between Africa and Arabic agricultural enterprises in agricultural investment and trade. The session will look at business initiatives to work with governments to set up improved customs facilitation and other trade related procedures to liberalise movement of goods, services and labour, as well as phasing in of harmonised investment, trade and tariff regimes.
Issue 3: Africa’s Agricultural Financing and Investment Policies
African delegates will make a briefing on Africa's agricultural financing and investment, policies, as well as the development trend in the future. Foreign delegates are expected to introduce the international agricultural investment projects and proposals as well as relevant policies.
Issue 4: Enabling Environments for Agribusiness and Agro-Industries Development in Africa & Accelerating Agriculture Development
The Summit will examine priorities in three areas: transport and trade corridors (road, rail, and air), new agricultural technologies and growth of agricultural productivity. The needs are clear, the capacity to deliver is available, and there is a consensus that there is a ready supply of available investment capital. So how can the implementation be accelerated? The summit will explore new mechanisms at national and regional level to strengthen the capacity to speed up delivery of public private partnerships (PPPs), and gear up for cross border investments in the agriculture sector.
Issue 5: Access to Finance for Development
The conference will examine new approaches to new lending policies and instruments for the SMME and SME sector, promoting access to finance for empowerment of rural entrepreneurs and to improve agricultural production and agro-industry. Distinct Development Banks will outline their financing strategy and goals for Agro-Investments to Africa. Growing numbers of private business people are looking for projects they can support or invest in. Thus, they constantly look for summits and congresses with regard to investment opportunities. As a consequence, one important goal of this summit is to bring them together with various project owners.
Issue 6: Bilateral Meetings
Arab and foreign investors as well as agricultural enterprises planning to make agricultural investment in Africa are invited to the summit in order to discuss investment and business opportunities on a bilateral level. Furthermore, a fair for recommended agricultural projects will be held in order to facilitate the exchange for agricultural investment and cooperation proposals between the investment institutions, investors, investment promotion agencies as well as agricultural enterprises and agricultural development institutions. Additionally, a round table session for heads of state as well as ministers of agriculture will facilitate bilateral talks between both regions.
Issue 7: Concrete Cooperation Opportunities in the Agriculture Sector
The 1st Africa-Arab Agro-Investment Summit applies a holistic approach to the topic of agro- investments in order to increase the productivity in this sector. The goal is to secure the sustainability for this ground-breaking event. Thus, after the Summit several projects and joint ventures should be pursued between Africa and the Arab World. To facilitate this, the ESSB has requested the African governments to present tangible projects in the fields of:
- Land leasing regulations
- Land available for investment
- Climatic condition prevailing to land in question
- Every country will bring at least commercial African farmers looking for joint ventures with the Arab World
