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Africa’s agriculture and food crises

By Charlie Mitchell

Far-reaching structural reforms and massive investment are required to ward off disaster in sub-Saharan Africa.

Sub-Saharan Africa emits just 0.55 per cent of global harmful emissions, but is paying a heavy price for climate change, which is destroying crops, killing livestock, disrupting transport links and leaving millions without reliable access to food.

Add to that global economic headwinds, the lingering effects of the coronavirus pandemic and Russia’s war in Ukraine, and the region is facing a perfect storm. “Africa is moving backwards in its efforts to end hunger, food insecurity and malnutrition [due to] multiple and overlapping shocks and protracted crises”, Abebe Haile-Gabriel, the UN Food and Agriculture Organization’s regional representative for Africa, told a conference in Addis Ababa, Ethiopia, on October 10.

Experts say reversing the tide is possible with structural reforms, and massive public and private investment in infrastructure and agriculture in sub-Saharan Africa, where 50 per cent of the population relies on rain-fed farming for their livelihoods. Yet, with food prices in Africa currently 40 per cent higher than in the rest of the world, time is running out to save millions from avoidable hunger.

No region is more food insecure today than sub-Saharan Africa. A broad swath of Kenya, Ethiopia and Somalia is currently experiencing the worst drought in 40 years, leaving 36mn people at risk of going hungry. In Turkana County, Kenya’s worst-hit area, livestock have died by the thousand and parents have little to feed their children beyond wild fruits. Kenya’s great lakes, including Baringo and Naivasha, once tourist attractions, have been overflowing, partly due to climate change, swallowing homes and farms.

Meanwhile, arid Chad has seen torrential rains and floods. In northern Ghana, erratic rains are pushing millions to the brink of starvation. In April, floods killed almost 500 South Africans and tropical storms hit Madagascar and Mozambique. A 2019 report from the World Meteorological Organization warned that a temperature rise of 4C from pre-industrial levels would wipe 12.1 per cent off Africa’s gross domestic product. According to the WHO, climate change could kill 250,000 Africans per year between 2030 and 2050.

Farmers hit hardest

African farmers were hit hard by Covid-19, which disrupted global supply chains. Tonnes of fruit and vegetables rotted in hot lorries held up for checks at national borders. Farmers had barely recovered when Russia invaded Ukraine, sending food and fuel prices surging. East Africa got 44 per cent of its wheat from the warring nations, causing the price of that commodity to soar. Russia is also the world’s leading supplier of fertiliser, which trebled in price in Africa. In May, the president of the African Development Bank, Akinwumi Adesina, warned that fertiliser shortages alone could cause food production in Africa to drop by a fifth.

Ghana is suffering as a result. Its northern region normally has just one rainy season each year. There, 90 per cent of people rely on agriculture for their livelihoods and only 1 per cent of cultivated land is irrigated, but the region is now experiencing increasingly erratic rainfall, with long dry periods due to climate change.

Kenyan economist Reginald Kadzutu, CEO of Amana Capital, says projected crop yields of maize, wheat, millet and other commodities are key indicators of the impact of climate change in Africa. “As temperatures and rain patterns change, the yield per acre is expected to drastically drop,” he says. “Maize yields, for example, increased by 71 per cent between 1961 and 2019. However, the area under cultivation also increased by 60 per cent, meaning real yields have actually been reducing.”

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Further complicating matters are poor infrastructure and structural weaknesses in many African economies, including sluggish growth, corruption, high public debt and weak currencies, which increase the cost of importing food. Roughly 85 per cent of Africa’s food supply comes from outside the region, at an annual cost of $43bn, according to the World Bank, eroding foreign reserves and further sinking African currencies.

Senior IMF economist Pritha Mitra says climate change and inadequate infrastructure affect all aspects of the agriculture sector, from food production to transport and storage, as does insufficient electricity access. Today, an estimated 600mn Africans go without stable power.

“There is inflation, there are pressures on the current account balance and on international reserves as a result of that, and it also affects capital inflows coming into the countries because the risk factor for these countries is growing,” says Mitra. “Debt levels are high and governments want to help their people, but where are they going to get the financing to do it?”

A wider problem

According to the UN, one in five Africans faced hunger in 2021. At 278mn people, that is more than double the proportion in any other region. Based on current trends, that number is predicted to rise to 310mn by 2030. In May, the African Development Bank approved a $1.5bn seed and fertiliser programme to help countries avert a looming food crisis.

Food insecurity does not just weigh on short-term economic growth by fuelling hunger and driving up inflation, experts say. In the longer term, undernourished children who have to leave school see their earning potential diminished and are less able to contribute to the economy. It can also fuel political instability: a decade ago, food price hikes helped prompt the Arab Spring.

The challenge might be clear, but public and private investment in food security has still fallen short. The Maputo Declaration, signed in 2006, saw African governments commit to earmark 10 per cent of their total public expenditure for agriculture, but only a handful, including Malawi and Rwanda, have ever met that threshold. Others, including Ghana and Kenya, barely reach half of that.

“For countries that have done that for a significant period of time, we have started to see a change,” says Philip Osano, Africa centre director at the Stockholm Environment Institute. Kadzutu adds: “Africa needs to invest in infrastructure in the agriculture sector, from farming and transportation to value addition and storage.”

Mitra says governments in the region have now begun reorienting public investment to focus more on infrastructure and agriculture, “but the issue is that their starting point is so low that with each of these shocks they are hit really hard. So, the number of food insecure multiplies quickly and it takes time to implement and realise these investments.”

Private-sector investment is beginning to rise amid heightened climate change awareness, analysts say, but there is a long way to go to make up for the shortfall. “The private sector has shied away from investing in agriculture because it is considered risky,” says Apollos Nwafor, vice-president of policy and state capability at the Alliance for a Green Revolution in Africa, which supports farmers with science-based solutions. “They need confidence to seize growth opportunities and provide financing.” He adds that the annual unmet demand for private sector finance in agriculture is around $180bn.

A joint effort

Time is not on Africa’s side. The continent’s population is growing rapidly, outpacing all others. By 2050, every fourth baby born globally will be Nigerian. Without action by African governments and international partners, millions could starve.

Averting that requires a multi-pronged approach involving governments, international lenders, aid agencies, local banks, wealthy countries, African non-governmental organisations and the African Development Bank to pump investment into climate change adaptation, agriculture, infrastructure and the energy transition. “Hunger is the world’s greatest solvable problem, but instead of solving it, we are marching backwards,” IMF managing director Kristalina Georgieva said in October. “The world has to unite around addressing food security.”

Much of the focus of private-sector investment is today on new technologies that give farmers access to early warning systems, mobile banking, farm data and loans. Digital platforms have sprung up that allow smallholders to buy fertiliser and seeds or connect them directly to new markets, boosting profits and lowering food prices.

Pest control can be digitised too in sub-Saharan Africa, where in 2020 495mn people, or 46 per cent of the population, had a mobile phone, according to the GSM Association, an industry body. In Kenya, drone technology allows some farmers to monitor their crops, although only those with money to invest can make effective use of data. Still, the UN Food and Agriculture Organization estimates that digital tools saved 34mn livelihoods in east Africa during the locust invasion of 2020.

Cash transfers help people rebuild after bad weather, and invest in technology and resilience on their farms. Insurance companies can use mobile money to offer new products for African farmers, which would cushion them against the impacts of climate change. Already, an African Union scheme has allowed drought-plagued countries to pool risk by taking collective insurance. In countries that have been slow to take up new technologies, farmers have paid the price, Osano says.

Beyond new technologies, farmers’ collectives backed by local NGOs and the UN have been proliferating. Acting collectively, they are able to negotiate better prices and invest in infrastructure. Finally, a staggering 45 per cent of food produced in Africa is lost post-harvest because of a lack of refrigeration, insufficient storage and poor infrastructure. “By investing in post-harvest management, you can really contribute to food security in a big way,” says Osano. Rwanda, he adds, has made huge strides in this area, boosting productivity and reducing poverty.

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African government policy has historically focused on agricultural input subsidies, which are making a comeback amid the current crisis. Although these subsidies are not on the scale seen in Europe, most economists say they have proven counter-productive in Africa. “Ultimately what our work finds is that inequality is reduced the most if the government invests in things like irrigation, roads and helping improve regional trade integration,” as well as cash transfers, says Mitra.

There are plenty of other solutions that cash-strapped governments can pursue without affecting their budgets, such as reducing regulatory burdens, improving coordination with donors and the private sector, and liberalising regional trade. Kenya, for example, has managed to boost supply of affordable climate-resilient seeds by streamlining seed regulations.

The search for backers

The landmark Africa Continental Free Trade Area (AfCFTA) should allow bumper harvests in one region to offset shortfalls elsewhere, but neighbouring markets are often inaccessible due to trade barriers. “AfCFTA has faced a slow start as countries work towards harmonising trade policies, but promises to be a game-changer once fully operationalised,” says Nwafor.

Educational programmes to boost financial literacy and investment in credit registries can shore up African financial systems, while mobile banking allows creditors to obtain more information about customers, reducing their risk.

On a larger scale, the global shift towards net-zero might reduce the impact of climate change. Yet African countries insist they cannot develop with renewable energy alone. With hundreds of millions lacking electricity, suggestions that African countries should leave fossil fuels in the ground are seen as hypocritical, particularly as Western countries scramble to fill shortfalls of Russian gas.

Uganda is attempting to build a 230,000-barrel-per-day pipeline from its Rift Valley oil fields to the Tanzanian port of Tanga, but European officials have loudly opposed it, angering president Yoweri Museveni. In September, US climate envoy John Kerry urged African countries to reduce their emissions. As a result, China has emerged as a major backer of African energy projects with European investors staying away.

“Even if Africa was to move to net-zero now, it is actually negligible compared to global emissions,” says Osano. Instead of focusing on climate mitigation, he says, investment should be directed towards African climate change adaptation, which would cost an estimated $5.5bn annually. However, OECD figures show $16.5bn was invested in adaptation between 2014 and 2018. At a recent pre-COP27 conference in Rwanda, African ministers and officials urged rich countries — which have failed to meet a promise to provide $100bn a year to developing countries by 2020 — to do more to combat the climate crisis.

“Africa has never been compensated enough for loss and damage which it didn’t cause,” Faustine Munyazikwiye, deputy director of Rwanda’s Environmental Management Agency, told the conference. Activists have called for wealthy countries to support Africa to the tune of $1.3tn.

That is a long way off: today, Africa benefits from less than 5 per cent of global climate funding – though the creation of a “loss and damage” fund was agreed at COP27. “We are very concerned about food insecurity in sub-Saharan Africa as it is growing extremely quickly,” says Mitra. “The critical issue is really stepping up concessional climate finance. That means grants and discounted loans from advanced economies towards low-income countries.”

Without funding for long-term agricultural resilience, says Osano, wealthy countries end up pouring short-term humanitarian aid into Africa to combat avoidable crises, such as famines in Ethiopia and Somalia in recent decades. By some estimates, Somalia is close to declaring another.

Slowly, however, a blueprint is emerging to tackle food insecurity with governance reforms, an active private sector and investment in telecommunications, roads and irrigation. “I think there’s hope,” says Mitra. “I think the solution is within our grasp.”

This article first appeared in The Banker. Image via Getty Images.

A service from the Financial Times