Agriculture remains at the heart of East Africa’s development
Several African countries are expected to see substantial expansion in their agricultural sectors over the medium to the long term because of an abundance of unexploited arable land, government reform programmes, political stability, public and private investment, and/or improved infrastructure. The East African Community (EAC) has a good share of the top ranking nations in this regard; while Uganda’s expansion is not expected to be so strong over the next five years, Kenya, Mozambique, Rwanda and Tanzania however are all countries with promising prospects in the nearer future.
Kenya – investment and structural reforms
This sector provides employment to the majority of Kenya’s labour force and is key to improving food security. It will remain at the centre of the national economy.
The chief vulnerabilities in the agricultural sector are fluctuating weather conditions and poor infrastructure. Erratic weather conditions are particularly harmful because of the absence of widespread irrigation and only limited extension services. A further drawback is that an increase in soil erosion is negatively affecting productivity in the sector.
On the positive front, the agricultural sector has benefitted from structural reforms, including the liberalisation of tea marketing and the privatisation of the Kenya Tea Development Agency (KTDA) in the year 2000. Furthermore, the horticultural sector manages to attract large amounts of foreign investment.
As part of the continued efforts to spur development in the agricultural sector, authorities implemented the Medium-Term Investment Plan (MTIP) for the agricultural sector, which spans the 2010-15 period and focusses on six investment pillars, namely increasing productivity, commercialisation and competitiveness; promoting the participation of the private sector; promoting the sustainable use of natural resources; reforming the delivery of agricultural services; increasing market access and trade; and ensuring effective coordination and implementation.
We expect Kenya to reaffirm its prominence in the agricultural sector on the continent over the next five to ten years.
Mozambique – PEDSA and AGRA
Mozambique is severely underdeveloped, but remains a land of great potential. The nation still has a very large surplus of unused, fertile land with only some 15.6% of cultivatable land currently being used, due to years of under-investment in infrastructure, including roads, irrigation and storage facilities.
Apart from infrastructure damage in the civil war, under-investment has also been driven by the country’s land system, under which all land is owned by the Government and then leased to farmers. As a result, farmers are unable to use their land as collateral to obtain loans, which limits new investment and leads to a gradual deterioration in quality.
In order to address the issue of underinvestment, the Government has undertaken numerous strategies and plans to support and promote the development of the agricultural sector. The Strategic Plan for Agricultural Development 2010-19 (PEDSA) was released by the Ministry of Agriculture to “incorporate a vision that is shared by key actors within the sector, creating a harmonized framework that will guide decisions, deals and issues that affect investor confidence and speed up agricultural [competitiveness] in a sustainable way”. The PEDSA includes a value chain approach and calls for the private sector to play an important role in agricultural development, including in the provision of financial services.
The Alliance for a Green Revolution in Africa (AGRA) Breadbasket Strategy for the Beira Agricultural Growth Corridor (BAGC) is a five-year strategy (2010-15) aimed at increasing the productivity and income of small producers in one of the areas of Mozambique with the greatest agricultural potential. It seeks to generate 50,000 jobs, irrigate over 40,000 hectares, and allow 200,000 farmers to double their income.
To achieve these goals, the strategy calls for cooperation between private and public sector actors to attract investment to increase the availability and affordability of modern agricultural technologies, link small farmers and associations to commercial operators and value chains, and improve the enabling environment, including affordable finance.
Furthermore, to increase the production and productivity of the agricultural and fishery sectors, the Poverty Reduction Action Plan (PARP) adopts various approaches, including improvements in production (through technology, inputs, organisation and management), better market access and sustainable resource use. Improved access to financial services in rural areas, especially for women, is included as a way to improve market access. Specifically, this objective suggests lines of credit and guaranteed funds to support small producers and traders.
Due to the vast untapped agricultural potential in Mozambique we expect the country to enjoy amongst the highest growth rates in this sector over the medium term.
Rwanda – Vision 2020
Rwanda has seen significant modernisation in the agricultural sector in recent times, which has paved the way for even higher growth rates in the future. The modernisation of the sector forms one of the six pillars of Vision 2020, the Government’s development programme with the objective of transforming Rwanda into a knowledge-based, middle-income country by 2020.
There remains significant scope to boost private-sector investment into the sector. Since 2012, the Ministry of Agriculture (MINAGRI) and the Rwanda Development Board (RDB) focussed on improving the agricultural investment environment and developed detailed investment opportunities. These include the creation of Special Economic Zones (SEZs), with the aim of attracting foreign agricultural investment.
Tanzania – Southern Agricultural Corridor
The agricultural sector plays an important role in the Tanzanian economy, both as an employer and foreign exchange earner, but the sector has not been able to take full advantage of its substantial natural resources, which includes good soils, underdeveloped land, and water resources suitable for agriculture.
The agricultural sector is dominated by small-scale farmers, with average farm sizes of between 0.9 and 3.0 hectares. Furthermore, the agricultural sector in Tanzania is hampered by low productivity and a lack of technology. Only around 10% of crops in the country are cultivated with the use of a tractor, while a further 20% is cultivated by ox, and most crops (70%) are cultivated by hand hoe.
The Government has undertaken various initiatives to promote development of the agricultural sector. The Tanzania Agriculture and Food Security Investment Plan (TAFSIP) 2011/12 – 2020/21 intends to focus on production and commercialisation of agricultural products, which includes transferring technology and subsidised inputs to smallholder farmers, as well as public-private partnerships in the Southern Agricultural Growth Corridor of Tanzania. The cost of the first five years of the TAFSIP is estimated at US$5.4 billion, with US$2.5 billion already made available. The Southern Agricultural Corridor is currently considered the breadbasket of Tanzania and beyond, through which food security will be assured and income generation for smallholder farmers will become a reality. The aim of this programme is to triple agricultural production over a 20-year period, leading to the creation of 420,000 jobs.
The agricultural sector will remain a priority area for the Tanzanian Government, partly due to the immense potential in the sector and partly due to the importance of food security and the salient role that the sector already plays in providing livelihoods to millions of Tanzanians. Increasing both private and public investment in the sector could have significant implications for productivity given the inefficient level of current production.