Agricultural Policy Actions for Building Back Better: A COVID-19 Mitigation Supportive Mechanism
By Apollos Nwafor, Ph.D. – Vice-President, Policy & State Capability
Even before the COVID-19 pandemic, Africa was already grappling with serious food security challenges, driven by factors such as drought, flooding and a major invasion by desert locust swarms in the Horn of Africa. The Food and Agriculture Organization estimated in 2019 – before the COVID-19 pandemic – that half of the people in Africa were food insecure.
Early estimates indicate that as a result of COVID-19, Africa’s real GDP is shrinking by 3.4%, down by 7.3% from the growth projected before the outbreak of the pandemic, with smaller economies facing contraction of up to 7.8%.
Commendably, most African governments implemented swift response measures such as cash transfers, tax breaks, and loans to businesses or subsidies on farm inputs. However, the measures were short-term and some have already lapsed. Yet the risks for the vulnerable persist and could get worse.
Policy makers must urgently identify priority areas to mitigate the effects of the pandemic on food systems and to build back better if the continent is to make headway in the first Sustainable Development Goal (SDG) of ending hunger, while leaving no one behind.
One objective is to boost food production and distribution. Policies need to support private sector players in the agriculture sector through lower interest rates for facilities and policy predictability for trade in agriculture.
Policies need to support provision of financing incentives for SMEs in the agriculture sector and developing resilience for smallholder farmers. Increasing government investment in the sector will drive financial institutions to increase their portfolio of lending to the sector, which currently lies at less than 1%.
Another priority should be fast-tracking of Digitalization for Agriculture (D4Ag) in Africa. The global workforce is digitising faster than ever before. Post-COVID, automation will take an ever more central stage. The fast mobile phone penetration in Africa has potential for driving innovation and building a tech savvy workforce in the sector.
Africa needs to strengthen intra-regional agricultural trade. Evidence suggests that regional trade agreements increase welfare by providing a rules-based trading system and trade liberalization. Officially commencing in January 2021, the Africa Continental Free Trade Agreement (AfCFTA) can be used to consolidate and strengthen intra-regional agricultural trade in the continent.
Policy actions should aim at propelling Africa through technological leapfrogging to overcome existing challenges.
For more information please contact Apollos Nwafor, Ph.D, Vice President – Policy and State Capability, AGRA on firstname.lastname@example.org